Government
to amend contracts to reflect changes in world oil,
gas markets
By
Curtis Williams
Trinidad
Guardian
Port
Spain
Petroleumworld.com
08 27 06
Seven
months after the Government put out bids for nearshore
and Trinidad Atlantic Deep exploration blocks, it
is yet to finalise a production sharing contract.
This
has led to companies not being able to bid on the
blocks and, on at least three occasions, has caused
the Ministry of Energy to set new dates for the
closing of the bids. The Government has been forced
to announce internationally that it could not meet
its own deadlines to fine tune the contracts before
presenting them to the companies.
The
last announcement by the ministry set August 28
as the deadline for bids on the nearshore blocks
but, once again, the Guardian has learnt that the
ministry cannot meet its deadline.
“I
am not in a position to say when the bid round will
be finally closed but we will not meet the latest
deadline,” said director of resource management,
Helena Innis King.
At
issue is the new production sharing contract which
Energy Minister Dr Lenny Saith said was being designed
to deal with the realities of the changed world
oil and gas markets.
Saith
said the changes were significant and they were
intended to deal with current record high crude
oil prices.
“The
reality is that in the past we never thought oil
prices would reach the record levels they have and
so we now have to ensure that in this new production
sharing contract we take that reality into account,”
Saith said.
The
Energy Minister said the changes were substantial
and a consultant had to be brought in to look at
it.
He
said the Government had to take its time to ensure
that the changes, while substantial, will ensure
that T&T remained competitive for international
exploration dollars.
“We
are looking at the taxation issues, the way we will
share any discoveries which are made. We have to
ensure that it is done properly and we don’t
put in place something which would result in nobody
bidding or which we will regret in the long run,”
said Saith.
Two
weeks ago, Saith said the team working on the new
PSCs made a presentation to the Government and the
Manning administration had some questions which
the team was looking at.
He
acknowledged there was some frustration by the international
companies and at the Ministry of Energy over the
length of time it was taking to wrap up but said
the Government will not be rushed.
He
argued that the delay will not be deleterious to
the Government’s bid rounds since the companies
bidding were doing so on the projection that any
discovery will take at least three years to produce.
“When
the companies are doing the calculations on whether
to bid on a block they have to take into account
the medium- to long-term price and work their figures
on those projections. So I do not think that because
prices are high the majors will be willing to bid
based on the prices we see right now,” Saith
said.
The
minister said while crude prices may not stay at
the record levels, most people agree that the time
of very low crude prices was over.
Saith
said he was hoping that by next week, the Government
would finally be able to finalise the new production
sharing contracts.
However,
even if this is done, the companies will then be
given a couple of months to study the PSCs before
they actually bid on the blocks.
Brief
description of the blocks
1.
Combined onshore/nearshore:
(a)
Guayaguayare, shallow horizon block comprising an
area of approximately 1126 square km with the shallow
horizon exploration rights extending to 1,525 metres
(5,000 ft).
(b)
Guayaguayare, deep horizon block comprising an area
of approximately 1,193 sqkm with the deep horizon
exploration rights starting at 1,525 metres (5,000
ft).
(c)
Southwest peninsula, shallow horizon block comprising
of an area of approximately 538 sqkm with the shallow
horizon exploration rights extending to 3,200 metres
(10,500 ft) and 4,572 metres (15,000 ft) for prescribed
areas around committed wells.
(d)
Southwest peninsula, deep horizon block comprising
of an area of approximately 917 sqkm with the deep
horizon exploration rights starting at 3,200 metres
(10,500 ft) and 4,572 metres (15,000 ft) for prescribed
areas around committed wells.
(e)
Herrera, shallow horizon block comprising of an
area of approximately 241sqkm with the shallow horizon
exploration rights extending to 3,962 metres (13,000
ft) in the northern area of the block and 2,286
metres (7,500 ft) in the southern area of the block.
(f)
Herrera, deep horizon block block comprising of
an area of approximately 712 sqkm with the deep
horizon exploration rights starting at 3,962 metres
(13,000 ft) in the northern area of the block and
2,286 metres (7,500 ft) in the southern area of
the block.
(g)
Central Range, shallow horizon block comprising
an area of approximately 734 sqkm with the shallow
horizon exploration rights extending to 1,372 metres
(4,500 ft).
(h)
Central Range, deep horizon block comprising an
area of approximately 856 sqkm with the deep horizon
exploration rights starting at 1,372 metres (4,500
ft).
2.
Shallow marine acreage off the north and east coast,
Trinidad:
(a)
Block 2(ab), comprising an area of 1,605 square
kilometres.
(b)
Block NCMA 2, comprising an area of 1,019 square
kilometres.
(c)
Block NCMA 3, comprising an area of 1,019 square
kilometres.
Trinidad Guardian
Thursday
17th August 2006
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