En­er­gy Re­porter

The gov­ern­ment re­cent­ly signed its first pro­duc­tion shar­ing con­tracts (PSC) since com­ing to pow­er. The con­tracts were signed for ex­plo­ration of four blocks in shal­low and av­er­age wa­ter depths and Niko Re­sources was in­volved in three of the four blocks. While many may not be fa­mil­iar with Niko, it aims to be­come one of T&T's lead­ing ex­plo­ration and pro­duc­tion com­pa­nies. Niko is new to T&T and came here af­ter it pur­chased the as­sets of Voy­ager En­er­gy in 2010. Speak­ing with the Busi­ness Guardian fol­low­ing the sign­ing of the PSCs, its coun­try man­ag­er Ajith Mu­ralid­ha­ran said that the com­pa­ny had, in the short space of time, ac­quired in­ter­est in six blocks and was ag­gres­sive be­cause it be­lieves that there is oil and gas here to be dis­cov­ered. "We are com­ing here be­cause we be­lieve this is a per­fect place for the ex­pan­sion of our busi­ness," said Mu­ralid­ha­ran. By sign­ing the PSC, Niko has agreed to pay the Gov­ern­ment more than $125 mil­lion as a sig­na­ture bonus and has al­so agreed to spend US$130 mil­lion in drilling five wells and the ac­qui­si­tion of 3D seis­mic da­ta.

He said the com­pa­ny had the mon­ey to af­ford its ex­pan­sion in­to T&T. "Niko has a mar­ket cap­i­tal­i­sa­tion in ex­cess of US$4.5 bil­lion and no debt. We ex­pect T&T to be­come a key growth area for our com­pa­ny." He added: "We have en­tered in­to a joint ten­der­ing arrange­ment with Cen­tri­ca for ac­quir­ing seis­mic da­ta in the blocks NC­MA 2 and 3. We have gone through a strin­gent ten­der­ing process and have iden­ti­fied a suit­able ves­sel that can ex­e­cute the ex­ten­sive work pro­gramme. "We are ready to award the con­tract as soon as we sign the PSCs. As I un­der­stand it, this joint pro­gramme of ap­prox­i­mate­ly 5,000 sq km is the biggest ever sin­gle seis­mic ac­qui­si­tion in T&T and ar­guably the biggest that has been award­ed this year around the globe." Niko's coun­try man­ag­er said he was aware that T&T had be­come the "prover­bial grave­yard" of ge­ol­o­gists but that his com­pa­ny was not daunt­ed by this re­al­i­ty. "It is part of the busi­ness. In many re­spects ex­plo­ration is the ul­ti­mate case of prob­a­bil­i­ty so we are not daunt­ed that some com­pa­nies have drilled and failed and that the sta­tis­tics talk about a de­clin­ing basin. We feel that there are hy­dro­car­bons here and we in­tend to go out and find it."

The com­pa­ny re­cent­ly signed a drilling con­tract with Bay­field En­er­gy and Rowan com­pa­nies to share a rig. Mu­ralid­ha­ran said the deal marked the be­gin­ning of a sub­stan­tial and sus­tained drilling pro­gramme it has be­gun here. In an­nounc­ing its sign­ing of the three PSC's Niko said Block 4(b) has "sev­er­al un­drilled struc­tures with pro­nounced seis­mic am­pli­tude anom­alies that sug­gest the pres­ence of hy­dro­car­bons." It al­so not­ed that the block is north of Block 5(c), where sev­er­al gas dis­cov­er­ies have been made. Niko has bought in­to block 5c in which British Gas is the op­er­a­tor and Mu­ralid­ha­ran said the com­pa­ny was wait­ing on the Min­istry of En­er­gy and En­er­gy Af­fairs to ap­prove the sale.

British Gas had first op­tion to ac­quire the as­sets of its part­ner Sonde but passed up on the op­tion.

Sonde sold its in­ter­est in the block cit­ing "the large cap­i­tal ex­pen­di­ture re­quire­ments and an un­clear de­vel­op­ment time­line for Block 5(c), man­age­ment and the Board have de­ter­mined that a sale of Block 5(c) will best cap­i­talise the com­pa­ny to pur­sue its fu­ture growth plan."

Niko is cur­rent­ly in­volved in Block 2ab, Cen­tral Range and Guayagua­yare. It is al­so in Block 2ab with Cen­tri­ca and Petrotrin and has ac­quired ap­prox­i­mate­ly 40 per cent of its seis­mic in the block. "We al­so plan to shoot off­shore seis­mic in Guayagua­yare block in Au­gust 2011 us­ing the same ves­sel Re­flect Aries that will shoot 2ab seis­mic. Once we com­plete the seis­mic, we plan to drill in Guayagua­yare dur­ing the first half of 2012. In so far as the 2 PSCs in the Cen­tral Range block is con­cerned, our JV Part­ner Parex is ex­e­cut­ing its work pro­grammes un­der the PSC," said Mu­ralid­ha­ran. "Niko is ex­cit­ed about be­ing in Trinidad and the op­por­tu­ni­ty to be a part of T&T's oil and gas in­dus­try. We are en­thu­si­as­tic about the prospects and the op­por­tu­ni­ties that this coun­try of­fers and the blocks that we have."