State-owned Her­itage Pe­tro­le­um con­tin­ues to re­port strong eco­nom­ic per­for­mance as the com­pa­ny has made an af­ter tax prof­it of $1.2 bil­lion for the first nine months of the 2021 fi­nan­cial year.

Not on­ly has the com­pa­ny in­creased its prof­its but it has al­so grown pro­duc­tion while ben­e­fit­ing from im­proved glob­al crude oil prices.

The Busi­ness Guardian ob­tained an ad­vance copy of the ac­counts which ap­pear in to­day’s news­pa­per and they show record fi­nan­cial per­for­mance of the rel­a­tive­ly new­ly mint­ed Ex­plo­ration and Pro­duc­tion Com­pa­ny.

Ac­cord­ing to the ac­counts for the nine months end­ed June 30 2021, Her­itage Pe­tro­le­um Com­pa­ny Lim­it­ed and its sub­sidiaries’ rev­enue for the pe­ri­od was $4.9 bil­lion vs $3.2 bil­lion in 2020, re­flect­ing the con­tin­ued in­crease in pro­duc­tion and Brent prices which av­er­aged $58/bbl for the year to date. This in­crease the com­pa­ny not­ed is rep­re­sen­ta­tive of im­proved mar­ket con­di­tions as COVID-19 re­stric­tions across the world are slow­ly be­ing eased.

“As a re­sult of both our pro­duc­tion in­crease and bet­ter Brent pric­ing our prof­it has in­creased to $1.2 bil­lion as com­pared to $0.7 bil­lion for the same pe­ri­od in 2020,” its chair­man Michael Quam­i­na re­vealed.

Her­titage is re­port­ing that there has been strong cash gen­er­a­tion from op­er­a­tions of $2 bil­lion and cash bal­ances stand at $1.7 bil­lion.

The com­pa­ny which was formed fol­low­ing the fail­ure of Petrotrin said its con­tri­bu­tion, in the form of tax­es, levies and roy­al­ties to the Gov­ern­ment, was $606 mil­lion for the nine-month pe­ri­od.

The com­pa­ny said in ad­di­tion to pay­ing its tax­es to gov­ern­ment its net prof­it was achieved even with it hav­ing met all the debt pay­ment oblig­a­tions of Trinidad Pe­tro­le­um Hold­ings Lim­it­ed (TPHL) in­her­it­ed from Petrotrin.

On the pro­duc­tion side, Her­itage is re­port­ing that de­spite the chal­lenges of the pan­dem­ic in man­ag­ing the op­er­a­tions of the busi­ness it con­tin­ues to grow pro­duc­tion.

“Pro­duc­tion is key for the com­pa­ny and Her­itage con­tin­ues to fo­cus on ac­tiv­i­ties that sus­tain ex­ist­ing pro­duc­tion while ex­ploit­ing new re­serves through in-house drilling and workover pro­grammes as well as with our key part­ner­ships. Her­itage has grown pro­duc­tion by 7.3 per cent for the pe­ri­od to 41.6 bopd vs 38.7 bopd when com­pared to pro­duc­tion for the com­pa­ra­ble nine-month pe­ri­od in 2020.”

The com­pa­ny said its re­serve re­place­ment strat­e­gy has been suc­cess­ful and it has ar­rest­ed the de­cline in pro­duc­tion and re­serves with its Field Re­vi­tal­i­sa­tion, En­hanced Oil Re­cov­ery and workover pro­grammes.

“We have re­built the in­ven­to­ry of workover and drilling op­por­tu­ni­ties and in 2022, we will be pur­su­ing an ag­gres­sive drilling cam­paign both on Land and Off­shore. Our fo­cus is on pro­gress­ing new re­serve pools which is a key el­e­ment of our strate­gic growth agen­da. Her­itage con­tin­ues to fo­cus on val­ue adding projects and in­creas­ing our op­er­at­ing ef­fi­cien­cy as part of our over­all strat­e­gy to op­er­ate a safe, prof­itable and sus­tain­able busi­ness,” the chair­man’s re­port read.

In re­sponse to ques­tions from the BG, Quam­i­na said 2021 was a strong year for fi­nan­cial re­turns at Her­itage. The fo­cus of 2022 he ex­plained is to grow pro­duc­tion and progress re­serves that will dri­ve the long-term growth of the busi­ness.

