Touchstone Exploration Inc.

9 September

Cascadura delivers first gas

Canada-based Touchstone Exploration Inc announced a significant milestone as the Cascadura natural gas and liquids facility delivered first gas production. Touchstone has an 80 per cent operating working interest and the Heritage Petroleum Company Ltd has the remaining 20 per cent in the Cascadura field, on the onshore Ortoire block .

Touchstone said natural gas and associated liquids production started on September 6 and the company intends to increase gross aggregate natural gas output from the Cascadura-1ST1 and Cascadura Deep-1 wells to 60 MMcf/d plus associated natural gas liquids over the coming weeks.

Paul Baay, president and CEO of Touchstone, said:

“The commencement of production from Cascadura marks the most significant milestone to date in the Touchstone journey, transitioning us to a majority natural gas weighted production company. Our fixed-price natural-gas agreement will deliver a significantly increased predictable cashflow stream to be reinvested in the future development of our extensive Trinidad asset base.”

Cascadura represents the second producing area on the Ortoire block, where the company has multiple defined development prospects, alongside a significant pipeline of long-term exploration prospects.

Touchstone said the facility operates as a self-contained system, capturing all natural gas from the separators and liquids storage tanks and recycling it back into the system to increase sales volumes. It sustains its own power requirements through onsite solar systems and natural gas generators and is entirely independent of the Trinidad and Tobago power grid.

The facility has a designed gross production capacity of 200 MMcf/d and 5,000 bbls/d of associated liquids, with a current gross production capacity of 90 MMcf/d and 2,250 bbls/d of associated liquids (17,250 boe/d). Constructed over the past year, the installation represents approximately 110,000 work hours of local employment using contractors and fabrication facilities.

Natural gas volumes are transported through a 20-inch pipeline constructed and operated by NGC and sold under an Ortoire natural-gas sales agreement executed in December 2020. Condensate volumes will be transported via tanker trucks to the company’s Barrackpore liquids sales facility and sold to Heritage in accordance with a Cascadura field liquids sales agreement of September 1.

Baay said the company will now focus on optimising Cascadura production and plan a future drilling programme to fill the existing Coho and Cascadura facilities.

 

NGC lauds Touchstone gas

2023, 09/09

The National Gas Company (NGC) will purchase gas from the Cascadura field, following a gas sales contract previously signed with Canadian company Touchstone Exploration. after Touchstone announced that it delivered its first gas from the Cascadura field on September 6.

NGC, said this milestone was doubly important for NGC as the company was responsible for the construction of associated infrastructure that facilitated the tie-in of the Cascadura facility to the domestic network.

The project entailed design, procurement, construction, and commissioning of 1.6-km, 20-inch buried natural gas pipeline with associated pig launcher and pig receiver stations at the ends of the pipeline, to tie the Cascadura wells into NGC’s existing 30-inch onshore natural gas transmission pipeline. This infrastructure can take up to 220 MMscfd of dry natural gas from the Ortoire block.

Giving more insight into the project NGC said construction was initiated by NGC in September 2022 and completed in July 2023, followed by commissioning and start-up in September 2023.

“This project was planned and safely executed using NGC’s in-house teams, utilising 100 per cent local content, and demonstrated NGC’s technical services capability, resilience, and execution agility. The project was completed within its planned schedule and budget. Under a gas sales contract signed with Touchstone in 2020, NGC will purchase gas produced from the Cascadura field to meet its domestic supply obligations.”

NGC President Mark Loquan stated, “This week marked the culmination of many months of dedicated work to prepare for the delivery of the first gas from Cascadura. Given the supply challenges we face as a maturing energy province, it is promising to see production ramping up from onshore fields. After the Coho facility delivered its first gas in October 2022, this is the second gas development in the Ortoire block, and we congratulate Touchstone and Heritage on the Joint Venture Partner efforts. We also thank our internal teams for their hard work and sacrifices to deliver on milestones and support the realisation of this important project.”

 

 

Shell TT

Adam Lowmass, was introduced by former country chair Eugene Okpere during a courtesy call on Energy Minister Stuart Young at the ministry.

Lowmass has expertise in mergers, acquisitions, divestment, strategy development, business transformation and capital projects.

 

Energy Minister Stuart Young and senior vice president and country chair, Shell TT, Adam Lowmass during a courtesy call at Young’s office on Thursday. – Photo courtesy Energy Ministry Minister Stuart Young and Shell TT country chair, Adam Lowmass

Young thanked Okpere for the “excellent relationship” between Shell and the government and said he looks forward to continuously working with Shell as a major stakeholder within the energy sector. He reminded the company that Trinidad and Tobago remains an attractive location for investment and trade.

 

Shell and NGC amends contract to include Manatee

2023, 09/23

NGC president Mark Loquan, left, shakes hands with Shell T&T outgoing senior vice president and country chair, Eugene Okpere. Looking on are: Minister of Energy and Energy Industries Stuart Young, standing left, and Shell T&T incoming senior vice president and country chair Adam Lowmass at Hilton Trinidad and Conference Centre yesterday.

The National Gas Company of T&T (NGC) and Shell Trinidad and Tobago (Shell) signed an amended domestic gas sales contract to incorporate a share of the natural gas volumes from the Shell-operated Manatee field, once the project is sanctioned. Energy Minister Stuart Young and principals of the signatory companies. attended the signing at the Trinidad Hilton.

NGC said the amended gas sales contract will entitle it to purchase gas produced from one of the country’s largest offshore fields, to supply the downstream sector across the medium term.

In 2019, the Governments of TT and Venezuela executed an agreement to allow each country to independently develop its share of hydrocarbons from Loran-Manatee Gas field,, across the T&T- Venezuela. maritime border

Shell and NGC are working assiduously to monetise this asset—Shell as the operator responsible for development and production and NGC that will facilitate receipt and processing of the gas via its Beachfield facility.

Shell country chair, Eugene Okpere said, “This domestic gas sales contract is further evidence of Shell’s commitment to partnering with the Government to achieve its goal of energy security. Today also marks a critical step toward enabling Shell’s next milestone of Final Investment Decision for the development of the Manatee project.”

