The two largest oil and gas companies in the world, Royal Dutch Shell and BPTT were the only ones to bid for the rights to explore for oil and gas in the country’s 2018 shallow water competitive bid round.
The companies joined forces in joint bids for blocks 4 (c), U (c), and Lower Reverse L, which are all located East of Trinidad, where both companies already operate several blocks.
No bids were made for the other blocks that were available, namely NCMA 2 and NCMA 3, which are both located North of Trinidad, and 1 (b) which is West of Trinidad. This effectively means that half of the blocks were not bid on and there will be no competition in what was supposed to be a competitive bid round.
“It is quite promising to see that some interest has been generated despite volatile energy prices over the last three years in particular,” Khan told the gathering as the bids were revealed.
But the Minister admitted that he expected Shell to bid on NCMA 2 and NCMA 3, while he felt the potential for 1(b) was so small that only a company like DeNovo would bid on it because they are already operating in the Gulf of Paria.
Khan claimed that part of the challenge was the fact that three of the four largest energy companies in the world were already operating in T&T and therefore it would be a challenge for a new entrant.
The Energy Minister also criticised the recent media reporting on the sector, calling for “maturity and discretion” .
Khan questioned why his announcement that the country’s gas reserves had increased in 2017 when compared to the previous year had gotten little or no coverage. This is even though the increase was the first year on year since 2004 according to the 2017 Ryder Scott report.
“Other aspects of the industry get coverage you know...but its par for the course, we accept it as that, that’s what the media strives on but we have to be very careful that in telegraphing energy news a certain level of maturity and discretion has to prevail. This is an international business,” Khan said.
“This is a business of extremely high capital expenditure, this is a business that the positive consequences are enormous, but the negative consequences are equally grave and that is the level of maturity that we have to bring to the coverage of energy issues,” he added.
Khan said everybody has become an energy expert overnight.
“I like that because the interest is there but what I say is that we have to be guarded how we telegraph the news and the consequences that can flow,” he said.
When it was pointed out to Khan that not only had it been reported but, unlike past governments which released the report, the Rowley administration has not even made it available to Parliament, he then promised to make a condensed version available.
The T&T Guardian reported this increase on Oct 26 last year in an article titled “Reserves on the Rise”.
The 2018 Ryder Scott report is expected to be completed by August and an ongoing audit of the country’s oil reserves by Netherland, Seawell and Associates Inc is expected to be completed by the third quarter of this year.
Khan said the Government intends to launch a deep water competitive bid round next year.