Shell preferred bidder for shallow water block

25 September (Reuters)

Trinidad and Tobago selected oil and gas producer Shell as the preferred bidder for a shallow water block, beating out bids from BP (BP.L) and EOG Resources (EOG.N).

Trinidad and Tobago has in recent years struggled to feed its liquefied natural gas and petrochemical plants as natural gas production declines. The government organized bidding rounds while pressing producers to deliver first output from offshore projects.

Shell and BP are the two largest shareholders in Trinidad’s flagship 15.3 million tons per annum Atlantic LNG project. They have been trying to boost output to secure feed gas for the liquefaction trains. Shell is in negotiations with the government on terms for working on the Modified U(c) block, the most contested of 13 areas offered in a shallow water auction last year.

The 13 areas collectively hold estimated resources of some 13.4 trillion cubic feet of gas, according to official data. As part of the shallow water auction, which closed in May, EOG was the sole bidder for the Lower Reverse L block and NCMA 4(a). BP was the sole bidder for NCMA (2).

 

 

 

Shell secures highly contested shallow water block

25 September

The Government of Trinidad and Tobago and BG International Ltd (BGI), a subsidiary of Shell, signed a Production Sharing Contract for Block Modified U(c), the most highly contested block in the recent Shallow Water Competitive Bidding Round.

EOG Resources Trinidad Ltd and BP Exploration Operating Co Ltd also submitted bids for Block Modified U (c) during the Ministry of Energy 2023 Shallow Water Bid Round, which closed in May.

Energy Minister Stuart Young stated that the signing of the PSC demonstrates the “commitment and goodwill of all stakeholders,” underscoring their dedication to the future of Trinidad and Tobago’s energy sector, particularly in the shallow water environment.

The signing took place at the Atlantic LNG Administrative Building, Clifton Hill, Point Fortin. Prime Minister Dr Keith Rowley, who witnessed the signing, congratulated the Energy Ministry and Shell for completing the PSC negotiations for Block Modified U (c) in record time.

The 2023 Shallow Water Bid Round opened October 2 last year and closed on May 27. The preferred bidder notification was sent on August 23 and BGI accepted on August 29. Negotiations began on September 11. After the successful negotiation of mutually acceptable improvements in the areas of commercial and technical terms to the Production Sharing Contract, on September 26 2024 the Cabinet approved the award of the PSC to Shell subsidiary, BGI.

The Prime Minister stated that this was an example of the Government promise to deliver. At the signing ceremony, Young stated that the PSC agreement reflects its acknowledgement of the necessity to maintain competitiveness and attract investment in a volatile global energy market and that the Government continues to review and improve the fiscal regime to foster upstream investment. One such incentive was the provision of concessions on the Special Petroleum Tax (SPT) for operators in onshore and shallow water sectors.

The award of the Block Modified U (c) PSC was the result of a very comprehensive and transparent process, as all bid proposals from the 2023 Shallow Water Competitive Bidding Round were reviewed by a Technical Evaluation Committee and Overview Committee established by Cabinet. These committees comprised representatives from the Ministry of Energy and Energy Industries, Ministry of Finance and Office of the Attorney General.

Young thanked teams at the Energy Ministry, particularly acting chief technical officer Terrance Ali, who led the negotiations for the PSC and Shell for “displaying dedication, professionalism and commitment to ensure that mutually beneficial terms were agreed on in record time.”

The Ministry stated that the successful award paves the way for the acquisition of seismic data days after the PSC, utilising the PXGEO 2 seismic vessel which is already in Trinidad and Tobago. Young toured the vessel and met its specialist crew on September 26.

The vessel’s assignment spans three major projects, including:

1. 1. 1. seismic surveys of deep-water blocks awarded as a result of the 2021 Deepwater Competitive Bidding Round;
      2. seismic surveys at the Manakin-Cocuina field, after a cross-border unitisation agreement was successfully negotiated in July;
      3. and the pending seismic survey of Block Modified U (c).

“The PXGEO 2 seismic vessel is equipped with seismic acquisition systems including Sercel Sentinel solid streamers and Sercel G-Source II energy arrays. For the specific protection of marine life during marine surveys, the vessel sails with a team of marine mammal observers (MMO) and passive acoustic monitoring operators (PAMO) trained to visually watch and acoustically monitor the presence of marine mammals and sea turtles. When an animal is detected, specific protocols are taken to minimise any interactions.”

bp completes 5th critical infrastructure update in 6 years

2024. 09/09

First hydrocarbons have been transported successfully from bpTT Beachfield gas receiving facility to its Terminal at Galeota Point for processing—completing the integration of this new infrastructure into its existing operations. The news came in an official statement confirming the completion of its replacement pipeline project—its fifth infrastructure upgrade project in six years.