NGC president Mark Loquan applauded the efforts made to realise this milestone agreement.

“Manatee represents a significant resource for T&T, and every step we take toward bringing this field online brightens our prospects for future domestic supply. Our teams have laboured to bring us to this point, and we acknowledge with deep gratitude the quantum of work delivered, as well as the impact it will have on our country. We do recognise that we have some distance to travel before we can access gas from Manatee, but we are committed to the outcome and optimistic that we can bring this project to fruition, in partnership with all stakeholders.”

Manatee, part of a larger Loran—Manatee field straddling the Venezuela and T&T maritime border, is estimated to hold total proven reserves of about 10.25 trillion cubic feet with Venezuela owning 73.75 per cent of the joint field and T&T owning the remaining 26.25 per cent.

 

 

T&T, Venezuela sign deal to exploit Dragon Gas Field

2023, 09/21

T&T and Venezuela signed an agreement to jointly explore Dragon Gas Field, located in the maritime area of Venezuela. Energy Minister Stuart Young and Venezuela’s Oil Minister Pedro Tellechea signed the agreement at Miraflores, official residence of the president. The ceremony was broadcast on Venezuela’s national television.

President Maduro highlighted the agreement as a “historical” and “exemplary” fact about how two nations, T&T and Venezuela, can join forces to establish agreements that benefit their respective peoples.

“This signing of this agreement to introduce technology and pipelines to begin producing gas in Venezuelan seas is an enormous message of peace and will generate resources and wealth to invest in our people,” said Maduro.

On Wednesday, Maduro met Young, with whom he signed agreements for joint gas exploitation.

At the signing ceremony, Maduro said: “Trinidad and Tobago and the Bolivarian republic of Venezuela as good neighbours and brothers, we have taken a gigantic step! With the signing of the agreement to work the Dragon Field in Venezuelan waters that will lead us to produce together, a project that was lost from sight. It is a message of peace, of complementarity, solidarity, exercised and shared sovereignty.”

Within the framework of the signing of the gas exploitation agreements with T&T, Maduro reported that Venezuela has immense gas reserves in the Caribbean that place that country in fourth place in the world.

“We are the first oil reserve and now we are opening all investments in gas. I spoke with President Xi Jinping and China is coming with great investments and great technology to produce gas in the Venezuelan Caribbean Sea, in win-win relations. T&T and Venezuela have decided in peace to jointly exploit the Dragon Gas Field. It is the next step we have to take, so that we can see how two sovereign countries can work together,” he reported.

Attending the event with senior officials of the Venezuelan government, Vice President Delcy Rodríguez said that it is an historic step..

“For Venezuela it represents an historic opportunity to develop the gas industry for the benefit of our people, for the economic development of our people, but also the impact it has on the good neighborly relations of brotherhood that have been established and woven between two countries. of our region.”

The agreements with Port-of-Spain have been signed “within the framework of legality and international law” to develop the gas industry in favour of both peoples.”

The agreement comes at a good time to work for a common goal “as brother peoples of this region, who share a wonderful Caribbean space and it is a time to highlight the dimension of having carried out these negotiations.”

 

 

Trinidad and Tobago, Venezuela sign gas deal

PM Dr Keith Rowley shook hands with Venezuelan president Nicolas Maduro at the Miraflores Palace in Caracas following the historic signing of energy deal. Monday, 5th December, 2016.

Trinidad and Tobago and Venezuela signed an inter-institutional agreement for the joint production of gas from the Dragon Field, a deal that has been in the works since 2018. Venezuelan President Nicolas Maduro announced the signing of the historic deal saying the signing of the agreement was a “message of peace, solidarity and shared sovereignty.”

A publication from the Venezuelan Government said the agreement would allow for the installation of pipelines in Venezuelan waters to produce gas in a joint venture between the two countries. TT Energy Minister Stuart Young and Venezuelan Minister of Popular Power for Petroleum and president of Petróleo de Venezuela Pedro Tellechea signed the deal.

“We are going to produce gas together, TT and Venezuela in a sovereign manner is a powerful signal for the Caribbean. Sooner rather than later (we will) convert all this gas with the technology that you manage well, into wealth,” Tellechea said.

The Dragon deal was first signed in 2018, by Prime Minister Dr Keith Rowley and President Maduro with the National Gas Company (NGC), Shell and PDVSA. The deal was for a pipeline from Venezuelan waters to Trinidad and Tobago, which had an estimated cost of US$1 billion.

Turmoil in Venezuela led to the deal being shelved in 2019, prompting the TT Government to seek alternative prospects by studying development options to produce gas from the crossborder Loran-Manatee Field, on the Venezuelan-Trinidad boundary.

Last year TT applied for the right to be exempted from US sanctions placed on Venezuela. The US Office of Foreign Assets Control (OFAC) granted TT a two-year licence allowing for the commencement of the deal. However as a requirement of the deal, TT was not allowed to provide cash payments to the Venezuelan state-owned enterprises.

Analysts question Dragon US$1B funding

2023, 09/07

Anthony Bryan, Co-founder of the Caribbean Policy Consortium and former professor and director of the Institute of International Relations at UWI Trinidad, believes even if Venezuela were to be compensated for investment in the Dragon Gas Field project now, it will t be another three to five years before T&T starts to benefit.

“As far as the venture itself is concerned, the question is whether key market conditions exist for a successful joint venture programme between Venezuela and T&T. Even if the matter of payment issues were settled now, natural gas from the Dragon Field is probably at least three to five years in the future. Natural gas resources are expensive to develop, and projects today must clear multiple financial investment challenges.”.

On August 29, Energy Minister Stuart Young met Venezuelan President Maduro in Caracas to discuss developments on the Dragon Gas Field.   Reuters reported that Shell and Trinidad and Tobago National Gas Company (NGC) are close to agreeing to credit Venezuela’s state-run oil firm, PDVSA, for its US $1 billion investment in a gas field the three want to develop jointly.

