The people of La Brea have once again lost out on economic activity as Australian outfit BHP has decided to build its latest oil and gas platform outside of T&T.
The company confirmed that it will not be constructing the platform at La Brea claiming that the foreign bid was more competitive.
In an emailed response to a number of questions from the Sunday Business Guardian the company’s communications manager Judy Dane said a comprehensive analysis showed that the local bid was not as competitive as others they received.
“As far as the platform fabrication specifically, several local contractors were invited to submit bids during the process, only one did. A comprehensive analysis was done across all and the local bid was less competitive compared to the others,” Dane stated.
Sources indicate the platform is small compared to the other huge platforms that Tofco has built in the past for BPTT and that they could have easily handled the job.
Sunday Business has been told that the country cannot build a sustainable platform fabrication industry if the only company providing work is BPTT.
In fact, BHP has never built a platform in T&T and several other producers like EOG resources have bypassed La Brea.
In the past, the government has been vociferous about the failure of BPTT to build its platform in La Brea following the debacle when there were work stoppages and delays in its delivery. This time around there has been silence from the Rowley Administration.
Member of Parliament for La Brea, Nicole Olivierre, said she was disappointed by BHP’s decision not to build the platform at Tofco’s facility, saying it raises the question about the company’s commitment to local content.
Olivierre said she was aware that Energy Minister Franklin Khan had discussed with BHP the government’s interest in having the platform built in T&T. She, however, admitted to not being part of those discussions.
According to the parliamentary representative for La Brea, the decision is a loss for the country and her constituents who benefit from the economic activity generated by Tofco.
She said the extent of the loss depends on the size of the platform, including the baseload and the number of people who would have been employed.
“Any loss of work to Tofco will have a negative impact on the community as the company employs a large number of skilled workers and it’s a loss to T&T and tax revenues. So you really have to question the company’s commitment to local content,” Olivierre added.
Dane insisted that the Ruby project will lead to other opportunities for local suppliers.
“We are issuing EOIs (Expressions of Interest) for all goods/services associated with the Ruby project locally to maximise opportunities,” Dane stated.
Dane said specifically BHP plans to award 100 per cent of the Brownfield scope of work locally.
“This represents the entirety of the Brownfield onshore fabrication and offshore installation scope,” Dane stated.
She insisted that BHP had ordered more than $20 million in equipment locally since the project was sanctioned and to date spent in excess of $100 million to local vendors leveraging local resources or sourcing equipment internationally through local entities.
“For scopes where local companies do not have the capacity, we actively seek demonstration that international companies provide local content capacities in their proposals (eg local maintenance resources, freight forwarding, catering services, offshore logistics, construction/offshore labour),” Dane stated.
Dane said the project team is committed to continuing to pursue these opportunities described as well as seeking other opportunities to utilise local capabilities and build local capability within the country, for example hiring of nationals during the project to represent BHP for scopes such as inspections, HSE oversight, construction supervision.
BHP builds local capabilities by exploring opportunities to upskill nationals either directly on the project or indirectly, Dane stated.
In August the board of BHP approved its more than $3 billion Ruby and Delaware project in T&T.
The company announced the project is expected to add 16,000 barrels of oil to T&T’s crude production, or at current levels increase the country’s total production by 27 per cent.
It noted that its contribution to the project will be $1.92 billion with the other $1.08 billion coming from state-owned Heritage Petroleum and National Gas Company.
In a release on the company’s website it said: “The project has estimated recoverable 2C resources of 113.2 million barrels of oil and 274 billion cubic feet of natural. First production is expected in the 2021 calendar year and is estimated to increase production by 16,000 barrels of oil per day (bop/d) and 80 million standard cubic feet per day (mmscf/d) gross at its peak.”
The Ruby Project is located in the Block 3(a) development area of the North East coast, close to Toco.
“The project consists of five production wells tied back utilising the latent capacity of the existing processing facilities, proven technology of the existing operated asset, and newly acquired ocean bottom node seismic imaging.”
BHP president operations petroleum Geraldine Slattery said: “This is an important milestone for BHP in T&T. Ruby aligns well with our strategy of maximising value from our existing assets, bringing competitive near term value and volume growth.”