Minister
stays upbeat as investors shun deepwater blocks
By Verne Burnett
The Trinidad
Guardian
Port
Spain
Petroleumworldtt.com
04 29 07
Minister
of Energy and Energy Industries Dr Lenny Saith
and his ministry are trying to find out why
oil companies were not interested in bidding for
deepwater blocks in the ministry’s latest
competitive bid rounds.
Eleven
blocks comprising eight onshore/nearshore blocks
and three shallow marine blocks were offered
in one round in January last year. In the deepwater
bidding, eight blocks located in the Deep Atlantic
off T&T’s east coast were offered.
Saith said when the bid round for the onshore/nearshore
and shallow marine blocks closed on November 30,
2006, eleven companies had put in 14 bids for the
eight onshore/nearshore blocks. At the close of
the bidding for the Deep Atlantic blocks on December
15,2006, only one company had tendered for one
block of the eight deepwater blocks offered.
However,
addressing journalists at last thursday’s
post-Cabinet press briefing, Saith said he was
not discouraged by the outcome. He said that, “This
is a new frontier and the risk is high. I have
asked our people to begin to talk to all the major
players as to what were their views on the bid
rounds.
“One
view that has come out is that because its a
high risk area, the 2-D surveys that we had
really were not enough for people to evaluate the
risk given the production sharing contract that
we had.”
Saith said the ministry would have to upgrade
the quality of the information it had on the blocks
put out for tender. This might mean the Government
may have to do some more seismic work.
He said some of the oil companies have said that
because of the extent of the risk involved in the
deepwater blocks, Government may have to review
the split between itself and the oil companies
that it is offering in the production sharing contracts.
Saith
made a lot of the fact that the sole bid in the
deepwater bid round came from a “very
reputable company with deep pockets,” a reference
to Norway’s Statoil ASA, an oil and gas company
formed by the Norwegian Parliament in 1972.
Saith revealed that the company had a net income
of US$4.7 billion in 2005.
He
said this indicated that there is an “interest” in
exploring in T&T.
“It
is not that people do not feel that there is
anything there. Its just an evaluation
of the risk at this time compared to where else
they can put their capital investment.”
He
said he would have been concerned if there had
been no bids at all “because that would
have meant that it was just completely out - but
the fact that we got one tells me that we should
see what happens to this one while we look at what
we do in the future.”
Of
the 14 bids received for the onshore/nearshore
and shallow marine blocks, Saith said Government
had agreed to award the contracts as recommended
by the ministry’s technical team. However,
4 bids failed to meet the Government’s requirements
and the companies involved had been asked to review
their bids.
Trinidad
Guardian
Saturday 28th April, 2007
Copyright
©2007 Trinidad Guardian. All Rights Reserved.