Reuters reported, if agreed, the move could speed a long-stalled offshore development.

The US in January granted Venezuela’s PDVSA, Shell and NGC a two-year authorisation to revive the project, which could boost T&T’s gas processing and exports. Reuters quoted sources saying. much of the US$1 billion that Venezuela wants recognised as its contribution belongs to a nearly-completed gas line connecting the offshore field to Venezuela’s shore.

The field is in Venezuelan waters and past efforts to find partners for its development stumbled over PDVSA’s demands for compensation. Shell and NGC have not given final word to PDVSA on the reimbursement, but are prepared to pay for all legitimate claims.

Under a non-disclosure agreement signed between T&T and Venezuela, no details have been divulged so far about the state of negotiations Bryan added that there is no final word on the reimbursement as of this date. Impact of sanctions on Venezuela have been profound.

“The harsh reality is that any deal is subject to US approval via the Treasury Department’s Office of Foreign Assets Control (OFAC) because of US sanctions on Venezuela. Despite the best efforts, the T&T government has been unable to get the US to adjust its terms with respect to payment to the Venezuelan government.

They effectively constitute a blockade of the country’s hydrocarbon industry. Beyond limiting the ability of PDVSA to sell oil in the international market, US sanctions have also made securing oil infrastructure parts nearly impossible.

The country’s ability to maintain its oil and gas infrastructure is declining rapidly. The US-led blockade also results in firms refusing to do business with Venezuela to avoid running afoul of US sanctions despite not necessarily violating unilateral coercive measures.”

Referring to the Reuters report, he remains cautious. while welcoming any agreement.    “While the report that Shell and NGC are close to an agreement to credit PDVSA for its $1 billion investment in the Dragon field to revive the project, would be welcome news, I am aware that Venezuelan energy experts have been cautious about this new sanction exception given that crucial details from the negotiation between T&T and the Biden administration, as well as the negotiations with the Venezuelan government, are still unknown. In my opinion, the complication around the Dragon deal is one of energy pragmatism, where international geopolitics has once more trumped economics.”

Reuters also reported that under the terms agreed to date, Shell would become field operator with NGC and PDVSA holding equity stakes. PDVSA, which holds a license issued by Venezuela for development, would bring in Shell and NGC as partners under that authorisation.

“The parties are considering two separate gas lines: A line now partially built to transport PDVSA’s portion of the gas to Guiria, on Venezuela’s eastern coast. A second could connect to Shell’s Hibiscus field on Trinidad’s side, allowing gas to flow to Trinidad. Venezuela suggested that all the gas pass through Guiria, so only an additional short pipeline would be needed to link Guiria to Point Fortin, home of Trinidad’s liquefied natural gas export plants.”

Dr Francisco Monaldi, director, Latin American Energy Program, Rice University’s Baker Institute for Public Policy, told media if there is merit to the Reuters information that there could be two pipelines, with one allowing Venezuela to redirect gas to its internal market, it may not be attractive to T&T and Shell.

“This means that PDVSA can re-direct the flow to the domestic market and that takes away one of the most significant attractions of the project, which would be that basically the gas can only be monetised through Shell and through Trinidad and can’t be for other uses.

“In terms of the US$1 billion, I think that’s more a matter of numbers. As far as I understand, the investments are not the ones that normally accompany a private transaction recognised at all because the pipeline is not of interest to partners in Trinidad and Shell and the investments that have been done on the platform are very inadequate so there has to be additional investments. So recognising this investment would not happen in a commercial transaction because they are not useful for the purpose of exporting gas to Trinidad.”

He said the deal would only be sealed if it is an attractive proposition for T&T and Shell.

“I don’t know if the other parties will accept another pipeline to Guiria. If I were in the shoes of T&T and Shell, I would not. But I understand that it’s an attractive proposition for PDVSA because it would finish something they wanted to do for a very long time, which is bring some of that gas to the domestic market. But that’s an obstacle from the perspective of the other side. I don’t know if it will succeed.”

Former Energy Minister Kevin Ramnarine told media that the Reuters report raises a number of questions as it relates to transparency. Although he emphasised that in the absence of an official statement from the two Governments, Reuter’s report would be speculative at this point.

“The article raises a number of questions. What is the exposure of the NGC in this reported US$1 billion credit arrangement? Given the potential to significantly expose the NGC, there is obviously a concern. How was that figure of US$1 billion determined, or is it speculation? What percentage of that liability is with NGC? I assume this is Venezuela making a claim for the sunk costs associated with the wells drilled and the related pipeline. Has the NGC sought an independent assessment of the integrity of those wells given that they were drilled and shut in over 10 years ago? Finally, how does all this sit with the OFAC license of January 2023?”

He advised, given the fact that NGC is involved, there should be full disclosure to the public via the Parliament or a joint Select Committee on energy.

“The subsea infrastructure in Dragon has to be assessed by NGC and Shell. I don’t know if that has been done yet.”

 

European interest in Dragon Gas Field

2023, 09/03

Director of the Latin American Energy Program, Rice University’s Baker Institute for Public Policy, Dr Francisco Monaldi believes that the latest meeting between T&T and Venezuela over the Dragon Gas Field negotiations could be a “win-win” for both countries.

Energy Minister Stuart Young met Venezuelan President Nicolas Maduro in Caracas and while Venezuela’s Government issued a short release to the media, it gave no details about what was discussed.

Caracas is currently engaged in negotiations with Port-of-Spain to export natural gas from Venezuela’s Dragon Field, estimated to hold up to 4.2 trillion cubic feet (tcf) of natural gas reserves. The operations would be run by Dutch multinational corporation Shell.

As T&T and Venezuela have been tight-lipped over details, Monaldi said he is not sure where in the negotiations both sides have reached but the meeting shows that the gas negotiations are “on the agenda” for both countries.

In March 2023, officials from both countries signed non-disclosure agreements required to establish the negotiation framework. That followed the January 2023 decision by the US administration to issue a two-year licence to T&T to commence the Dragon project following lengthy appeals by Port- of-Spain and its neighbours.

