Conrad Enill

The future of Trinidad and Tobago’s natural gas industry may soon be in jeopardy without an urgent exploration strategy, as the country recorded the largest annual reduction in gas reserves in nearly a decade.
The latest audit of T&T’s natural gas reserves, announced yesterday, noted that the country’s reserves declined by just under ten per cent or from 1,623 billion cubic feet (bcf) to 15,374 (bcf). This translates to proven reserves of just over ten years, with probable and possible reserves extending commercial production to 20 years into the future under current production levels. The gas survey completed by the Houston-based gas consultancy firm Ryder Scott LP showed that this decline topped nearly a decade of decline as proven reserves fell more than 25 per cent since 2002.

Responding to the results and the need to increase gas supplies for future demand, Energy Minister Conrad Enill said six blocks were expected to be offered for competitive bidding in 2010 and exploration soon after. “The new proposals in the new tax regime can be expected to inform bid rounds that are currently being planned,” he said. “In this regard, four blocks in the north coast marine area and two blocks on the east coast are to be offered for competitive bidding in the first fiscal quarter of 2010.” Enill said the offer of the six blocks for competitive bidding was justified, “because if we do not move forward, our international competitors will maximise on the opportunity and bring their gas to market before us. “If we don’t do it, Nigeria will do it, Mexico will do it, or England will do it...Any province in which you have hydrocarbon at this point in time will be putting out blocks for those who are interested,” he said. He said the competitiveness had to do with the fiscal regime.

“BP, for example, has operations in T&T, Mexico and Russia, and they will decide when they will look at the opportunity in each country and determine whether they will approve an investment spend in a country,” he said.
“We are competing globally with all these other countries for direct investment dollars.” Enill said the blocks comprised 870,000 hectares and contained gas reserves of 8.3 (tcf) of unrisked identified exploration resources. “The acreage is close to existing production facilities and is adjacent to successfully explored blocks...In one of the blocks, proven resources have been identified,” he said. Enill said a study on the deep-water area was done and the deep-water bid round was expected to be launched by the end of the second fiscal quarter in 2010. He said the Government recognised the importance to the local petroleum industry of maintaining a flexible and competitive climate for foreign investors.

He said the process of reviewing the petroleum fiscal regime began in January 2008, and the review was necessary to create more competition in the sector. He said further talks were taking place on the proposed regime.
Senior vice-president, Ryder Scott International, Herman Acuna said the reduction in last year’s survey was primarily due to continuing production, as well as some adjustments in the previous estimates. The report also showed an increase in the probable gas reserves from 7,883 (bcf) in 2007 to 8,451 (bcf) in 2008 and possible reserves from 5,888 (bcf) in 2007 to 6,286 (bcf) in 2008. Officials were reluctant to disclose estimates of how long available reserves would last into the future as consequent audits as well as exploration activity could quickly change the production capability and proven reserves.

Acuna also said the low figure might give a wrong impression about supplies and might discourage investors interested in exploring in the territories.
“We won’t say you are running out of gas,” he said. “I think there were some successes with exploration...I think the probable and possible resources did go up but they have to be matured to be called proved. “Exploration activities leading to drilling of exploratory prospects must be encouraged.”