David Campbell, president bpTT, said,

“Our Ocelot project is the fifth critical infrastructure upgrade project that we have undertaken in the last six years in service of preparing our operations for the future. This asset integrity project was essential to be able to safely provide gas to meet our existing contractual obligations and prepares our operations for the next wave of gas developments. This is another demonstration of bpTT’s commitment to the nation and to unlocking the energy future of Trinidad and Tobago.”

In an image released by bp Trinidad and Tobago dated 6 Nov. 2023, an employee works on a section of the pipeline replaced during the Trinidad offshore pipeline replacement (TOPR) project, to facilitate the transportation of liquids from production facilities offshore to the terminal at Galeota point. The project was completed in 2023.

The project included the installation of 13 kilometres of new pipeline, measuring six inches in diameter and was installed along the current pipeline corridor. The existing pipeline, which has come to the end of its design life, has now been taken safely out of service. This critical infrastructure upgrade project helps underpin safe and reliable operations, and follows the recent Trinidad offshore pipeline replacement (TOPR) project completed in 2023. During the TOPR, some 96 kilometres of 12-inch pipeline was replaced to facilitate the transportation of liquids from production facilities offshore to the terminal at Galeota point.

bpTT says the gas business in Trinidad and Tobago “plays a key role delivering resilient hydrocarbons in support of bp’s strategy and in helping bp become a simpler, more focused and higher-value company.”

 

 

bpTT completes Ocelot project upgrade

9 September

BP Trinidad and Tobago (bpTT) announced the completion of its fifth infrastructure upgrade project in six years.“ As part of the milestone, first hydrocarbons were transported from bp’s Beachfield gas receiving facility to its Terminal at Galeota Point for processing—completing the integration of this new infrastructure into its existing operations.”

The project included the installation of 13 kilometres of new pipeline, measuring six inches in diameter and was installed along the current pipeline corridor. The existing pipeline, which has come to the end of its design life, has now been taken safely out of service.

This critical infrastructure upgrade project helps underpin safe and reliable operations. This project follows the recent Trinidad offshore pipeline replacement (TOPR) project completed in 2023 which involved the replacement of 96km of 12-inch pipeline for the transportation of liquids from bp production facilities offshore to the terminal at Galeota point.

 

 

Proman TT local cadet to captain vessels.

Having already trained 12 University of TT (UTT) students aboard its new methanol-fuelled fleet, Proman TT’s executive chairman Claus Cronberger hopes to see one of the deck cadet graduates captaining their ships.

“The Proman UTT cadetship programme is a partnership that provides young people from TT with opportunities to achieve their potential while cultivating the next generation of seafarers. Our commitment to youth training has long been a focus for Proman, and our dream is that one of these fantastic cadets goes on to captain one of our vessels in the future.”

The year-long cadetship programme is a collaboration between Northern Marine and the university’s Centre for Maritime and Ocean Studies (CMOS). It is designed for students completing the diploma in maritime operations – navigation/engineering programmes at UTT. Launched in 2022, Proman said it was designed to bridge the gap between academia and real-world experience.

On completion, graduates of the cadetship programme receive a professional certificate of competency from the Maritime and Coastguard Agency in the United Kingdom. This certification enables graduates to work as deck and engineering officers locally and internationally. CMOS assistant Prof Vivian Rambarath-Parasram described the programme as providing exceptional opportunities for cadets to train on advanced, greener vessels, which aligns with the global push for decarbonising shipping by 2050.

“Both our cadets and faculty are excited about the prospects this collaboration brings, contributing to a more sustainable maritime future.”

Apart from practical training, Northern Marine Group fleet manager Thomas Muir said the programme gives cadets an understanding of the realities of working in the shipping industry.

“It is fantastic to see the commitment of the cadets, and I hope their stories help inspire others to pursue a career in the industry.”

One of the latest participants is former ASJA Boys’ College San Fernando pupil Anthony Neeranjan, who was always fascinated by the sea and would often accompany his uncle to Trinidad’s north coast to watch ships entering the Gulf of Paria. In August, he took up the role of deck cadet on the methanol-fuelled 49,900 DWT tanker, the Stena Pro Patria. According to the marine tracker website, the vessel left Brazil on September 15 for a 14-day voyage to Houston, Texas.