“The negotiations that are ongoing are very interesting for Venezuela from two angles and it could be a win-win for both countries. The main angle is that they will use this as the hook for Venezuela to get the Europeans interested in pushing the United States to make the sanctions more flexible. The Europeans are interested in the gas that will be exported to T&T and its potential for onshore uses. President Maduro has this covered in that it is geo-politically important.

“The second issue is the amount of money that he might get. I believe that he believes that he can get more out of it. The deal will eventually happen as it is just a matter of President Maduro getting something more.”

T&T urgently needs new natural gas sources to supply its industrial plants, currently operating below capacity.

The Energy Chamber of T&T in January said gas from this project will provide natural gas for the downstream petrochemical and LNG sectors, helping secure jobs, foreign exchange and continued business opportunities.

In July, Prime Minister Dr Keith Rowley said negotiations over the Dragon field had reached a stumbling block.

“The Venezuelans have not accepted the terms laid down by the Americans. That is the long and short of it. We fought very hard to get the Americans to give us a carve-out, which is to allow us to treat with PDVSA without breaking the sanctions; we eventually won that battle but they put a condition on it that the Venezuelans as of now have not accepted. We’re still talking on both sides; we’re still negotiating.”

The Dragon gas field project is located on the Venezuelan side of the north-western maritime border with T&T. It was scheduled to start production over a decade ago. However, sanctions by the US administration, as well as lack of capital, delayed the production start of the field.

The licence allows T&T to undertake business related to the Dragon field with Venezuela’s sanctioned state-run oil company PDVSA, owner of the natural gas field.

Monaldi also referred to a possible loan from the European Union (EU) that could assist Venezuela in transporting gas to T&T and then send it on to the EU.

In July, Bloomberg reported that Venezuela is in early-stage talks with the EU on a US$1.5 billion plan to capture its methane emissions and export them to the bloc as natural gas with the help of Italian multinational Eni SpA and Spanish company Repsol SA. The project would use a portion of the EU’s Global Gateway Initiative funds to gather emissions from Venezuela’s idle oil wells and deteriorating infrastructure.

That gas would be sent to T&T to be liquefied and shipped on to Europe bolstering the EU’s gas supplies amidst Russia’s war with Ukraine.

Monaldi said Venezuela’s Government is using the Europeans as a leverage to pressure the Americans to concede more during the negotiations.

“The Europeans are lobbying very hard for the United States to do whatever is needed to get the Dragon project so as to get LNG exported to Europe.

Joseph Borrell, the EU’s Foreign Affairs Representative, said Venezuela is a big part of the solution to the problem of supplies of natural gas in Europe over the next few years.

“He was talking about the Dragon project but also about the collection of the gas being flared from fields in Venezuela. With the loan they are talking about, it is to get the gas to T&T. So the Europeans are lobbying hard to get the United States to have a natural gas policy on Venezuela that’s more flexible. The Europeans care more about natural gas than oil.”

 

 

 

Energy lifeline

24 September

PM Dr Keith Rowley and Venezuelan President Nicolas Maduro celebrated at the Miraflores Palace in Caracas following the historic signing of an energy deal.

Signing of the Dragon gas deal with Venezuela and the award of deepwater blocks to a bpTT -Shell consortium has given TT energy a lifeline.

The Energy Minister announced the award of three deepwater blocks to the consortium, a longed-for result since TT received just four bids in the 2022 deepwater bid rounds, the first since 2014.

With exploration evidently only of interest to companies with existing investments in the petrosector, attention must turn to the potential offered by a successful conclusion to the five-year negotiations with Venezuela over the Dragon field. The Prime Minister first shook hands on the project with Venezuelan President Nicolas Maduro in August 2018 as a hopeful TT looked to a mutually beneficial partnership with its closest South-American neighbour in exploiting a rich and proven natural gas field capable of producing between 150-300 million standard cubic feet of gas per day (mmscf/d).

If that sounds small compared to TT’s September output of 2.5 billion standard cubic feet of gas per day (bscf/d), Dragon is one of four fields in PDVSA’s Mariscal Sucre project which together are projected to deliver 1.2 bscf/d from reserves of 4.2 trillion cubic feet of natural gas. TT had 11.5 trillion cubic feet (tcf) of proven natural gas reserves in 2016, a resource in steady decline since 2005. At the current rate of natural gas consumption, TT natural gas resources will decline in a decade.

In January, US President Joe Biden granted TT a waiver on 2019 Venezuelan sanctions allowing the Dragon deal to go forward, but the question of paying Venezuela for access to its sovereign asset remains. Even with the two-year waiver, TT cannot pay for Dragon access with cash. The PM breezily dismissed this codicil and presumably has an arrangement with Venezuela that satisfies the limitations of the US Office of Foreign Assets (OFAC) waiver.

Sanctions also ended plans to jointly exploit the Loran-Manatee cross-border field. Shell will develop the field for TT and deliver at least 150 mmscf/d to NGC from the 2.7 tcf of gas – roughly a quarter of the reserve – which lies within TT borders. First gas is expected in 2028.

The immediate benefit of access to the Dragon field is its proximity to the mature but active Hibiscus field off north-western Trinidad. The Dragon journey makes the Hibiscus connection across 18km of shallow water seem like a technical hop compared to the torturous politics that have beleaguered Dragon so far. While exploration of the deepwater blocks continues, the rejuvenation of natural gas depends on successful and expedited exploitation of Loran-Manatee and Dragon.

TT must emphasize the incremental gains it won regarding the field on terms that work within the limits of the OFAC licence. While sanctions on Russian petroleum products were not as effective as expected, global markets remain hungry for hydrocarbons from less problematic sources.

Heavyweight team join forces for three blocks

22 September 2023 Amanda Battersby in Singapore

A partnership of UK supermajors BP and Shell reached agreement with the Trinidad & Tobago government to explore three deep-water blocks. Minister of Energy Stuart Young confirmed .The duo is understood to be eyeing gas reserves that could help support the country’s liquefied natural gas project and supply feedstock for petrochemical industries.

