TT's
PM faces dilemma
By
Curtis Williams
The Trinidad Guardian
Port
Spain
Petroleumworldtt.com
10 01 06
With
the budget just three days away Prime Minister Patrick
Manning is faced with a dilemma of how much oil
the country would produce in light of a massive
decline in production from BHP Billiton.
The
decline from the company’s Angostura field
has seen production for September average 37,000
barrels a day, down 26,000 barrels a day from a
peak of 63,000.
As
Prime Minister Manning and his staff calculate the
country’s revenues from oil, they will look
at the possible price but equally important to the
Government would be the amount of crude being produced.
With
the coming on line of BHP Billiton’s Angostura
field, the Government was expecting both higher
oil prices and greater production hence much larger
revenues.
Officials
at the Ministry of Energy said Angostura has been
a major disappointment and even Prime Minister Patrick
Manning recently quipped that BHP Billiton was now
learning how complex T&T’s geology was.
When
the field was first discovered, BHP Billiton officials
initially boasted about a possible billion barrel
field, but as they drilled more developmental wells
reality set in and the find was downsised.
The
Sunday Guardian was told that not even BHP Billiton
was prepared for the way the field has so far performed.
Well-placed
sources in the company told the Sunday Guardian
that despite the talk of building a “legacy
business” out of Angostura, BHP Billiton will
have to make more discoveries if it was going to
be here for the long-term.
Asked
about the dramatic fall in production, BHP Billiton
sources declared that this was always the way they
expected the field to produce.
In
an e-mail response from the company’s Government
and Public Affairs Manager Dr Carla Noel-Mendez,
the company said: “This is consistent with
the original crude oil production profile anticipated
for the field.”
Noel-Mendez
wrote: “I would ask you to be factual and
note that the company issues production information
quarterly via its Exploration and Production Reports.”
Noel-Mendez
did not give a month by month break down of Angostura’s
production but insisted that the Sunday Guardian
include in its story that BHP Billiton had a fantastic
safety record even though no request was made of
BHP Billiton about its safety performance.
She
wrote: “The company has a stellar safety record.
Any mention of the operations of the asset should
mention this.”
Figures
received from the Ministry of Energy showed that
between February and August, crude production from
the field fell 10,000 bop/d and since May has averaged
less than 40,000 bop/d. (See box)
Meanwhile
in June, BHP’s crude production plummeted
to 14,907 bop/d due to a two week shutdown.
“We
had a pre-planned, scheduled shutdown. The shutdown
lasted 17 days and it involved planned and routine
maintenance. The operation was completed safely
and successfully,” Noel-Mendez wrote.
The
Sunday Guardian has been told that BHP Billiton’s
compressors have been performing badly and that
this was one of the reasons they were unable to
produce their field as well as they may have.
It
is also understood that the company has been using
natural gas to inject back into the well to lift
the crude.
But
with the compressors performing badly, the company
has only been able to pump 200 million cubic feet
of gas per day into the reservoir.
BHP
Billiton denied that its expensive compressors were
not performing well.
Noel-Mendez
wrote: “This is not true. Our compressor reliability
and availability is top quartile for a facility
of our age and complexity.”
She
was, however, quick to point out that Angostura
was a new oil province and that BHP Billiton was
learning as it went along.
Noel-Mendez
said: “It should be noted that this is the
first production from this area of Trinidad.
“It’s
a newly discovered and newly producing field in
complex geology, and there are no templates for
it.”
Asked
if it was not true that Angostura has been a major
disappointment for its shareholders and was on the
lower end of the original projections, Noel- Mendez
said: “The field was approved for development
based upon a range of outcomes—from both oil
and gas production, the latter which has not even
begun yet. It’s entirely too early to make
any such assertion like this.”
“This
field will be in production for several more years.
Development drilling is ongoing and is the means
by which the size of the Angostura field will be
proven.
The
Trinidad Guardian
Sunday 1st October, 2006
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