Energy Minister Kevin Ramnarine says he does not foresee oil prices remaining under US$50 a barrel in the short or medium term because that price is not sustainable and is "below the break-even point for some companies here in T&T.""It will certainly render the North Sea and US Gulf of Mexico oil production un-economic," he said in a pre-recorded video message on the second day of the T&T Energy Conference at the Hyatt Regency Hotel, Port-of-Spain.
Ramnarine, who was out of the country along with Prime Minister Kamla Persad-Bissessar attending Monday's Caribbean Energy Security Summit in Washington DC, said while T&T is not immune from the negative impact of the international oil and gas environment, eventually the local energy sector will rebound.
"We have been here before in the mid to late 1980s, in 1998 and again in 2008/2009. Each time the price of oil has recovered and the industry has survived and moved forward. In fact the service companies that survived the downturn of the 1980's are today the largest service companies in the country.," he said.Ramnarine said the Ministry of Energy engaged petroleum consultants Netherland, Sewell and Associates of Dallas to conduct an audit of T&T's crude oil reserves.
"The results of the crude oil audit as at December 31st 2011 showed proved reserves were 199.5 million barrels of oil, probable reserves 85.5 million barrels of oil and possible reserves 124.8 million barrels. The total crude oil figure of the proved plus the probable plus the possible reserves for crude oil was 409.8 million barrels," he said.
"The country's condensate reserves, which are associated with natural gas production, were evaluated in the annual natural gas reserves audits conducted by Ryder Scott Company and at year-ending December 31, 2011, showed proved reserves at 43.5 million barrels of condensate, probable reserves of 24.4 million barrels of condensate and possible reserves of 30.8 million barrels of condensate. The total condensate figure therefore estimated by Ryder Scott Company at 98.7 million barrels of condensate."
The minister said this showed that the country "has tremendous potential to produce more oil" and on that basis the ministry launched its 2013 onshore bid round. As a result, he said, licences have been signed with Range Resources, Lease Operators Ltd and Primera Oil and Gas out of which there will be 12 land-based exploration wells greatly adding to activity on land in coming years.
Ramnarine said the ministry is considering two bid rounds in this year for land and nearshore acreage and for deepwater acreage."We will however gauge the appetite of the companies in this low-price environment before we proceed with more bid rounds," he said.He said several critical contractual obligations would soon be up for renewal, including the BG/Chevron contract with the NGC which expires in December and bpTT's contract with the NGC which expires in 2018.