The companies agreed terms for exploration blocks 25a, 25b and 27 with government, however, they have yet to finalise a deal for Block 23, for which they also bid. Young admitted that the negotiations were complex with the energy heavyweights because the blocks had not previously been explored and due to the challenges involved in deep-water development.

“The consortium can confirm that they are close to finalising negotiations with the Government of Trinidad and Tobago relating to deep-water blocks offshore Trinidad & Tobago,” BP and Shell said in a joint statement.

The agreement comes almost nine months after Trinidad’s government rejected bids originally submitted by the consortium for failing to meet minimum thresholds.Shell and BP amended their original bids to include the drilling of at least three deep-water wells under a proposed minimum work campaign. The proposed workscope reportedly also includes 3D seismic surveying.

Shell and BP are both partners in Trinidad’s Atlantic LNG export project, which has nameplate capacity of 15 million tonnes per annum. Output has been around two-thirds of that because of a lack of feed gas, with one of the four trains having been offline since late 2020.

The Cabinet approved the award of three deep-water blocks to a consortium of BP and Shell on 8 September, Young said and an official signing ceremony is planned for 26 September. The office of the attorney general has to sign off on the deal before the licences can be awarded, Reuters reported.

 

 

Ministry awards deep water blocks to bp – Shell consortium

22 Sep 2023

Trinidad’s Ministry of Energy awarded three deep water blocks to a consortium of bp and Shell. At tThe award ceremony on 26 September, 2023 the parties will sign the material Production Sharing Contracts (PSCs).

The Ministry of Energy and the consortium have been engaged in complex negotiations over the terms and conditions of the PSCs having regard to, inter alia, the fact that the blocks to be awarded are located in deep water and required different and novel considerations due to the nature of the expected exploration and possible future production. Minister Young expressed his pleasure at the fact that these blocks will be awarded and what it means for Trinidad and Tobago as the deep water is a new frontier in the country’s hydrocarbon development.

Source: Ministry of Energy and Energy Industries

 

Energy Ministry to sign off on deepwater licences

   21 sep

Energy Minister Stuart Young announced the award of three deepwater blocks to a consortium of bpTT and Shell, following the 2022 deepwater bid rounds. Cabinet took the decision on September 8, and an award ceremony will take place on September 25 when the consortium will sign the material Production Sharing Contracts (PSCs) to seal the deal.

“The Ministry of Energy and the consortium have been engaged in complex negotiations over the terms and conditions of the PSCs having regard to the fact the blocks are located in deepwater and required different and novel considerations due to the nature of the expected exploration and possible future production,” Young said.

In December 2021, Young announced the bid rounds after positive reviews in the 2020 Ryder Scott report. There was interest in TT’s deepwater fields, but there were still factors to be considered, given the changing global market and added pressure for energy transition prompting companies to be more cautious about entering new areas of exploration.

Some 17 deepwater blocks were put up for bid, but during the bid rounds, at the end of the 2022 energy conference in June, only four were bid on by a consortium of bp and Shell.

The consortium bid on block 23 – about 20 kilometres off the eastern coast of Tobago – blocks 25(a), 25(b) and 27, all about 100 kilometres from the east coast of Trinidad.

“A lot of these energy companies have been forced by their shareholders to take decisions where they cannot invest in new provinces,” he said during the bid rounds . He said the consortium was a great positive for TT.

BpTT completes offshore pipeline to Galeota

S

bpTT, as part of its goal to be net zero by 2050, s successfully completed its Trinidad Offshore Pipeline Replacement (TOPR) project which installed a 96 kilometer, 12-inch pipeline that will transport liquids from offshore facilities to be processed onshore at the bp terminal at Galeota, replacing a previous pipeline which had come to the end of its design life.

The critical infrastructure upgrade will enable continued, safe and reliable operations. TOPR was one of several investments undertaken in the last five years to improve the integrity of the bp pipeline and liquids handling infrastructure, aimed at supporting future gas developments .

Horizontal drilling at Galeota

David Campbell, president of bpTT said, “We see the role gas continues to play, especially here in TT. We are focused on helping to unlock TT’s energy future and are investing in projects that enable the development of the country’s natural gas resources.”

The new infrastructure has been safely integrated into its operations.

 

Marubeni

23 September

A delegation from Marubeni Power International Inc. with general manager overseas Ryota Kobayashi, and Marubeni Power International of South Jamaica (SJPC) chairman Mo Majeed discussed gas as a transition energy in TT with Energy Minister Stuart Young, MEEI permanent secretary Sandra Fraser and Sandra Welch-Farrell.

In an update on operations, Kobayashi said that Marubeni remains supportive of gas as a transition energy in areas or regions such as TT where gas is an indispensable form of energy and renewable energy is being added to the energy mix. He noted that TT assets have been best performing among other sizable power generation portfolios of Marubeni International Inc. This is in terms of its technical performance with equal attribution to good and co-operative relationships being built with its TT partners including the Government as a shareholder.

Young said. “Gas is more than a transition fuel as it is going to be around for decades as a cleaner burning fuel when compared to substances such as coal. However, it is part of this country’s energy policy to bring more renewable energy onto the grid, especially by looking towards prospects of wind energy generation along the South-Eastern coast,”

Hydrogen was also discussed as Young shared his vision for TT to become a regional leader in adding renewables to the energy mix. He mapped out the areas of action and identified opportunities for synergies including private sector investment. Young thanked Marubeni for its partnership and expressed the desire to continue working with the company to deliver investments and benefits to the people of TT.

 

 

Tringen profit jumps 56% in 2022

2023, 09/24

Majority state-owned ammonia company Trinidad Nitrogen (Tringen) declared after-tax profit of $1.45 billion in its financial year ended December 31, 2022, 56 per cent more than the company earned in 2021, according to the company’s audited financials. Tringen’s 2022 financial report, signed by auditors EY on July 21, 2023, was laid in Parliament on September 11.

