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Deepwater bid round ‘a major success’
Twelve of the world’s oil and gas companies are competing against each other to search for hydrocarbons in Trinidad and Tobago’s deepwater. In what is the most successful bid round in more than a decade, and the first time that there is going to be real competition for blocks in the ultra deep waters off Trinidad and Tobago, five of the six blocks were bid on with no block attracting fewer than two bids.
Last year 11 blocks were offered for bids and there were bids on only three blocks and in 2007 eight blocks were offered and there was only one bid which was subsequently withdrawn. Not only were there twelve bids on the five blocks, but the bid round attracted both the major local companies already operating in Trinidad and Tobago as well as new players with extensive deepwater experience.
Trinidad and Tobago Deep Atlantic (5) was the most competitive with four companies and consortia bidding for the right to look there for hydrocarbons. A consortium comprising Repsol, BGTT and Centrica bid for the block while BHP Billiton went it alone in TTDA (5). Also competing for the block is a consortium of El Enilto from Israel, Socar (the national oil company of Azerbaijan) and Caspian Drilling Company. Trinity E and P and Cairn Energy also have a joint bid for the block.
BHP Billiton Trinidad which operates the Angostura field bid on four blocks and its President Vincent Pereira told the Guardian it is part of the strategy to grow their business in Trinidad and Tobago. “We believe here is a good place to do business and we want to grow it which explains our aggressive approach in this bid round,” Pereira said. Kosmos Energy, which was a partner with Tullow Oil that discovered the massive Jubilee field in Ghana, has also thrown its hat in the ring with bids on two blocks north of Tobago.
Energy Minister Kevin Ramnarine could hardly contain his excitement as he said the success of the deepwater bid was due to the several measures that he had undertaken since becoming Minister of Energy not the least of which was the reprocessing of the seismic data.
He said: “The companies had complained that in the last bid round they could not see the cretaceous source rock so they were not sure if it had oil or gas and by reprocessing it they could see the rock.” Ramnarine also argued that aggressive marketing by the team in the Ministry of Energy led by him but including a mix of new professionals and the leadership team from several state enterprises made a big difference.
The Energy Minister said the success of this bid round could only be compared to the 1999 bid round in which the world’s majors all tried to find oil in the deep water, specifically on the slope off the continental shelf. He said: “The 1998 deepwater bid round included blocks on what we call the continental slope and they were therefore not in the truest sense deepwater blocks. That bid round attracted bids form Shell, Exxon and Agip among others. The eventual drilling campaign while proving the existence of a working hydrocarbon system did not find oil or natural gas in commercial quantities.”
Ramnarine said it appeared that the Ministry was now getting the balance right between wanting to maximise the returns to the country and making the blocks attractive. He said the decision to allow companies to recover 80 per cent of their cost was attractive in addition to the potential of billion barrel fields. He said: “Many senior geologists have told me that they believe that there are giant oilfields in the deepwater. I too believe that.”
Ramnarine said although the bid round was a major success there were companies that have told him they were unable to bid in this round because they had enough acreage at the moment or that they were in the process of reorganisation. He said three have already committed to bidding when the next deepwater round comes up in 2013.
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