A land-based bid round on 200,000 acres with an es­ti­mat­ed po­ten­tial of 500 mil­lion bar­rels of oil will com­mence in Jan­u­ary 2013, Min­is­ter of En­er­gy and En­er­gy Af­fairs Kevin Ram­nar­ine has said. "We are in bid round mode at the Min­istry of En­er­gy and En­er­gy Af­fairs be­cause we be­lieve to ar­rest this prob­lem of de­clin­ing oil pro­duc­tion, we have to con­stant­ly be putting out acreage. Right now, as we speak, we are on the verge of putting to­geth­er the pack­ages for a land-based bid round in south Trinidad," the min­is­ter said in a doc­u­ment e-mailed to the Busi­ness Guardian on Oc­to­ber 16.

The T&T Gov­ern­ment is "putting out two blocks in the south­ern basin. Those blocks would be put out by Jan­u­ary 2013," he said. De­scrib­ing it as "a joint ef­fort be­tween (state oil com­pa­ny) Petrotrin and the Min­istry of En­er­gy and En­er­gy Af­fairs," Ram­nar­ine said, "the to­tal acreage to be of­fered is ap­prox­i­mate­ly 200,000 acres, which is per­spec­tive for what they call the mid-Miocene and the low­er-Miocene Nar­i­va and Re­trench sand­stone reser­voirs. The po­ten­tial we es­ti­mat­ed is ap­prox­i­mate­ly 500 mil­lion bar­rels of oil com­pris­ing of in­di­vid­ual ac­cu­mu­la­tions in sizes rang­ing (from) 25 mil­lion to 100 mil­lion bar­rels of oil."

He said Petrotrin's "pro­duc­ing acreage" in the area will be left to Petrotrin, "We are leav­ing Petrotrin with the acreage over which it has shot 3D seis­mic." Ram­nar­ine said when he be­came En­er­gy Min­is­ter in June 2011, in his "very first speech" at an event of his for­mer em­ploy­er - the then South Cham­ber of In­dus­try and Com­merce, now the En­er­gy Cham­ber - he iden­ti­fied his "num­ber one pri­or­i­ty" in Ju­ly 2011: in­crease oil pro­duc­tion.

On a vol­u­met­ric ba­sis T&T pro­duces a lot of gas com­pared to oil, he said. "We pro­duced al­most eight, could be nine times more gas than oil on an equiv­a­len­cy ba­sis and there is for­mu­la to con­vert nat­ur­al gas to an equiv­a­lent oil bar­rel.

"When we look at our rev­enue, about 50 to 60 per cent of our rev­enue from the en­er­gy sec­tor is com­ing from oil. So what that told me, as a stu­dent of these num­bers, is that the lever that I had to throw to get the quick­est win for T&T was oil pro­duc­tion."

He said it is eas­i­er and faster to in­crease oil pro­duc­tion than to in­crease nat­ur­al gas pro­duc­tion. He said there are "re­serves of oil that were wait­ing to be picked in south Trinidad." Ram­nar­ine said that "has been the ex­press pri­or­i­ty of the Min­istry of En­er­gy and En­er­gy Af­fairs, (and) it has been writ­ten in­to the medi­um term pol­i­cy frame­work" that Plan­ning Min­is­ter Bhoen­dra­datt Tewarie has pro­duced. "There is not an at­tempt here to blame any­body, but I would say in the last ten years, one would have to ad­mit that there was an in­tense fo­cus on nat­ur­al gas, maybe to the ex­pense of oil pro­duc­tion in T&T."

The swing to nat­ur­al gas

He re­called a news­pa­per clip­ping in which for­mer prime min­is­ter Patrick Man­ning "had recog­nised this com­ing down to the end of his term as Prime Min­is­ter and he (Man­ning) had said that we were swing­ing too far to­wards nat­ur­al gas and we need­ed to go back to oil."

He said that while "there are many rea­sons" for the de­cline in oil pro­duc­tion in the last decade, one is that there was no strate­gic fo­cus on oil pro­duc­tion on land, in south Trinidad, and in Trin­mar. He quot­ed him­self as say­ing "many times" that the fo­cus of the Mal­colm Jones Board was the re­fin­ery.

"The fo­cus was not Trin­mar, the fo­cus was not the land fields. The fo­cus was the re­fin­ery. When we look at the re­fin­ery and what they fo­cused on, they fo­cused on the World Gas-to-Liq­uid (GTL) project which, I un­der­stand, it might be be­fore the courts, so I will heed your ad­vice about mat­ters be­fore the courts, but I will say that it has cost Petrotrin close to now $3 bil­lion for which they have not re­alised a sin­gle drop of syn­thet­ic diesel," he said.

He said, "The oth­er project was the Gaso­line Op­ti­mi­sa­tion Project (GOP). That project has not yet come to an end." He said he is ad­vised that it will come to an end when the fi­nal leg of that project, which is the com­mis­sion­ing of the flu­idised cat­alyt­ic crack­ing unit (FC­CU), takes place. "It start­ed off, I be­lieve, with a bud­get of US$850 mil­lion and has end­ed with a bud­get some­where around US$1.6 bil­lion. Close to $10 bil­lion has been spent on the GOP project."

On Oc­to­ber 18, Petrotrin pres­i­dent Khalid Has­sanali said in the Guardian that the FC­CU, al­so called the cat crack­er project, will come to an end in No­vem­ber, 2012. Ram­nar­ine said that "the world was chang­ing and we need­ed to have clean fu­els at Petrotrin to keep our mar­kets and so on."