The company generated $5.18 billion in net revenue in the 12 months ended December 31, 2022, which was 66.5 per cent more than the $3.11 billion that was generated in 2021.

Last year was a profitable year for ammonia producers, as the price of the commodity rose sharply following Russia’s invasion of Ukraine in February. Ammonia prices peaked at US$1,635 per ton in June of 2022 and has since declined by nearly 47 per cent to US$870 per ton on July 27th, 2023..

Tringen is owned 51 per cent by National Enterprises Ltd (NEL) and 49 per cent Yara Caribbean (2002) Ltd.

NEL is listed on the Trinidad and Tobago Stock Exchange and is majority owned by the Government via Corporation Sole (66 per cent). Wholly state-owned National Gas Company owns 16.67 per cent of NEL and the balance is owned by about 5,000 individual and company shareholders, most of whom are resident in T&T.

Yara Caribbean (2002) Ltd’s ultimate parent company is Yara International ASA, the Norwegian chemical company that produces, distributes and sells nitrogen-based mineral fertilisers and related industrial products.

Tringen paid out $855.96 million in dividends in 2022, with NEL receiving $436.54 million and Yara Caribbean (2000) Ltd receiving $419.41 million.

Tringen manufactures anhydrous ammonia at two independent production plants known as Tringen I and Tringen II. Tringen I was commissioned in 1977 and has an annual capacity of 500,000 metric tonnes. Tringen II started up in 1988, with a capacity of 495,000, according to the Ministry of Energy website.

All production from Tringen I and II are sold through sales agency agreements, with a related party, believed to be a Yara entity, on the open market.

Tringen is managed and operated by Yara Trinidad Ltd, a wholly owned subsidiary of Yara Caribbean (2002) Ltd under the terms of a management and operating agreement dated May 6, 1976, as amended.

The agreement expired on December 31, 2018 and was renewed for a further five-year period beginning on January 1, 2019.

According to notes in the financial statement, effective January 1, 2021, Tringen agreed to amend the terms of the agreement, whereby Tringen reimburses Yara Trinidad Ltd for all direct costs and 90 per cent of the total indirect costs incurred in carrying out its obligations.

“This agreement also allows Yara Trinidad Ltd to provide the services of its employees as it deems necessary for the management and operations of the company. The net reimbursements amounted to approximately $258.38 million,” according to the notes.

 

 

Green transition constrained by cost

2023,  09/08

Countries globally are choosing to invest in greener sources and moving away from fossil fuels for energy generation and fuel. Though T&T is one of the highest per capita emitters of greenhouse gases in the Caribbean, wealthier countries are substantial polluters from extracting oil and gas. Decades later, these countries are better financially positioned to invest in the transition from fossil fuels for energy to greener sources from solar, geothermal, hydroelectric and wind.

T&T, with an economy supported by natural gas and its by-products, cannot make the transition as fast as others for chiefly one reason–the price.

As Mark Loquan, president of the National Gas Company (NGC), explained at the launch of the Caribbean Climate Investment Programme (CCIP), “If you look at the realities, why then are we not moving as fast as possible? Why, then, are renewables not [developing] five times faster? Ten times faster? And the answer is it takes money. Two, countries have other things to consider, like education, poverty, etc. Three, the technology doesn’t exist for that size.”

Loquan said this transition will take decades, but NGC can play an integral role.
“This is going to take decades, so this is not going to be solved by next year. Gas–which is clean as far as fossil fuels are concerned, is transportable, can be compressed, can go from any side of the world to the next–is needed. Gas is an essential part of the sort of fossil fuel continuation and part of the needed clean energy transition.”

Stressing the importance of natural gas to the country, Loquan explained that with ten ammonia plans and seven methanol plants, T&T is one of the largest exporters of both petrochemical by-products, producing nearly 20 per cent of the world’s ammonia, which is integral for fertilisers.

Though this process of extracting ammonia from hydrocarbons emits carbon dioxide, a greenhouse gas, Loquan said, “We need to capture it. We need to sequester it, so you need to clean up your estate.”

This also comes at a cost. Per year, the world needs anywhere from US$2.4 trillion to US$4 trillion, emphasising the need for investment from different sources. Loquan concluded his remarks at the launch of the new financial facility for climate investment, the CCIP, with support for building an ecosystem of players in the energy space while pursuing projects to limit emissions.

“It’s not cheap, and it’s not free. We are building a bridge that says let’s focus on our energy security, and let’s focus on reducing emissions.”

 

 

Trinidad and Tobago lead in renewables

Opening a new National Petroleum Marketing Co Ltd (NP) service station in Mayaro,. Energy Minister Stuart Young said Trinidad and Tobago is a leader in efforts to develop renewable energy resources in Caricom.

Young told his audience that while he was en route to Mayaro he “saw the real effects of climate change and coastal erosion. That is why we will continue to do our part and we will move more and more towards renewables being an important part of our grid.”

TT was a leader in Caricom in this regard.

“We have begun construction on a solar project that will generate 112.2 megawatts (of electricity), Project Lara.”

The Prime Minister, Young and Public Utilities Minister Marvin Gonzales turned the sod for this project in Brechin Castle, Couva on April 12. In October 2021, Finance Minister Colm Imbert said the estimated cost to build the plants is US$100 million.

Project Lara is a joint venture of multi-national energy giants bp and Shell and specialist solar energy company Lightsource bp. At the time, Dr Rowley told the audience Project Lara represented part of TT’s strategy to maximise the benefits it receives from oil and natural gas, tap into the economic potential offered by renewable energy and keep its commitments under the Paris Climate Agreement. When operational, the two plants could provide at least ten per cent of power to the national electricity grid.

Young also said, “We are also moving towards wind generation of energy production, electricity production. We have completed the initial studies and are going to the next phase.”

Young hoped that work on this initiative could progress quickly.

Addressing an energy conference on January 23, Rowley disclosed that Government was seeking coastal locations for wind farms around TT

“Of all the potential renewable energy sources in TT, offshore wind offers the largest potential for the country with a projected output of approximately 25 gigawatts of levelised energy.”

