Risky
and costly business
By Juhel Browne
Trinidad Express
Port Spain
Petroleumworldtt.com
08 26 07
Drilling for oil and gas in Trinidad and Tobago
has not just become increasingly more expensive
in just the last five years alone, it also
is growing into a
highly risky enterprise.
Just ask bpTT chairman and chief executive officer
Robert Riley or British Gas executive vice president
Martin Houston.
Both disclosed the details of the cost of exploration
in this country at a Government-sponsored energy
conference last week, as the Government is seeking
to increase exploration activity in the risky oil
and natural gas deep-water fields.
"We are now, the average, as I would like
to say the average pop of the well, is now in sort
of the US$50 million area, whereas we were much
more in the US$25 million," Riley said to
reporters last week.
"So,
in five years I have roughly seen the cost of
wells, the cost of infrastructure double,
and it's going against, you know, and prices have
gone up as well. That the price increases have
moved as fast as what's coming back round, the
cost increases."
During his address at the conference, Houston
said the cost of drilling for BG has tripled in
the past five years.
"Rigs today, deep water rigs are hoping at
around $500,000 a day. That's a half a million
dollars a day for a rig. A single exploration well
in the east coast is likely to cost $75 million
a day. I mean, these are almost incomprehensible
numbers compared to where we have come from in
our recent past, 2003 2004," Houston said.
And what is worse, is that the upstreamers do
not expect to get the kind of reserves they, and
the nation, have grown accustomed to.
"First of all, the size of what we think
we're going after is smaller than say five years
ago. Most times we were going to drill a well to
explore, we were hoping to find in excess of a
(trillion cubic feet) tcf of gas and so that basic
economics would tell you if it's bigger, the cost
is spread over more so the effective unit cost
is lower. So if it's smaller, the effective unit
cost goes up," Riley said.
Houston
said that given this nation's 150 history in
exploration, "it's inevitable, absolutely,
that reserves will be harder to find, more expensive,
less well defined in seismic and despite recent
advances in technology they are going to be deeper
and a higher temperate and a higher pressure."
Both Riley and Houston, however, remained optimistic
about the future of the nation's oil and gas sector.
"The reserves are undoubtedly there," Houston
said.
Trinidad
Express
Wednesday, August 22nd 2007
Copyright
©2007 Trinidad Express. All Rights Reserved.
