What’s
up with Caracas?
By Linda Hutchinson-Jafar
Trinidad & Tobago Newsday
Port Spain
Petroleumworldtt.com
09 09 07
Prime Minister Patrick Manning has broadly hinted
at problems with Venezuela which may affect the
production of the much-needed gas resources that
the two countries share on their maritime border.
“We’re now trying to consummate the
cross border arrangement which we feel is the most
efficient way of treating with those gas resources,
and if, incidentally, those gas resources are not
produced under the unitisation arrangement, I predict
that they won’t be produced for a very long
time to come,” the prime minister told industry
leaders attending the recent government-sponsored
energy conference two weeks ago.
Earlier this year, Trinidad and Tobago and Venezuela
signed a framework unitisation agreement on the
energy blocks straddling their border. But the
gas estimated at 10 trillion cubic feet (tcf) cannot
be produced without agreement of both sides on
the issue monetisation or the actual exploitation
of the reserves in the Manatee and Loran discoveries
in Trinidad and Venezuela, respectively.
It was agreed by technical teams from the two
countries that approximately 73% (7.3 Tcf) of the
reservoir lies on the Venezuelan side of the border
with the remaining 27% (2.7 Tcf) on the Trinidad
and Tobago side of the border.
Manning
told energy leaders that during a recent visit
to Caracas to discuss the cross border gas
issue, Venezuela’s state-run energy company,
PDVSA’s approach was “thinly disguised.”
“In fact, they presented a map to the President
of Venezuela showing a pipeline from Manatee — a
400-km pipeline from Manatee to the Paria Peninsula,
arguing that, that gas is needed in Venezuela for
LNG production they were developing in the Mariscal
Sucre project,” said Manning. “They,
of course, completed ignored the fact just to the
north of the Paria Peninsula has some significant
gas in Venezuela waters.”
“I
merely laughed, what else could I do and especially
as the Minister of Energy in Venezuela
is the president of PDVSA. I suspect that the opposition
is not just from the oil company but it might well
be from the ministry too and the president of Venezuela
is in a very difficult position on that matter,
seeking now to walk between conflicting interests
and requirements and certainly conflicting objectives.
“I could go a little more into it, I don’t
want to get into trouble with PSVSA, they dominate
the Caribbean market and they could interfere with
Petrotrin at will and they sometimes do. But it
is a sensitive matter,” he said.
Manning
said it seems that political and not economic
consideration dictates what happen on how the markets
operate. The BG Group and partner Chevron which
discovered the Manatee field in Trinidad in January
2005 signed a US$2 billion gas sales agreement
last May with Trinidad and Tobago’s state-owned
National Gas Company (NGC) for the supply of 220
million standard cubic feet of natural gas per
day (mmscf/d) from 2009, expected to come from
the cross-border field. The gas is targeted for
the domestic market for an initial term of 11 years
with an option to extend for an additional four
years. Following the March 20 meeting in Caracas
with Manning, the Venezuelan leader was due to
arrive in Trinidad the following month to give
a more precise reading of whether Caracas will
partner with Trinidad on a number of energy development
plans that were put forward during the talks. The
bilateral meeting between Chavez and Manning also
brought an end to a chilly relationship that developed
two years ago when Trinidad and Tobago opted not
to sign the PetroCaribe oil initiative which was
supported by 13 members of the Caricom.
During the March meeting, Manning proposed that
Caracas and Port-of-Spain collaborate on building
a new oil refinery in Trinidad, capable of processing
250,000 barrels of crude per day.
“What we have advanced is a comprehensive
Memorandum of Understanding (MoU) to the Venezuelan
government for collaboration between Venezuela
and Trinidad and Tobago in energy development,” said
Manning on his return home.
“They
have agreed to study it and President Chavez
has agreed to come to Trinidad about mid-April
to sign, whatever arises out of the technical discussions
that will now follow the submission of that MoU.”
The signing of the unitisation agreement, Manning
suggests, gives his country a source of supply
for the Train X. Manning also proposed to Chavez
that the Loran-Manatee Train X, as he called it,
should be landed in Trinidad, saying that a 56-inch
pipeline which was recently laid in his country
is designed to take another 800 million cubic feet
of gas.
“Because of the location of that gas field,
the economics of bringing gas to shore favours
Trinidad and Tobago as opposed to Venezuela itself,” he
said.
Caracas, in the meantime, despite its plans to
become a net exporter of natural gas this year,
is still lagging behind with its US$2.7 billion
LNG export plant in Giria, from which gas from
the Mariscal Sucre project and the Deltana Platform
would feed to produce 4.7 million tonnes of LNG
annually.
President Chavez, during a 2003 official visit
to Trinidad said he hoped gas from the Plataforma
Deltana, located close to Trinidad will be processed
in Port of Spain for export markets since the South
American country does not yet have an LNG plant.
Trinidad & Tobago
Newsday
Thursday, August 30 2007
Copyright
©2007 Trinidad & Tobago Newsday . All
Rights Reserved.