 

 

Reverse energy decline

2023, 09/23

Oil and gas are the lifeblood of the economy, which is borne out by the fact that the annual budget is pegged on these respective prices. In the 2023 budget, the Government based its revenue assumptions on oil and natural gas prices of US$92.50 per barrel and US$6 per mmbtu. However, he sector has had its fair share of challenges in recent years.

With the national fiscal package to be unveiled at the start of next week, former energy minister Kevin Ramnarine and energy expert Anthony “Tony” Paul. have commented on the situation.

As, oil production continues its “death march” Ramnarin urged Government to speedily implement stronger incentives to reverse decline.

“Three things need to happen to increase investment in energy. One is that the Government needs to be awarding more acreage. We are going to be officially awarding some deepwater blocks next week, but those will be the first deepwater blocks awarded by this country since 2014. We would have awarded three deepwater blocks in nine years and that simply does not cut it.

“Secondly, the fiscal regime around the energy sector does not excite investors so we need to look at the barriers to investment.”

He also recommended that Government examine the “whole ease of doing business” in the energy sector as regulatory approvals take too long.

“I have no problem with regulation, but the Government agencies need to move faster with how they grant approvals.”

He said it seems the Government currently has no plans for the Pointe-a-Pierre refinery.

“It is basically wasting away and turning into scrap metal,” he said, adding, “We cannot allow a valuable asset to be wasted as we spent US$1.7 billion to upgrade that refinery between 2006 and 2014.”

There are plants in the refinery that are almost “brand new.”

Ramnarine also seeks more transparency on the signing of the Dragon deal between this Government and the Venezuelan administration.

“This is the third Dragon deal that has been signed since 2016. We need to know what commitments were made on behalf of the people of T&T and how soon we can expect gas to arrive from Dragon.”

Fuel prices is another issue which needs to be addressed. The former energy minister advised that current Energy Minister, Stuart Young, needs to give the population a “clear indication” as to how he plans to manage the subsidy in the next 12 months, considering that oil prices have now rebounded to about US$90 a barrel.
Ramnarine also wants definitive statements in the upcoming budget on wind energy and hydrogen.

“That’s part of our future and we need to start planning and implementing those things.”

Paul, a leading expert in the sector for 40 plus years, also advised that a new vision and strategy is required for T&T’s energy sector which should be aligned to the country’s realities and “a deep understanding of the possibilities and aspirations as a people.”.

Noting that the energy sector is a “complex industry,” Paul said in the past, sector leaders have made significant decisions with “severe consequences and no accountability for their actions.

“Often these were made in isolation, based on their understanding of one or more aspects of the industry, but blind to the follow-on effects of those decisions. Even the best experts know that they do not have a full appreciation of all the inter-related components of the oil and gas business, so collaborate with other experts in systems that ensure any risks are understood and mitigated and that those responsible for decisions or actions can be held to account.”

He emphasised commitment in putting the interests of the population first, including future generations with sensible and enforceable policies across the value and decision chains. There must also be regulatory overhaul which include institutions taking into account administration, people, process as well as the regulatory framework encompassing laws, regulations, contracts, licenses, permits, orders, etc. Paul advised that there must be respect for and adherence to laws and regulations as well as knowledgeable and trusted civil society watchdogs.

Paul who has had various roles including within the Government, State and private sectors (including with multinationals) noted that T&T has a great deal of remaining oil, onshore in under-explored areas and in the Gulf-of-Paria. There is much remaining natural gas, including in smaller fields under licence to international operators, who have no interest in developing these small fields. There idle or underutilised high value assets, including storage tanks for crude and refined product with supporting ports and terminals as well as processing plants and pipelines.

With the right leadership, people and strategies, T&T can pave a better way forward for its energy future as this will achieve increased investments, increased activities, increased in-country value retention, increased production and an increase in job creation in the sector. This will also result in the export of oilfield skills, goods and services, enhance T&T’s industrialisation, increase the export of goods and services and leverage the oil and gas sector for economic diversification.

In further presenting a snapshot of the state of T&T’s sector, Paul noted declining investment in T&T’s energy sector, the need for more jobs in Science, Technology, Engineering and Maths (STEM).

“The issues facing the sector are systemic and not new”.

Since 2004, successive ministers of finance have outlined the intention to reconstitute the Permanent Petroleum Pricing Committee of the Ministry of Finance. This is the body, created under the Petroleum Taxes Act of 1974, to make sure that T&T collects its fair share of oil and gas revenue by preventing tax avoidance via transfer pricing.

“As far as I know it has not functioned since and is still not functioning. You may recall the “Spotlight on Energy” of March 2018, when the Prime Minister called attention to tax avoidance. The current state of alarm among citizens and the media may be a sense that the waning prosperity of the nation is not short term or perhaps not even temporary.”

 

 

 

US$10 m fund to build resilience in South Oropouche River Basin

Minister of Planning and Development Penelope Beckles spoke at the Multi-Sectoral Adaptation Measures to Climate Change in the South Oropouche River Basin for flood relief session meeting at the Debe Secondary school. –

Penelope Beckles, Planning and Development Minister launched a landmark US$10 million project aimed at building climate resilience of the South Oropouche River Basin (SORB) population and ecosystems to flooding, sea level rise and expected increasing water deficit events.

While these are among some of the most damaging climate risks already being experienced in the Woodland area, “This project will not solve the flooding problem and its impacts. There is no silver bullet that will climate proof any country. This is the reality. But it will increase resiliency in many areas, which, if properly implemented, will decrease the severity of flooding and climate risks and their associated impacts on livelihoods. This project is therefore a good starting point, leading to comprehensive adaptation over time and in the long term.”

Bernardo Requena, Country Representative, Latin American Development Bank (CAF), agreed that the success of the four year project will depend largely on community engagement as those who live and work there would be able to contribute to the solutions that work for them.

Beckles said it is the first grant- funded national project under the Adaptation Fund – Multi-sectoral Adaptation Measures to Flood Relief in the SORB, the first, and only beneficiary of this landmark grant.

