A BHP Billiton-BG Group consortium signed two production sharing contracts (PSCs) with Government for T&T's deep water blocks TTDAA 3 and TTDAA 7 yesterday at the head office of the Ministry of Energy & Energy Affairs in Port-of-Spain.
BHP Billiton, the operator, holds a 65 per cent interest, and partner, the BG Group holds a 35 per cent interest. How the production will be shared among the BG Group, BHP Billiton and the Government, however, was not disclosed, consistent with the level of transparency surrounding PSCs in T&T.
The energy minister, and heads of the local units of the UK's BG Group, and Australia's BHP Billiton offered reporters few concrete answers to questions after the signing ceremony. Energy & Energy Affairs Minister Kevin Ramnarine left immediately after the ceremony through the door closest to the head table without mingling with ministry guests as customary.
With oil prices plummeting below national budgeted figures, as low as US$65 per West Texas Intermediate (WTI) barrel, both BG T&T president Garvin Goddard and BHP Billiton country manager Vincent Pereira were asked at what price would a discovery in the new deep water blocks be commercially viable.
Neither had a price. Neither would say what price local gas is averaging. Minister of Finance and the Economy Larry Howai has said the country's deficit budget will not deteriorate as long as gas prices remain above US$2.75 per million British thermal units.
Asked how much it is selling local premium Calypso crude for, Pereira would only say the price is closer to Brent (UK) crude. Brent closed trading yesterday at US$79.87 per barrel.When asked, Goddard declined to say what share Government and the other signatory parties have in the production sharing contract, "I wouldn't comment on the specifics of this production sharing contract but BG has many different contracts through which it produces and shares."
Asked about the Central Bank's monetary policy announcement Monday, which revised gross domestic product (GDP) growth downward 200 basis points to 0.5 per cent due to "dismal performance by the energy sector," Goddard said the shutdowns and output reductions were planned "to address safety and asset integrity issues" and also to receive gas from the new Starfish field which is expected to come into production this weekend.
"It's not output that is falling. It's output that is planned," he said.
More info
Blocks TTDAA 3 and TTDAA 7 are located in water depths ranging from 1500-2500 metres and are located approximately 145 kilometres off the east coast of Trinidad.
"Today's signing builds on the continued collaboration between BHP Billiton and T&T. We are nearing completion of the deep water seismic survey of Blocks TTDAA 5, 6, 14, 23(a), 23(b), 28 and 29, which commenced in March of this year. We are excited about the prospect of exploring in these new deep water blocks, in the hope that a successful effort will benefit all–our shareholders, and the Government and people of T&T," said Pereira.
BHP Billiton is the world's largest diversified global resources company. BHP Billiton's petroleum activities include exploration, development, production and marketing in several countries around the globe.