The Gov­ern­ment has de­cid­ed to en­ter ne­go­ti­a­tions with British Gas T&T (BGTT) for the award of a nat­ur­al gas prone Block 5(d) months af­ter it had orig­i­nal­ly re­ject­ed BGTT's bid for the block. Ju­liana Boodram, per­ma­nent sec­re­tary in the Min­istry of En­er­gy and En­er­gy Af­fairs, con­firmed to the Guardian that it was the stand­ing com­mit­tee on En­er­gy of the Cab­i­net that de­cid­ed to ne­go­ti­ate with BGTT, even though the orig­i­nal bid did not meet the thresh­old. She said: "The stand­ing com­mit­tee con­sid­ered putting out the block for bid in the next bid round, but on con­sid­er­a­tion about the time it will take be­tween now and the bid round, and the fact that the BGTT bid had fall­en just short of the orig­i­nal min­i­mum bench­mark, we felt it pru­dent to give the com­pa­ny and op­por­tu­ni­ty to im­prove its bid with a view to meet­ing the min­i­mum stan­dards."

She said: "Let me make it clear: we have de­cid­ed to en­ter ne­go­ti­a­tions. The block has not been award­ed and will not be award­ed un­less we at the min­istry feel that BGTT has been able to im­prove its of­fer suf­fi­cient­ly." Boodram said the ne­go­ti­a­tions are be­ing led by her and as­sures that the Gov­ern­ment will not award the block and will go back out for bids if it is dis­sat­is­fied with the of­fer it re­ceives. "It is clear that the bid will have to be up to stan­dard," Boodram said. "As you are aware, this is not the first time that the Gov­ern­ment has de­cid­ed to en­ter in­to ne­go­ti­a­tions with com­pa­nies if they did not meet the min­i­mum bench­mark, if in the State's in­ter­est, we feel it is pos­si­ble to have the bid im­proved suf­fi­cient­ly to even­tu­al­ly award the block."

Block 5(d) is ad­ja­cent to Block 5(c), which is op­er­at­ed by BGTT, and which is be­lieved to con­tain in the vicin­i­ty of one tril­lion cu­bic feet of nat­ur­al gas. BG has ar­gued that be­cause of its op­er­a­tions in 5(c) it would sig­nif­i­cant­ly de-risk Block 5(d) be­cause even if it found quan­ti­ties in 5(d) that were less than a tcf of gas, it could be com­mer­cial­ly pro­duced be­cause of its in­fra­struc­ture in the area. BGTT pres­i­dent Derek Hud­son said he was pleased that the Gov­ern­ment has de­cid­ed to open up ne­go­ti­a­tions. Hud­son said: "We have been mak­ing the point that it made sense for us to get the op­por­tu­ni­ty to ex­plore this block, and some­times I guess, you have to con­tin­ue to press your case and hope that suf­fi­cient peo­ple see that it makes sense. So we are hap­py that we have got­ten the op­por­tu­ni­ty to en­ter ne­go­ti­a­tions and we will see how it goes."

Re­sponse from Con­rad Enill

For­mer en­er­gy min­is­ter Con­rad Enill told the Guardian that the pre­vi­ous ad­min­is­tra­tion has al­so looked at the is­sue and felt it made sense for BGTT to be giv­en an op­por­tu­ni­ty to ex­plore in the block. He said: "We felt it made sense, but did not award the block at that time be­cause we were close to go­ing out for bids and thought we would put it in. But it cer­tain­ly makes sense for the Gov­ern­ment to en­ter in­to ne­go­ti­a­tions and, hope­ful­ly, reach an agree­ment with BGTT for the ex­plo­ration of the block." On­ly re­cent­ly, the Gov­ern­ment al­so an­nounced that it will en­ter in­to ne­go­ti­a­tions with a con­sor­tium com­pris­ing BHP Bil­li­ton and Rep­sol af­ter its bid on a deep­wa­ter block was orig­i­nal­ly re­ject­ed.