The Government continues to lose millions of US dollars in revenue due to the continued shutdown of BHP Billiton's Angostura field. The field was originally shut down on September 20, 2010 and was due to restart production on December 21, 2010. The Business Guardian, however, has been reliably informed that there was a delay in the installation of new facilities consistent with the previously announced Phase II gas export project in the Greater Angostura Field.
In an e-mail response, BHP Billiton said: "The planned shutdown of the Angostura field to facilitate the Angostura Phase II Development continues." It added that updates on the cost and schedule status of the Phase II development are provided in BHP Billiton's quarterly Exploration & Development report, the next of which is due for release on January 20. Initial estimates put the loss to government coffers at more than $220 million in revenue due to the planned shutdown of the oilfield.
BHP Billiton's average production out of Angostura is just over 13,000 barrel of oil a day. Under the production sharing contract (PSC) signed with the T&T Government, a percentage of the production-or what is known as profit oil-is given to the government in lieu of taxes. The Government then sells its share of the oil at international prices. While BHP said the Government's share of the profit oil was confidential under the PSC, sources confirmed that under the agreement it is just over 45 per cent of total production.
That means, effectively, the Government's take of Angostura is about 6,000 barrels of oil a day.
On Tuesday, oil prices tumbled below US $90 a barrel after crude had jumped to its highest level in two years. Light, sweet crude for February delivery settled down US$2.17, or 2.4 per cent, at US$89.38 a barrel on the New York Mercantile Exchange, the lowest settlement since December 20, 2010.
Six thousand barrels of oil a day at US$85 a barrel totals about $3.3 million a day.
The decision to shutdown Angostura is to facilitate the expansion of BHP's existing offshore facilities to include a new gas platform, a bridge connecting existing facilities, a new gas transmission pipeline, and major modifications to the existing offshore facilities. BHP had indicated in September that "during this period the company will also take the opportunity to carry out maintenance activities on its offshore facilities as required prior to gas production. This shutdown is expected to end December 2010 at which time oil production will resume," BHP's statement noted.
BHP said it had no choice but to shutdown the entire field. "The shutdown of the plant is required to ensure the safe completion of activities associated with the construction and installation of the new gas facilities." The company said its proposed gas development will enhance and support the T&T gas markets. "Our goal is to operate this expanded oil and gas facility safely and reliably as our track record demonstrates."
BHP Billiton and its partners moved into gas earlier than was expected when the Angostura field was first discovered. However the field turned out to be much smaller than was initially anticipated and the company's crude production plummeted from an initial high of 60,000 bo/p to its current rate. A decision was then taken to enter into gas production. It is believed that the Angostura field contains in excess of 1 tcf of gas. The gas is to be sold to the National Gas Company to be used in the domestic grid with first gas expected to be produced from Angostura in the first half of next year. BHP said the new gas export platform will have a design capacity of 280 million cubic feet per day. NGC sources tell the Guardian that the NGC will be buying 60 mmcf/d from BHP and its partners under a long-term contract.