The fate of T&T’s continued economic growth could be partially hinged on the success of BPTT and Atlantic finding a solution to the shortfall in gas supply that is projected in 2020/2021, as failure could hurt the country’s revenue stream.
Asked about the worst-case scenario following BPTT’s recent disappointing drilling at two infill wells yesterday, Energy Chamber CEO Dr Thackwray Driver told Guardian Media that it could lead to Atlantic’s Train 1 being mothballed.
BPTT’s production is estimated to decrease by up to 300 million standard cubic feet per day in 2020 and 2021, a 15 per cent drop in production, the company has confirmed. It comes after a well in the Cannonball field turned out to be wet, resulting in there being no production and another well in the Cashima field being found to have a lesser volume than expected.
As a result, BPTT said it is unlikely to have the 200-300 mmscf/d that was expected to supply Train 1 in the 2020 to 2021 period under a formerly proposed gas sales agreement between itself and Atlantic. But during Monday’s Mid-year Budget Review, Finance Minister Colm Imbert said he expected little impact on natural gas production and that he found the concerns to be “alarmist.”
However, Driver feels differently.
“I think the point to emphasise is that because of the one dry well and one well which is going to be underperforming, BP has postponed its infill drilling programme while it re-evaluates the seismic model. That obviously delays gas coming onto the market. Obviously, it is something which is creating a lot of concern in the energy sector because this is a disappointment from a planned infill well, and that will have a material impact on gas production in 2020 and 2021,” Driver said.
He said that if Train 1 is mothballed, T&T’s economy will experience lower tax proceeds, less foreign exchange and it can impact the country’s growth figures.
“This is not showing up in 2019, but in 2020, 2021. Obviously, the companies are working very hard, along with the Government, trying to mitigate that and trying to find a course of action which will create a different outcome.”
Driver said Monday’s budget review mostly dealt with expenditure and there were not many changes made. He said people will, therefore, be looking towards the 2020 fiscal presentation for other initiatives.