EN­ER­GY RE­PORTER

Af­ter months of ne­go­ti­a­tions, the Min­istry of En­er­gy and En­er­gy Af­fairs and BHP Bil­li­ton have moved one step clos­er to­wards sign­ing pro­duc­tion shar­ing con­tracts (PSC) for the ex­plo­ration of four deep-wa­ter blocks.

This has been con­firmed by Vish­nu Dhan­paul, per­ma­nent sec­re­tary in the Min­istry of En­er­gy and En­er­gy Af­fairs, who told the Busi­ness Guardian that both the min­istry and BHP are hap­py with the terms ne­go­ti­at­ed.

In a tele­phone in­ter­view on Tues­day, Dhan­paul said, "The agree­ment has been sent to the At­tor­ney Gen­er­al for vet­ting. In that con­text, I will not say that we have reached an agree­ment in the purest sense of the word, but I will say all the par­ties are hap­py with what has been ne­go­ti­at­ed. When it reach­es on the min­is­ter's desk, I will say we have a fi­nal agree­ment."

Dhan­paul said the agree­ment was sent to the AG's of­fice about three weeks ago and he has no idea when the AG will sign off on it.

In an in­ter­view At­tor­ney Gen­er­al Anand Ram­lo­gan said he did not know that the doc­u­ments were in his of­fice await­ing vet­ting, but in­sist­ed his min­istry gives "pri­or­i­ty to en­er­gy in­vest­ment."

BHP Bil­li­ton and its part­ners were award­ed all four of the deep­wa­ter blocks ap­proved by the Gov­ern­ment in the 2012 deep­wa­ter bid round. BHP Bil­li­ton and its part­ners were award­ed Blocks TTDAA 5, TTDAA 6, TTDAA 28 and TTDAA 29.

At the time of the award, the Min­istry of En­er­gy and En­er­gy Af­fairs said the four pro­duc­tion shar­ing con­tracts will see, in the first phase, at least six deep­wa­ter ex­plo­ration wells drilled and 5,330 square kilo­me­tres of 3D seis­mic.

"The four pro­duc­tion shar­ing con­tracts will see, in the first phase, at least six deep­wa­ter ex­plo­ration wells and 5,330 square kilo­me­ters of 3D seis­mic. This in­vest­ment has the po­ten­tial to in­crease eco­nom­ic growth, em­ploy­ment op­por­tu­ni­ties, for­eign re­serves and gov­ern­ment rev­enue, while se­cur­ing the coun­try's fu­ture as a ma­jor play­er in the in­ter­na­tion­al en­er­gy in­dus­try for decades to come," read the min­istry state­ment.

The min­istry added that ac­tiv­i­ty re­lat­ed to the award of the four PSCs is ex­pect­ed to gen­er­ate in­vest­ment of at least US$564.82 mil­lion in the manda­to­ry first phase and, at most, US$1,024 in sub­se­quent phas­es. This trans­lates to TT$3.6 bil­lion and TT$6.4 bil­lion, re­spec­tive­ly.

It con­clud­ed: "This bid round pro­vides a clear in­di­ca­tion of the high lev­el of con­fi­dence that in­vestors have placed in the econ­o­my of T&T. BHP Bil­li­ton is a di­ver­si­fied nat­ur­al re­sources com­pa­ny with op­er­a­tions in more than 100 lo­ca­tions world­wide with rev­enue of US$72 bil­lion at the end of its fi­nan­cial year June 30, 2012. BHP Bil­li­ton has op­er­at­ed in T&T for over 15 years."

The state­ment not­ed the tech­ni­cal eval­u­a­tion com­mit­tee es­ti­mat­ed the pos­si­ble gas re­sources/re­serves in these blocks at be­tween 2.4 and 23.6 tril­lion cu­bic feet and pos­si­ble oil re­serves of 428 mil­lion and 4,200 bil­lion bar­rels.

In win­ning Block TTDAA 5, BHP Bil­li­ton was able to stave off strong com­pe­ti­tion from sev­er­al con­sor­tia, in­clud­ing Rep­sol, Cen­tri­ca, BG T&T, Ele­nil­to, State Oil Com­pa­ny of Azer­bai­jan Re­pub­lic, Caspi­an Drilling Com­pa­ny and Cairn En­er­gy.

BHP Bil­li­ton al­ready op­er­ates in T&T in An­gos­tu­ra field where it found 300 mil­lion bar­rels of oil and 1.7 tcf of gas in what the com­pa­ny calls the Greater An­gos­tu­ra area off the is­land's east coast.

In the last 18 months, the Min­istry of En­er­gy has award­ed six blocks for ex­plo­ration in the deep wa­ter, four to BHP Bil­li­ton and its part­ners and two to BP plc.

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