Two weeks ago, I wrote what I then felt was a story of hope. Or, perhaps, what I then felt was the story that should be told.
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Niko optimistic about oil, gas discovery
The government recently signed its first production sharing contracts (PSC) since coming to power. The contracts were signed for exploration of four blocks in shallow and average water depths and Niko Resources was involved in three of the four blocks. While many may not be familiar with Niko, it aims to become one of T&T’s leading exploration and production companies. Niko is new to T&T and came here after it purchased the assets of Voyager Energy in 2010. Speaking with the Business Guardian following the signing of the PSCs, its country manager Ajith Muralidharan said that the company had, in the short space of time, acquired interest in six blocks and was aggressive because it believes that there is oil and gas here to be discovered. “We are coming here because we believe this is a perfect place for the expansion of our business,” said Muralidharan. By signing the PSC, Niko has agreed to pay the Government more than $125 million as a signature bonus and has also agreed to spend US$130 million in drilling five wells and the acquisition of 3D seismic data.
He said the company had the money to afford its expansion into T&T. “Niko has a market capitalisation in excess of US$4.5 billion and no debt. We expect T&T to become a key growth area for our company.” He added: “We have entered into a joint tendering arrangement with Centrica for acquiring seismic data in the blocks NCMA 2 and 3. We have gone through a stringent tendering process and have identified a suitable vessel that can execute the extensive work programme. “We are ready to award the contract as soon as we sign the PSCs. As I understand it, this joint programme of approximately 5,000 sq km is the biggest ever single seismic acquisition in T&T and arguably the biggest that has been awarded this year around the globe.” Niko’s country manager said he was aware that T&T had become the “proverbial graveyard” of geologists but that his company was not daunted by this reality. “It is part of the business. In many respects exploration is the ultimate case of probability so we are not daunted that some companies have drilled and failed and that the statistics talk about a declining basin. We feel that there are hydrocarbons here and we intend to go out and find it.”
The company recently signed a drilling contract with Bayfield Energy and Rowan companies to share a rig. Muralidharan said the deal marked the beginning of a substantial and sustained drilling programme it has begun here. In announcing its signing of the three PSC’s Niko said Block 4(b) has “several undrilled structures with pronounced seismic amplitude anomalies that suggest the presence of hydrocarbons.” It also noted that the block is north of Block 5(c), where several gas discoveries have been made. Niko has bought into block 5c in which British Gas is the operator and Muralidharan said the company was waiting on the Ministry of Energy and Energy Affairs to approve the sale.
British Gas had first option to acquire the assets of its partner Sonde but passed up on the option.
Sonde sold its interest in the block citing “the large capital expenditure requirements and an unclear development timeline for Block 5(c), management and the Board have determined that a sale of Block 5(c) will best capitalise the company to pursue its future growth plan.”
Niko is currently involved in Block 2ab, Central Range and Guayaguayare. It is also in Block 2ab with Centrica and Petrotrin and has acquired approximately 40 per cent of its seismic in the block. “We also plan to shoot offshore seismic in Guayaguayare block in August 2011 using the same vessel Reflect Aries that will shoot 2ab seismic. Once we complete the seismic, we plan to drill in Guayaguayare during the first half of 2012. In so far as the 2 PSCs in the Central Range block is concerned, our JV Partner Parex is executing its work programmes under the PSC,” said Muralidharan. “Niko is excited about being in Trinidad and the opportunity to be a part of T&T’s oil and gas industry. We are enthusiastic about the prospects and the opportunities that this country offers and the blocks that we have.”