Another
delay in bid round: TT Govt holds out for more revenue
By
Curtis Williams
Trinidad
Guardian
Port Spain
Petroleumworld.com
06 25 06
There
has been yet another delay in the closing of bids
for exploration licences for 11 onshore and nearshore
blocks.
This
is the third delay but the Ministry of Energy said
it was not a reflection of lack of interest but,
rather, the Government trying to get the maximum
benefit from the new production sharing contracts
(PSCs) which it will have to negotiate with companies
following the new bid rounds.
Director
of Resource Management, Helena Innis-King, said
with crude oil prices at record levels for well
over a year now and predictions that strong prices
would continue for the foreseeable future, the Government
was moving to get more money from major oil and
gas companies.
She
said while the country was getting its fair share
of revenue from its PSCs, it never envisaged crude
and gas prices would reach the levels they have
over the last year and so the country could have
received more from the windfall.
“We
are getting a fair amount. In fact, these production
sharing contracts are much better than the E&P
licences we had with bpTT but we can get more at
the upper end and that is what we are going for,”
Innis-King told the Business Guardian.
She
explained that under the production sharing contracts
T&T gets a percentage of the oil and gas and
there is also a provision that the higher the price
the greater the take.
But
that formula has not benefited the country as much
as it could have.
Oil
prices have averaged well over US$60 a barrel in
the last year which is less than during the 1970s
oil boom when adjusted for inflation.
She
said this was the main reason for the delay in closing
the latest bid round for the onshore and nearshore
blocks.
Originally
scheduled to close on March 31 the deadline has
been extended on three occasions and is now due
to close on August 28.
She
said the new terms being offered to oil and gas
companies will be made available within the next
few days and the companies will have an opportunity
to study the economics.
“There
has been a lot of interest in the blocks. However,
in making changes to the production sharing contracts,
we have to give the companies an opportunity to
study these terms so that they can have a look at
the economics and determine their bids,” Innis-King
said.
Economist
Gregory McGuire said the Government should be commended
for its action if the delay was caused by a redesign
of the PSCs.
McGuire
said, “The Government is doing the right thing
in terms of the new levels of prices. The evidence
seems to suggest that we need to get accustomed
to a new threshold for oil prices. Perhaps the days
of a US$30 a barrel oil price is over and prices
may average over US$40 a barrel. If that is the
case and your legislation and tax take are rooted
on an oil price of US $25 a barrel when there is
a fundamental change in industry economics then
you have to do something and that is what I hear
the Ministry of Energy doing.”
McGuire
said he was unsure how it may affect companies margins
but there will be negotiations and depending on
how prospectus the blocks are then they will determine
what they can give up.
Oil
and gas companies were invited to participate in
an international competitive bid round for exploration
and production rights in respect of eight blocks
located in the Combined Southern Basin land acreage
and South Coast Marine Area and three blocks located
in the Shallow Marine Acreage off the north and
east coasts of Trinidad in water depths ranging
from 25 to 130 metres.
The
following is a brief description of the blocks being
offered:
1)
Combined Onshore/Nearshore:
(a)
Guayaguayare shallow horizon block comprising an
area of approximately 1126 sqkm with the shallow
horizon exploration rights extending to 1,525 metres
(5000ft).
(b)
Guayaguayare deep horizon block comprising an area
of approximately 1193 sqkm with the deep horizon
exploration rights starting at 1,525 metres (5000ft).
(c)
Southwest Peninsula, shallow horizon block comprising
of an area of approximately 538 sqkm with the shallow
horizon exploration rights extending to 3,200 metres
(10,500 ft) and 4,572 metres (15,000 ft) for prescribed
areas around committed wells.
(d)
Southwest Peninsula, deep horizon block comprising
of an area of approximately 917 sqkm with the deep
horizon exploration rights starting at 3,200 metres
(10,500 ft) and 4,572 metres (15,000 ft) for prescribed
areas around committed wells.
(e)
Herrera, shallow horizon block comprising of an
area of approximately 241sqkm with the shallow horizon
exploration rights extending to 3,962 metres (13,000
ft) in the northern area of the block and 2,286
metres (7,500 ft) in the southern area of the block.
(f)
Herrera, deep horizon block block comprising of
an area of approximately 712 sqkm with the deep
horizon exploration rights starting at 3,962 metres
(13,000 ft) in the northern area of the block and
2286 metres (7,500 ft) in the southern area of the
block.
(g)
Central Range, shallow horizon block comprising
an area of approximately 734 sqkm with the shallow
horizon exploration rights extending to 1,372 metres
(4,500 ft).
(h)
Central Range, deep horizon block comprising an
area of approximately 856 sqkm with the deep horizon
exploration rights starting at 1,372 metres (4,500
ft).
2)
Shallow marine acreage off the north and east coast,
Trinidad:
(a)
Block 2(ab), comprising an area of 1,605 square
kilometres.
(b)
Block NCMA 2, comprising an area of 1,019 square
kilometres.
(c)
Block NCMA 3, comprising an area of 1,019 square
kilometres
Trinidad Guardian
Thursday 22nd June 2006
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©2006 Trinidad Guardian. All Rights Reserved.
