The chief financial officer (CFO) of Spain's Repsol, which owns 30 per cent of bpTT, in a rare public comment on how T&T's largest oil and gas producer is doing, forecast BPTT production will be flat in the short term. Speaking about bpTT, which to Repsol is one of many assets in its portfolio, Repsol chief financial officer Miguel Martinez said: "Our estimate for 2013 in T&T, you know, it's an asset we do not operate, but our estimate is flat in comparison with 2012."
He was answering a question by Barclays Analyst Lydia Rainforth on November 8, during a conference call to announce Repsol's earnings for the third quarter of 2012. On the same call, Tudor Pickering analyst Anish Kapadia asked: "On Trinidad, we've seen production weak this year. I was wondering if you could give a production estimate for next year and then how you see Trinidad production evolving over the next five years or so."
Martinez responded: "In relation with the Trinidad production, our estimate, as I mentioned, is flat. So it would be-our estimate has been to produce the same this year. Though probably it's a very conservative approach, but it's an [unoperated] asset. And knowing that bpTT has been extremely conscious in all the maintenance and modifying the structure of the platforms, we want to be conservative.
"So, despite considering a flat production in T&T, we aim for a ten per cent increase in the global production of the company for 2013." Minutes later, Kapadia went for a straight answer and asked again: "Okay. And sorry, just on Trinidad, in terms of your longer-term production forecasts, just wanted to know are you expecting production to stay at that flat level over the next five years or so? Or do you expect production decline in Trinidad?"
Martinez responded: "Let me provide you some data first to put it in perspective what T&T represent for us, because it's true that the production level sounds big. It represents roughly almost 40 per cent of the total production of the Upstream. But if we move down to the earnings before interest and tax (EBIT) level, it only represents 15 per cent of the EBIT level.
"So those are a type of barrels with not much value. So having this in context, I would say that we expect an increase in the existing production once all the maintenance has finished. But, as mentioned, for the good or for the bad, those barrels are not the most profitable we have in our portfolio."