He said the ob­jec­tive was "a good ob­jec­tive from a strate­gic point of view" be­cause as of Au­gust 1, the Unit­ed States of Amer­i­ca, had "a ma­jor change in its spec­i­fi­ca­tions for fu­els and so on, and every­body is go­ing the way of the Eu­ro­peans: low sul­phur. But had a por­tion of that mon­ey, or Met us as­sume that all the mon­ey from the world GTL project was spent on Trin­mar, the eco­nom­ic for­tunes of this coun­try would have been to­tal­ly dif­fer­ent to­day, be­cause peo­ple who know

Trin­mar will tell you that Trin­mar has huge po­ten­tial."

He said when­ev­er the min­istry en­gages in­ter­na­tion­al in­vestors, "there is no short­age of peo­ple" ask­ing if the T&T gov­ern­ment is go­ing "to put Trin­mar out for pri­vate in­vest­ment." Speak­ing on Trin­mar, he said, "We have al­most fin­ished the ne­go­ti­a­tion be­tween the min­istry and Petrotrin of the Trin­mar li­cense. It will be com­ing to the Cab­i­net very short­ly for ap­proval, and that Trin­mar li­cense is a mod­ern li­cense where we have put in a work pro­gramme for Petrotrin to which they have to ad­here, just like we treat any oth­er com­pa­ny in the en­er­gy sec­tor."

He ad­mit­ted that oil pro­duc­tion in fis­cal 2012 fell to 83,400 bar­rels of oil per day, but said, there are two as­pects to oil pro­duc­tion which one must un­der­stand. "There is what we called black oil, which is true crude oil, and then there is some­thing called con­den­sate."

He said what has hap­pened "is that con­den­sate pro­duc­tion from BP has vir­tu­al­ly col­lapsed be­tween Jan­u­ary 2011 and to­day, and that is a con­se­quence of many things, one of the fac­tors be­ing that they are pro­duc­ing more and more what they called dry gas which has less con­den­sate in it.

"So the strat­e­gy for oil pro­duc­tion has Petrotrin at the cen­tre. Petrotrin is at the cen­tre of the strat­e­gy for oil pro­duc­tion and we be­lieve at the cen­tre of that cen­tre is Trin­mar. Sec­ond, there is a strat­e­gy as it re­lates to land-based pro­duc­tion."

That strat­e­gy in­cludes the land-based bid round sched­uled for Jan­u­ary 2013.

T&T ex­port­ing LNG to more coun­tries

The min­is­ter al­so said, "We have been able in T&T to di­ver­si­fy our ex­ports of LNG away from the Unit­ed States. So, where­as three to four years ago 80 per cent of our LNG went to the Unit­ed States, that has now been re­versed, and 20 per cent of our LNG now goes to the US.

"Where does the oth­er 80 per cent go? Well, 16 per cent goes to a mar­ket that we call the Amer­i­c­as, and that is the Do­mini­can Re­pub­lic, Cana­da and Puer­to Ri­co; 35 per cent, the biggest share, goes to South Amer­i­ca, and that is the coun­tries we call the A, B, C, coun­tries: Ar­genti­na, Brazil and Chile; 14 per cent goes to Asia; one per cent goes to the Mid­dle East and 14 per cent goes to Eu­rope."

He said the ex­port of nat­ur­al gas from T&T "has been di­ver­si­fied and, as a con­se­quence of that, di­ver­si­fi­ca­tion," T&T is fetch­ing high­er prices for nat­ur­al gas in Eu­rope, South Amer­i­ca and Asia for nat­ur­al gas. "There­fore, we ex­pect that the as­sump­tion used by the Min­is­ter of Fi­nance and the Econ­o­my of $2.75 per MMB­tu will again hold in fis­cal 2013."

Re­call­ing that in the last bud­get pre­sent­ed by then Min­is­ter of Fi­nance Win­ston Dook­er­an, it was fore­cast­ed that Gov­ern­ment would col­lect $18.1 bil­lion in rev­enue from the en­er­gy sec­tor, Ram­nar­ine said he is now ad­vised, "that while we ex­pect­ed to col­lect $18.1 bil­lion, that fig­ure has been re­vised slight­ly up­wards to $18.6 bil­lion for fis­cal 2013."

Us­ing methanol to ease fu­el sub­sidy

Turn­ing to the fu­el sub­sidy, Ram­nar­ine said that he and Fi­nance Min­is­ter Lar­ry Howai "saw the need to tack­le the sub­sidy." One of the strate­gies to do that, of course ,is com­pressed nat­ur­al gas (CNG). We are look­ing at oth­er strate­gies. I want to say that methanol is be­ing used as a fu­el for trans­porta­tion around the world. Methanol has a high­er oc­tane rat­ing than the gaso­lines that we have here. The Min­istry of En­er­gy and En­er­gy Af­fairs will be work­ing with the Uni­ver­si­ty (of the West In­dies) to look at two projects in par­tic­u­lar."

He said that one is methanol for trans­porta­tion "be­cause we are ad­vised that you could blend up to ten0 per cent of your tank with methanol with­out any mod­i­fi­ca­tion to the en­gine. The oth­er one we are look­ing at is di­methyl ether (DME) as a re­place­ment for diesel. These are two re­search projects the min­istry (will) be work­ing on in this fis­cal year with the Uni­ver­si­ty of the West In­dies."