Managing
exploration
The Trinidad Guardian
Port Spain
Petroleumworldtt.com
09 23 07
In
the aftermath of the Ryder Scott audit of T&T’s
gas reserves there has been widespread agreement
from all stakeholders that T&T needs an aggressive
exploration programme to prove-up new gas reserves.
In
a presentation on the findings of the audit to
the STCIC last week, the Ministry of Energy
indicated that in addition to the proven, probable
and possible (3P) reserves, totalling 31.04 trillion
cubic feet (tcf), they estimate that there are
some 37.1 trillion cubic feet of exploration resources
available (taking a “best estimate” approach).
The
Ministry of Energy states that some two thirds
of the acreage available to T&T remains un-explored.
As the ministry sees it, the challenge is to move
these exploratory resources into the proven reserve
category.
This can, however, only be done through exploration
activity on an ongoing basis which, in turn, requires
that acreage is made available at the right fiscal
terms.
Managing exploration acreage is a key responsibility
for the Ministry of Energy and the future development
of the energy sector is heavily reliant upon how
well the ministry manages this process.
2007-2008 offshore exploration activity
Currently,
there is significant offshore activity taking
place in the waters around T&T. In total,
it is expected that nine offshore exploration wells
will be drilled in 2007 and seven in 2008. These
16 wells will be drilled at an estimated cost of
US$565 million.
At present, Canadian Superior is drilling in block
5c (also known as the Intrepid block). Last week,
Canadian Superior announced that it had reached
Total Depth (TD) on its Victory well. The company
plans to drill two more wells in the Intrepid Block.
In the last week, it was also reported that Petro-Canada
had spudded a well in the Gulf of Paria as part
of its drilling programme in block 1a, utilising
the Rowan Gorilla III rig. Petro-Canada is also
expected to start its drilling programme in block
22 (northeast of Tobago) in November 2007, using
the Diamond Ocean Worker drilling rig. In total,
Petro-Canada is expected to drill four exploration
wells in blocks 1a and 1b and four wells in block
22, during 2007 to 2008.
Another
company that has been active in T&T
is Kerr-McGee. In July of this year, Kerr-McGee
spudded its Kugler-1 exploration well in block
3(b) (named after Dr Hans Kugler who is considered
to be the “Father of Trinidad Geology”).
The drilling programmes by Canadian Superior,
Petro-Canada and Kerr McGee are all in acreage
allocated in the 2003/2004 competitive bid round.
Activity
is also taking place in acreage allocated in
previous bid rounds. BG T&T is reported
to be planning to drill one exploration well in
2008 in the East Coast Marine Area. EOG Resources
also plans to drill two exploration wells in block
4a in 2007-2008. Although it suffered a setback
with the Ibis Deep well last year, bpTT has expressed
confidence that it is not giving up on the deep
horizons. The company also plans to return to exploration
next year.
2006 bid rounds
There is also expected to be exploration activity
arising from the 2006 onshore/nearshore/shallow
marine bid round. Eleven companies and/ or consortia
of companies tendered fourteen bid proposals for
the eight blocks offered in this bid round.
The Ministry of Energy has since announced that
it is currently in negotiations with Hardman/Tullow
and Centrica with respect to Block 2ab and with
Hardman/Tullow with respect to the Guayaguayare
blocks. It was also announced that the block North
Coast Marine Area-2 (NCMA2), which is considered
to be gas prone, was awarded to OMEL (ONGC Mittal
Energy Ltd).
The Ministry of Energy is also in discussion with
Husky/Canadian Voyager for the Central Range Shallow
and Central Range Deep horizons and with Trinidad
Exploration and Development (TED) with respect
to the Southwest Peninsula Shallow and the Southwest
Peninsula Deep horizons.
In his contribution to debate on the 2007/2008
national budget, the Minister of Energy indicated
that when these negotiations are completed it is
expected that there would be investment of US$381
million in activity in these blocks. Overall, it
is estimated that the overall exploration programme
for the next six years would involve investment
in excess of US$946 million.
The
other 2006 bid round, the Deep Atlantic bid round,
only attracted one bid: from the Norwegian
oil company Statoil. Statoil has recently enjoyed
some exploration success in block 4 of Venezuela’s
Plataforma Deltana. The Ministry of Energy has
said that it intends to have another go at the
Deep Atlantic in 2009. The Ministry also intends
to have a 2008 bid round for a mixture of blocks
in offshore areas.
Strengthening the
management of bid rounds
The last few bid rounds have taken about two years
from initial advertisement of a bid round to signing
of a production sharing contract (PSC). Previous
experience also indicates that after a PSC is signed,
companies could take up to 18 months to mobilise
for an exploration drilling programme and, if natural
gas reserves are discovered in commercial quantities,
it could be three or four years before the field
is developed and the gas brought to market.
During their presentation to the STCIC, the Ministry
of Energy indicated that their target was to shorten
the timeframe to about one year between advertising
a block and actually signing a PSC.
Despite the implementation of a new organisational
structure last year, the Ministry of Energy suffers
from many of the constraints impacting the rest
of the public service.
Overcoming these constraints and improving the
management of bid rounds is an important component
of the effort to ensure that more proven gas reserves
are brought on-stream.
The
Trinidad Guardian
Thursday 20th September, 2007
Copyright
©2007 Trinidad
Guardian . All Rights Reserved.