Factors including, vulnerability to flooding and climate risks, population density, commercial, agricultural, and cultural activities and impacts on citizens, as well as the size of the catchment, led to its selection of SORB for this initiative.

With floods, droughts, wildfires, heatwaves and dire consequences on crops, livestock and general comfort, Beckles said,

“It is no longer a futuristic phenomenon. The future is already here. We are now seeing more intense rainfall where a greater volume of rain is falling in less time,” she observed pointing to increased temperatures causing increased evaporation of water and the expectation if more goes up, then more will come down. She told the mainly local audience that they know more than anyone the perennial flooding that this watershed experiences and the associated suffering that ensues.

“And this is projected to become even worse as climate change continues.”

She noted the damage the frequency and intensity of flooding has caused in the Woodland area, resulting in staggering economic losses and the disruption of the ecological balance with long-term consequences for biodiversity and ecosystems.

“You would agree that we cannot afford this anymore and for all the obvious reasons which inevitably leads to flooding.”

Over two decades ago, climate models projected less cumulative rainfall, which will lead to droughts and water shortages, “which we are already experiencing, which are affecting potable water availability and agricultural productivity. Additionally, sea-level rise is leading to saltwater intrusion into freshwater sources, endangering our coastal communities, impeding agriculture, damaging livestock and altering natural ecosystems.

“This is already being experienced in the Woodland area. So the picture is not a rosy one, and through this project, we are acting with urgency. While the world continues to strive to constrain temperature increases to at least 1.5 degrees Celsius, we need to not only adapt to the climate risks that are already being posed, but also to the risks in the short to medium term.

“Building capacity to withstand these impacts, or climate resiliency, is therefore clearly a necessity.”

This is precisely why this project is designed to address flooding through a holistic approach, encompassing infrastructure improvements, early warning systems, and community engagement.

“It seeks to create a basin-wide strategy that integrates the efforts of various sectors, including agriculture, water resources management, and disaster preparedness.”

She noted the genesis of the project at the 25th Conference of Parties to the climate change convention in Madrid, when government representatives spoke to senior executives CAF to develop a project to address climate risks, particularly flooding in the SORB. Follow up discussions with CAF and UWI, key stakeholders including agencies and ministries, as well as regional corporations, developed a project proposal for submission to the Adaptation Fund. She acknowledged the contribution of the South Oropouche Riverine Flood Action Group to the design of the project.

“Their years of data collection and observation proved to be invaluable in informing what needs to be done under the various activities of the project.”

Community groups pledged commitment to work with CAF and the different agencies to increase resilience in the area.

 

 

Deepwater exploration key

2023, 09/27

Government officially awarded three deepwater blocks off Trinidad’s east coast to a consortium of bpTT and Shell T&T. Signing for their respective entities were David Campbell, president of bp Trinidad & Tobago, Stuart Young, T&T’s Minister of Energy, Eugene Okpere, Shell’s senior vice president and country chair and Paula Drakes, Commissioner of State Lands.

It is no secret that this country’s production levels of oil and natural gas are not where they ought to be.

As such, continued exploration on land, shallow water and particularly in T&T’s deepwater province, is the key to maintaining this country’s “world-class energy sector,” said Energy Minister Stuart Young.

He made the comments at the signing of the Deepwater Production Sharing Contracts for blocks 25(a), 25(b) and 27, located off Trinidad’s east coast, to a consortium comprising BP Exploration Operating Company Ltd and BG International Ltd (Shell).

Young said this country aims to maintain an active upstream sector as it is imperative to its future sustainability and energy security.

“We have had significant exploration in both the onshore and shallow water provinces but there is a large area of our deepwater province that is unexplored. This will be addressed through bid-rounds.

“The positive effects on reserve replacement will result in increased upstream activity, which then boosts investor’s confidence in the country’s ability to pursue downstream projects. It is no secret that the levels of petroleum production in the country are not where we would like them to be. As such, continued exploration on land, shallow water and particularly in the country’s deepwater province, is the key to maintaining our world class energy sector.”

Globally, deepwater production is expected to climb to 17 million barrels of oil equivalent per day in 2030.

T&T has the potential to be a significant deepwater player.

“In this regard, we will continue to collaborate with world-class upstream operators to optimise the development of our hydrocarbon province and to provide a competitive fiscal environment that encourages investment.

“The PSCs we are signing here today (yesterday) are also the result of the recognition of the importance of remaining competitive to attract investment. From the inception of this bid round process, we were faced with the rising economic costs of upstream oil and gas projects and an uncertain global energy market,” he further stated.

The minister also noted that to stimulate further interest from upstream investors, fiscal incentives as outlined by the Minister of Finance in the 2023 budget statement were approved and implemented by Government.

In a joint statement, bpTT and Shell said they will each own 50 per cent of the three blocks. The energy companies indicated bpTT will operate Blocks 25(a) and 25(b) and Shell will operate Block 27.

David Campbell, president of bpTT said: “For more than four decades bpTT has been operating off Trinidad’s east coast and the deepwater represents the next major province for this country’s indigenous energy development. We are looking forward to this exciting new era of exploration and production in the deepwater of Trinidad and Tobago combining our knowledge of the country’s geological systems and our global deepwater expertise.”

Eugene Okpere, Shell T&T’s senior vice president and country chair, said: “This acreage represents the next phase of exploration for the Country, and we are keen to leverage our vast global Deepwater experience in this new development. Together with bpTT, we will be better than the sum of our parts, merging our technical and commercial know-how to build value today, tomorrow and in the future for Trinidad and Tobago.”

The bid proposals were reviewed by a technical evaluation committee and an overview committee established by Cabinet and comprising representatives of the Ministry of Energy and Energy Industries, the Ministry of Finance and the Office of the Attorney General.  The reports and recommendations of these committees were then submitted for Cabinet’s approval.

Arising from this process, Young said Cabinet authorised negotiations between the consortium and the Ministry of Energy to seek improved fiscal and technical terms to the PSCs.