Cross-border
gas reserves and challenges
By Energy Correspondent
Trinidad Express
Port
Spain
Petroleumworldtt.com
03 18 07
Cabinet's
approval of the framework agreement, which was finalised
a few weeks ago in Port of Spain, for the unitisation
of hydrocarbon reservoirs between Trinidad and Tobago
and Venezuela now paves the way for the ratification
of a treaty. This would be a significant milestone
for two reasons: first, it would further cement
the historic relationship between the two countries
and second, provide for the first time an avenue
for the mutual exploitation of shared hydrocarbon
reservoirs as a single unit for the mutual benefit
of both countries.
The
foundation of this agreement is underpinned by the
Delimitation Treaty signed between the countries
in 1990 on the delimitation of marine and submarine
areas. The undertaking was that after holding appropriate
technical discussions, the countries would seek
to reach agreement as to the manner in which hydrocarbon
reservoirs shall be exploited and the manner in
which the costs and benefits arising from such exploitation
are to be shared.
From
a commitment in 2002 to enter into a Memorandum
of Understanding, the countries signed a MOU in
August 2003 that established a Steering Committee
to guide and steer the Unitisation talks that began
in January 2004. Considering the complexity of the
technical and legal issues that would have confronted
the Committee, much credit must be given to the
joint team and even more so when one contemplates
the added inconvenience of establishing clear communication
and understanding in two languages. The successful
outcome in relatively so short a period can only
be attributed to the commitment and dedication to
the task from both countries in spite of periodic
setbacks that emerged from the Petrocaribe disaccord.
The
Energy Minister has indicated that the first area
of involvement would be the Loran-Manatee field
which contains 10 trillion cubic feet (Tcf) of reserves
and of which 27 per cent belongs to Trinidad and
Tobago. The field was discovered in 1981 by the
Venezuelan Loran 1 well. In 2004, three additional
Loran wells were drilled by Chevron/Texaco and the
lone Manatee1 well was drilled in 2005 by the same
operator in Trinidad waters. The Loran-Manatee field
is part of a second of five blocks comprising Venezuela's
Deltana Platform that sources indicate contain some
40 Tcf of gas.
The
2.7 Tcf cross-border gas reserves, the equivalent
of an LNG train, would be a welcome addition to
our relatively small proved reserves pool and transporting
it to local shores should pose no major problems
with a cross-border pipeline. Accessing a portion
of the huge Venezuelan reserves for use in T&T,
however - although ideal and practical, given the
close proximity of the Deltana Platform and the
significant natural gas infrastructure residing
in Trinidad- would be far more difficult.
The
point is Venezuela has clearly stated that most
of its Deltana Platform gas would be dedicated towards
satisfy its expanding domestic market and for LNG
export. However, there is an explicit acknowledgement
of a common interest in promoting and contributing
to the development of the energy sector of both
countries.
Apart
from the Loran-Manatee field, technocrats constituting
Working Groups from both countries are currently
evaluating the extent to which hydrocarbon reservoirs
from bpTT's Kapok field extend across the border
into PDVSA's Dorado, Block 1, field in the Deltana
Platform. Sources seem to suggest that reserves
in this field may be smaller than those estimated
in Loran-Manatee and that most of the gas may lie
in Trinidad waters. If this is in fact true a gas
swapping arrangement may be possible where the Kapok/Dorado
gas is fully monetised in Trinidad and the Block
2 gas in Venezuela.
It
is also quite evident that state control of Venezuela's
resources is assuming greater importance. The country's
drive into its new socialism has been strengthened
by President Chavez's sweeping enabling powers granted
by the National Assembly. All this would suggest
that it's only a matter of time before the Venezuelan
gas sector is fully controlled by the state and
that it would be even more difficult to imagine
any of its gas being utilised to meet the needs
of non-socialist entities. In short, given the current
destinations of T&T LNG exports, access to Venezuelan
gas will be a major diplomatic challenge for Manning
and company.
Feedback:
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Trinidad
Express
Thursday, March 15th 2007
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©2007 Trinidad Express. All Rights Reserved.
