The decision by Australian outfit BHP to allow the global energy sector access to its deep water seismic and well data it acquired offshore T&T is being hailed by industry insiders as a major step in the right direction. They say it is likely to significantly improve the Ministry of Energy and Energy Industries’ attempt to attract companies in its next deep-water bid-round.
A bid-round is where companies are invited to make offers to the government for different areas to explore for oil and gas. The offers usually include the acquisition of seismic and other data, the drilling of wells, the government/company split of the profits, should oil and gas be found, as well as a signature bonus if the area is considered prospective.
T&T has not had a bid-round in the deep water since 2014 and the government has been severely criticised for its lethargy.
Energy Minister Franklin Khan has defended the lack of a bid round saying to have a bid-round you must have acreage to bid.
“ In terms of the shallow water, most of the shallow water acreage and most of the shallow water prospective acreage are already under license so the real upside potential lies in the deep water but it would have made no sense to come out with a parallel deep water bid round when we were in the throes of a successful deep water programme,” Khan said.
He revealed: “Now that programme is completed we have now classed the data and we have made an important intervention here we have now agreed with BHP for the declassification of the deep water data so all the seismic and all the well information will now be packaged and added to which BHP will now be relinquishing acreage they do not want because that is part of the PSC (production sharing contract) after the exploration period you have to relinquish acreage that you do not plan to develop,” he said.
“So now we are in a position to have relinquished BHP acreage which in a sense will be geographically close to the discoveries and it will have important information both from its well information and its seismic programme bearing in mind that BHP at the point in time ran the largest deep water seismic survey in the world,” Khan said.
Khan said with the added data the government can now have a deep-water bid-round.
He, however, stated that deep water is the most expensive part of exploration and production.
“It is not shallow water it is not onshore so it calls for significant capital, all over the world international majors are constrained with capital so possibly now is not the time to go out to the market but having said that we will be in a technically good position to go back out with a deep water bid round in the latter part of this year,” Khan said.
Energy Consultant Helena Inniss welcomed the news saying it will allow for more competition on the blocks.
Inniss was a former Director of Resource management at the Ministry of Energy and has worked on many bid rounds.
She explained: “It will allow for the data to be assessed by companies with different ideas, possibly philosophies which could ultimately lead to more competition in the areas that are thought to be prospective.”
Winston Boodoo who was once the country manager in T&T for the French Major Total praised the move and agreed with Inniss that it will lead to greater interest.
He said normally companies hold onto that data and never share it.
Boodoo questioned if by making it available to the industry it may result in a commission for BHP if the data is bought or leased by potential bidders. But he said crucially the country will benefit.
“The most important thing in all of this is that in any bid-round the more well data you have available for the potential bidders, and the more seismic data you have for potential bidders, the better off for the country or the government will be to get good and useful bids, with some good commitments for further seismic and commitment with wells which is what you want,” Boodoo explained.
He added: “When you don’t have proper well data and seismic data companies tend to put in low and simple bids and then in the first phase of your exploration programme you would acquire more seismic, then you spend another year interpreting it and then you will consider in the second phase if you want to drill. So you will get low bids without good seismic data and it looks like the BHP data is a lot of very good data.”
Boodoo said BHP is involved in all the deep water blocks that were picked up last time and likely has the best data and the best prospects and are sure to retain those prospects and relinquish the rest.
He said it is also possible that BHP could relinquish some of its blocks because of the way in which the contracts are drawn up and then bid again on the very blocks and acquire them. This he noted had precedence as BG, now Shell, did something similar in its Dolphin block.
Inniss said she hoped others will follow in BHP’s footstep.
“Now that the holder of the largest amount of shallow water acreage in the shallow water is signalling by their shedding of geoscientists and engineers that their future in the hydrocarbon business may be a thing of the past, it would certainly benefit the country if they and others follow suit.” bpTT and Heritage are by far the largest holders of nearshore and onland blocks.
Khan expects the next deep water bid-round to take place at the end of the year.