He described the opportunity as a “privilege.”

One of the biggest benefits of the programme is the ability to get the UK certification. The programme has delivered on its promise of giving cadets hands-on experience.

“I have been very fortunate to work alongside competent and experienced seafarers from many countries from around the world. I accompanied them during mooring, anchoring, cargo, bunkering, vessel maintenance operations and maintaining a safe environment on board. During my time on board, I sailed across the Pacific Ocean, Atlantic Ocean, transited the Panama Canal and visited many ports around the world to conduct operations in countries including USA, China, Korea, Belgium, Spain and Brazil.”

Apart from opening his eyes to the world, the programme has given him an appreciation for the beauty of TT.

“In my perspective of all the places I sailed to, Trinidad stands out the most. Apart from the warm feeling of being home and the breathtaking view from the Gulf of Paria, there lies so much potential within this small island when you consider the infrastructure and facilities we possess. We are also one of the largest methanol producers in the world. I have seen so many different types of vessels enter and depart our waters for operations similar to other prominent ports. I’m very optimistic for our maritime sector in developing young professionals.”

Also taking part in the programme is Jared Odain-Samaroo, who joined as a deck cadet on the Stena Pro Patria in October 2022. He is now a junior officer, having completed a three-month assignment aboard the Stena Promise between April and July.

Like Neeranjan, he too believes the real-world, hands-on experience is invaluable.

“One specific example of this is navigating in restricted visibility. The experience from three different aspects, the classroom or simulator, as a deck cadet and as a junior officer have all culminated in improving my professional competency and development.”

He believes the programme helps develop the calibre of seafarers in TT.

“This programme offers unique opportunities that are not widely available, as it provides a comprehensive suite of support systems, from enrolment to external licensing exam preparation and full certification, setting it apart in its structured approach to development.”

 

 

 

Heritage records $1.48b profit

Year end report for September 2023

SOC Heritage Petroleum reported a profit of $1.48 billion for the year ended September 30, 2023, marking a 33% increase compared to the same period in 2022. This increase in profit was achieved despite a $1.06 billion drop in revenue from contracts with customers.

Audited financial statements recorded a decline in crude oil sales by $702 million, bringing the total to $8.6 billion.The company also noted a 59% decrease in natural gas sales, which fell to $179.6 million. Sales of natural gas liquids dropped by 52%, totalling $11 million. Royalty income fell from $391 million to $305 million.

Gross profit, operating profit and profit before tax for the year ended September 30, 2023, were lower than those for the same period in 2022. However, tax expense decreased by 68%, from $2.15 billion to $695 million. The current tax expense for the year was $1.2 billion at a 55% rate. Heritage recorded a Trintomar debt forgiveness of $177 million, a decrease in the valuation allowance of $248 million, and transactions subject to different tax rates totalling $134 million.

Chairman Michael Quamina stated that the company “continues to deliver robust financial and operational results, following its strategic aim to stabilise, strengthen and optimise its entrusted national hydrocarbon assets.

The 2023 outcome reflects a consistent pattern of safe operations, solid financial health, and dependable resources, all contributing to a stable foundation for handling mature fields and assets. These achievements come alongside continuous investment in infrastructural upgrades, the resumption of offshore drilling, and attentive management of ongoing legacy challenges. “

“Heritage’s prudent fiscal practices have also ensured that it covers operational costs and capital investments, as well as fulfilling all financial commitments, including taxes and loan repayments.”

Heritage delivered a “strong financial performance” in the face of the fall in global crude prices. Despite the fall in revenue, Heritage was able to effectively mitigate this decrease by implementing cost savings and tax strategies.

“The Reserve Replacement Ratio (RRR) averaged 110% over the last four years (2020 to 2023) and was 65% for 2023, with a Reserves to Production Ratio (R/P) for 7.2 years.

We expect RRR and R/P to increase in the coming years based on planned activities onshore and offshore. Crude production for the year was 39,483 bopd compared to the prior year of 39,028 bopd. Crude production remained stable with a growth rate of 1% from 2022 to 2023. Both onshore and offshore drilling campaigns were successful with our best well since inception in East Soldado delivering an initial rate of over 900 bopd. To further grow production, we continue to optimise processes for better project execution, accelerate drilling programmes and improve field optimisation.”

