State-owned Petrotrin has decided on a major change in its exploration and production strategy by attempting to reverse the decline in its crude production by enhanced oil recovery (EOR) rather than going after new oil by wild-cat drilling.
In his first interview on efforts to turn around the fortunes of the company, Petrotrin chairman Andrew Jupiter told the Business Guardian that the strategy was simple: "Where oil has already been produced, there is more oil to be found."
Professor Jupiter told the Business Guardian: "Most experts will agree that we have only produced somewhere between 15 and 20 per cent of our oil in place. So, in the past we have found oil and we have only been able to bring to market less than one fifth of the oil in the ground. We believe that using enhanced oil recovery we will be able to produce another 10 to 15 per cent of oil in place."
He revealed that Petrotrin was in discussions with two companies that are interested in working with it to bring on additional crude oil using EOR. He also revealed that Petrotrin has approved Range Resources using EOR on two farm-out fields that it operates on behalf of Petrotrin as it tries to get more oil out of the ground.
Energy consultant Dr Krishna Persad has for years argued that Petrotrin should pursue EOR as a means of increasing its production, even predicting that the state-owned company can in five years increase its crude production by 100,000 barrels of oil per day (bo/d) if it implements the use carbon dioxide as a means of enhancing oil recovery.
Dr Persad said it can be done for a fee that is significantly lower than international prices and can be done profitable at US$40 to US$45 a barrel of oil.
He recently told Business Guardian: "We have made recent approaches to Petrotrin trying to encourage them to go into CO2 (carbon dioxide) and we are prepared to provide not just CO2 that is commercially viable at today's oil price, but we have also offered to provide them with expertise in CO2 enhanced recovery," said Dr Persad.
Dr Persad added: "We are also prepared to provide them with the expertise which would enable the company to choose the projects they should do and help manage those projects until their people are able to take them over."
He pointed out that with the exception of steam injection the state-owned company has not been involved in EOR. He said Petrotrin can triple its crude production without drilling another well.
The energy consultant said: "Other than the steam injection, EOR is a small part of Petrotrin's total oil production. We know that from the oil discovered and developed in their fields, Petrotrin has left 80 per cent of the oil in the ground. By the use of EOR they can at least double the oil they have already produced, which is 2.5 billion onshore and in the Gulf of Paria."
The decision to go after EOR is different from that of the last board which instead relied on going after never before discovered oil by using the company's newly acquired 3D seismic as the basis to find more black gold.
However, that has proven costly with a failed exploration well and a cash-strapped company unable to put out more money in a low-price environment on exploratory wells with no guarantee of success.
Jupiter–who is a retired Permanent Secretary at the Ministry of Energy, the former chief technical officer in the ministry, the former president of the National Energy Corporation and a Professor of Petroleum Studies at the University of the West Indies–described his job as chairman of Petrotrin as the hardest in his life.
He explained that the company's challenge has been made worse by the 15 to 20 per cent annual decline in its production which requires constant workovers of wells and the drilling of developmental wells, all of which cost money.
Jupiter also revealed that Petrotrin will be making its 3D seismic survey data available to companies who may have an interest in drilling in the company's acreage.
He said: "Part of Petrotrin's strength is the acreage that we control. We have spent a lot of money acquiring data via a 3D seismic programme. We believe that we should make the data available to our partners who have been working with us as lease operators, or farmouts, but also to other companies that may have an interest. This is necessary because we believe that fresh eyes, fresh interpretation may help unlock more and more oil."
"We have a lot of bright young people, local entrepreneurs who have all kinds of ideas and potential to unlock the hydrocarbons and we must give them support. We must give them an opportunity to do this. But it will require funding and they must be supported," Jupiter added.
He lamented that Petrotrin also had to improve its technical capacity saying if the company and its personnel have done the same thing over and over without achieving good results, then there need to be changes. This may mean some employees having to be moved into areas where they will improve their performance or new talent will have to be found.
In an interview on Tuesday, Jupiter told Business Guardian that he was grateful for the support of the unions and the board and promised that the company will produce a new strategic plan by the end of his first year as chairman that will guide the company into the future.