Exxon,
Trinmar come up empty
By Curtis Williams
Trinidad Guardian
Port
Spain
Petroleumworldtt.com
11 19 06
Four
years after the controversial decision by Prime
Minister Patrick Manning to forego millions of dollars
in penalties from Exxon, in return for the company
working with Trinmar to increase its crude production,
there has been no success.
Two
wells have been drilled and they have both turned
out to be dry holes bringing to an end Exxon’s
commitments to T&T.
Now
it has been left to Trinmar to work on its own in
trying to increase its crude production up from
its current 33,000 bop/d to a projected 40,000 bop/d.
The
company has estimated that this year alone it will
spend close to $300 million to initially increase
the production to 35,000 bop/d.
In
late 2002 a conflict erupted between the Prime Minister
and technocrats at the Ministry of Energy over the
PM’s decision to overrule them in a $250 million
fight with the oil giant.
At
issue was Exxon’s failure to complete its
drilling programme in its deep water blocks.
In
exchange it was agreed Exxon would perform some
3-D seismic interpretation and developmental drilling
in Trinmar’s acreage and to partner with Petrotrin
in producing any additional reserves it may identify.
Technocrats
at the Ministry of Energy were incensed that Exxon
went above their heads, directly to Manning, when
it became apparent that the technocrats would not
allow the oil giant to escape the penalty payment.
The
technocrats were of the view that casting aside
the contract would set a bad precedent.
Additionally,
they were concerned that costs might be inflated
by the oil giant and, in any case, were convinced
that Petrotrin could do the job at a lower cost.
Manning
at the time argued that the technocrats were seeing
things only in “black and white” and
not looking at the big picture.
He
also denied usurping the role of the Minister of
Energy saying it was common for companies to approach
the Prime Minister when they were unable to resolve
a conflict with a given ministry.
Eventually,
Exxon got its way and worked with Trinmar, but with
no success.
With
crude prices high and Petrotrin trying to get more
indigenous crude for its refinery, the company has
looked to Trinmar to increase its crude production.
At
its peak, Trinmar produced 70,000 bop/d but that
production has consistently declined as fields became
older and became more difficult to produce.
The
company’s general manager (production operations)
Allan Russell has been tasked with reviving the
company’s production.
Russell
told the Business Guardian that there were two major
problems facing Trinmar: the first had to do with
the age and physical condition of the plant and
equipment and the other with the need to increase
the production.
He
said, “The Trinmar fields are pretty old fields
and, as a result, we are beginning to get into compliance
issues. So we are trying to put our house in order
in terms of HSE (health, safety and environment)
issues.”
Russell
said in trying to deal with the HSE issues Trinmar
has been busy changing some of its pipelines which
are used to transport the crude, its is also retooling
by improving its equipment and working facilities.
He
said the initially plan was to hold production at
35, 000 bop/d through additional water flooding
activities.
Russell
said the plan is to eventually raise the crude production
to 40,000 bop/d when the controversial South West
Soldado field is fully produced and providing no
additional oil is found.
He
also said the company was hopeful it could increase
its reserves through the discovery of new oil.
And
added that Trinmar is expected to drill an exploration
well in SW Soldado in the first quarter of 2007.
Trinmar
is also intent of moving away from producing oil
in South West Soldado from its floating badge to
a permanent platform.
“South
West Soldado has its opportunities and it has its
challenges. The major challenge is that it is situated
at the Orinoco’s mouth which means you have
strong currents two times as day. In addition, you
tend to have plumbing problems because of the silt
rushing in and out the facilities,” Russell
said.
They
are also expected to drill an exploration well in
its North Marine Block where it will be looking
for natural gas as it attempts to increase its non-associated
gas production.
Russell
admits that it will take sometime before Trinmar
can address its problems because the solutions are
expensive.
“It
will take lots of investments to make those changes
and we can’t do it in one fell swoop.”
The
Trinidad Guardian
Thursday 16th November 2006
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©2006 The Trinidad Guardian . All Rights Reserved.
