As the protests against some of the measures announced in the 2017-2018 Budget reached to the doorstep of the Minister of Finance on the Divali holiday last week, one could not help but wonder...
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T&T needs oil master plan
As a coverall wearer who worked in the Pointe-a-Pierre refinery in my youthful days and later in the oil and gas producing fields in Forest Reserve as a petroleum engineer for Texaco Trinidad Inc, permit me to share a few thoughts.
I write in response to an April 14, 2017 article published in your newspaper regarding the topic “T&T needs oil master plan.” In the article, Mr Wilson Lalla, a person whom I have known and have great respect for, made statements that I think need clarification.
His statement “Petrotrin does not have the capital reserves or the operational efficiency to optimise oil recovery” is so blatantly true that it hurts. As engineers in those early large-volume oil producing years, we took pride in operational efficiency and the economic downhole intervention in all wells.
Mr Lalla spoke of “4,000 idle wells which could be brought back into production”; that is his perspective as an accomplished geologist. As an engineer with knowledge of those wells, I would be surprised if more than six per cent of those 4,000 wells could be economically revived. To do so would involve the infusion of large investment capital and require highly skilled and knowledgeable engineers. These engineers must not only know how to analyse and interpret well performances but also translate these interpretations with suggested course of actions into dollars and cents. Every recommendation by these engineers must be profit focused.
In the article Mr Lalla stated that “oil production dropped drastically from 230,000 barrels of oil per day in 1978 to 60,000 barrels last year.” So true. This drastic decline can be explained in part by natural oil and gas reservoir decline, and the effect of catastrophic mechanical failure due to wellbore collapse incurred from sand production.
This situation of significant production decline at Petrotrin was foreseen decades ago. You have production losses from aged wellbores, new wells not being drilled in sufficient numbers to maintain oil production, and natural reservoir depletion. The key question is, are these noted declines excessive when taking all of the above factors into account? Local petroleum engineers would be the best ones to answer this soul searching question.
In the said article, a suggested master plan for the T&T oil industry was “oil extraction from TAR sands.” Brilliant thought but unfortunately the lifting costs to do so would eat your economics alive. Mr Lalla’s statement that “the Government must create opportunities and incentives for investment and small companies given the opportunity to develop wells that are nearing their economically useful lives,” is spot on. There are a few local companies using highly experienced local field and engineering personnel that have seen economic successes.
Yes, a master plan is sorely needed, but it should be one that focuses on fully developing the engineering expertise of locals to deal with the challenges of economically producing oil and gas in Trinidad and Tobago.
In addition, management personnel and key decision makers should be de-politicised to guarantee cost effective best industry practices are enforced at Petrotrin.
Rather than simply pushing for personnel reduction, I think the focus should be to ensure an annual infusion of quality trained and dedicated local young men and women into the workforce. Dollars invested in the oil and gas industry for Student Apprentice and Student Technician programmes would also safeguard the industry’s future.
Mr Lalla’s statement that “the Government must create opportunities and incentives for investment and small companies given the opportunity to develop wells that are nearing their economically useful lives," is spot on.