“We have made sig­nif­i­cant strides in de­vel­op­ing our Drilling and Workover in­ven­to­ry. We are op­ti­mistic by the op­tions in the sub­sur­face, on both fronts, the pro­gres­sion of the re­serves which will de­liv­er and main­tain the base pro­file, and new re­sources like Sol­da­do East field that will grow pro­duc­tion in 2022 and be­yond.

Michael Quamina

SHIRLEY BAHADUR

“Our drilling and workover cam­paign in 2022 will be ag­gres­sive as we re­turn to drilling on land with 10 wells. We will al­so be drilling 4 wells off­shore in East Sol­da­do, this is the first off­shore drilling pro­gramme in this lease since 2016. In ad­di­tion, we will be main­tain­ing our workover cam­paign and en­hanced oil re­cov­ery pro­gram.

We have a strong lo­cal team who are com­mit­ted to de­liv­er our agen­da. Our strat­e­gy con­tin­ues to be safe, ef­fi­cient, and re­li­able op­er­a­tions,” Quam­i­na told BG.

COVID-19 and work from home

Her­itage said like many oth­er or­gan­i­sa­tions it has had to cope with the im­pact of COVID-19 on its day-to-day op­er­a­tions which has meant tran­si­tion­ing to re­mote work­ing arrange­ments. The com­pa­ny said it has had to cre­ate ‘iso­la­tion bub­bles’ for the op­er­a­tions team work­ing in the fields and off­shore to re­duce COVID-19 spread.

“Even so, we have con­tin­ued to de­liv­er our on­go­ing projects all whilst en­sur­ing the high­est stan­dards of health, safe­ty and well-be­ing are main­tained for our em­ploy­ees and our com­mu­ni­ty,” not­ed Her­itage in its fi­nan­cial state­ment.

ESG Agen­da

Her­itage in­sist­ed it is com­mit­ted to sup­port­ing the aims of the na­tion­al com­mit­ments aligned to the Paris Agree­ment and to con­tribute to the UN Sus­tain­able De­vel­op­ment Goals on cli­mate change as part of its En­vi­ron­ment, So­cial and Gov­er­nance (ESG) strate­gic agen­da. Her­itage said it con­tin­ues to fo­cus on GHG im­prove­ments and sup­ports the Cab­i­net-ap­point­ed Car­bon Cap­ture Util­i­sa­tion and Se­ques­tra­tion (CCUS) Com­mit­tee.

“We are com­mit­ted to de­vel­op­ing our first An­nu­al Sus­tain­abil­i­ty Re­port in May 2022 in ac­cor­dance with the Glob­al Re­port­ing Ini­tia­tive (GRI). Tak­ing on the chal­lenge of our first sus­tain­abil­i­ty re­port has cre­at­ed both mo­men­tum and tremen­dous op­por­tu­ni­ties. It af­fords us the chance to de­ter­mine our goals, re­flect on what we have achieved and how we will im­prove.”

On the is­sue of its fence­line com­mu­ni­ties the state com­pa­ny said it con­tin­ues to work with those com­mu­ni­ties by pro­vid­ing much-need­ed as­sis­tance for those im­pact­ed by the on­set of COVID-19 through food ham­per dis­tri­b­u­tions and do­na­tions of com­put­er equip­ment to sec­ondary school stu­dents.

“We have al­so part­nered with com­mu­ni­ty-based or­gan­i­sa­tions (CBOs) to dis­trib­ute 20,000 seedlings as a part of our ‘Here we Grow’ pro­gramme to en­cour­age home gar­den­ing and house­holds to eat what they grow.

“As we move for­ward, I would like to thank the Man­age­ment and Staff of the com­pa­ny for their con­tin­ued com­mit­ment to the com­pa­ny and to Trinidad and To­ba­go.”

Her­itage Pe­tro­le­um Com­pa­ny Lim­it­ed (“Her­itage”) was in­cor­po­rat­ed on Oc­to­ber 5, 2018. It is pri­mar­i­ly en­gaged in ex­plo­ration, de­vel­op­ment, pro­duc­tion and mar­ket­ing of crude oil. The sole share­hold­er is Trinidad Pe­tro­le­um Hold­ings Lim­it­ed (TPHL). The ul­ti­mate par­ent is the Gov­ern­ment of the Re­pub­lic of Trinidad and To­ba­go with con­sol­i­dat­ed sub­sidiaries in Trinidad and To­ba­go and the Unit­ed King­dom.

Pri­or to Her­itage’s for­ma­tion, its ex­plo­ration and pro­duc­tion ac­tiv­i­ties were con­duct­ed by Pe­tro­le­um Com­pa­ny of Trinidad and To­ba­go.