Heritage continues to invest in its core programmes to manage decline and protect base production, deliver infill development drilling, and repair and renew aging infrastructure.

“This work offset the 7-9% decline in our offshore and onshore fields while modestly increasing production by 1% year over year. We continue to focus on investing in high-margin opportunities to sustainably grow production. To drive high-margin growth, we plan to execute 10 new drilling projects, 20 heavy workovers and progress secondary recovery projects onshore in fiscal year 2024.

These projects are expected to increase our output, improve recovery and extend the life of existing fields. Additionally, we are evaluating new licence opportunities and extending core licenses to include deeper potential.”

Heritage will continue to invest in integrity projects and installed remote monitoring well surveillance technology that improves the uptime of its top offshore wells and drives efficiency in its operations to lower lifting costs.

“With a robust track record of performance for the last five years, we are well-positioned to face any challenges ahead. Price volatility, coupled with supply chain inflationary pressures, will continue to apply pressure to net cash flows. Our plan generates robust margins through disciplined cost management, high-grading our portfolio, executing high-margin opportunities, and protecting the base by ensuring sustainability and integrity in our operations. By focusing on these key areas, we are poised to achieve long-term success and deliver value to our stakeholders, while adapting to the dynamic energy landscape.”

Arlene Chow stepped down as chief executive in June 2023, completing three-quarters of the financial year. She was replaced by Erik Keskula.

 

 

 

Feasibility study for low-carbon fuel distribution

The National Energy Corporation of TT (National Energy), the National Petroleum Marketing Company (NP) and Paria Fuel Trading Company (Paria) signed a memorandum of understanding (MoU) on September 18 to collaborate on positioning Trinidad and Tobago as the region’s first low-carbon-emission bunkering hub.

“The MoU commits the three agencies to conduct a feasibility study that will evaluate the potential to supply low-carbon marine fuels, such as methanol, to ships operating on trade routes in the Caribbean.”

The study is expected to conclude by April 2025, with the intention of establishing an operational hub by 2026. NP chairman Sahid Hosein said its facilities in the restored channel and turning basin, are equipped to meet growing demand from international ships seeking fuel alternatives.

“In 2023 we introduced TT’s first low-emission tug, marking a major step in reducing emissions from our maritime operations.”

Paria chairman Newman George said its infrastructure and market intelligence would enable it to run reliable and efficient terminals for petroleum products as well as cleaner fuels.

“This aligns with the global industry’s shift toward low-carbon solutions.”

On August 21, Methanex, in partnership with Uni Tankers, Green Marine, Bunker Holding, National Energy, Paria and the China-based transportation company NYK, demonstrated a methanol-bunkering operation in Port of Spain.

Energy Minister Stuart Young met Colin Bain, managing director and president of Methanex Trinidad Ltd at the methanol bunkering live demonstration. He plans to approach Cabinet to advocate for changes in the specifications for gasoline products in TT to include methanol. At the viewing ceremony, Young said proximity to the Panama Canal and resources to manufacture methanol position TT to be the low-carbon fuel-bunkering hub of the region.

“The methanol-bunkering operation we are showcasing today represents a significant step toward decarbonising the maritime industry. Methanol is a safe, proven, cost-competitive marine fuel for commercial shipping that can meet and exceed current and planned emission regulations.”

A study by the Methanol Institute – trade association for the global methanol industry – said methanol has many properties that make it a cleaner-burning fuel, which include oxygen for cleaner fuel combustion and the ability to reduce carbon intensity.

 

 

 

New frontiers

September 10, 2024

Minister of Energy Stuart Young talked to The Energy Year about how the Ministry of Energy and Energy Industries (MEEI) is revitalising the country’s upstream and furthering regional energy integration, as well as efforts to accelerate renewable energy developments and decarbonisation projects.

How is the MEEI supporting the revitalisation of Trinidad and Tobago’s upstream and furthering regional energy integration?

1. “One major, recent milestone was the securing of a 30-year exploration, production and exportation licence for the Dragon gasfield. This was made possible by an OFAC [US Office of Foreign Assets Control] licence which was amended in October 2023, allowing Trinidad and Tobago (T&T) to make payments in US currency. We in T&T now have a fully operational agreement with the Government of Venezuela.
2. Shell and the National Gas Company of Trinidad and Tobago Limited (NGC) are working to develop and bring Dragon gas to market. Pre-engineering work has started and soon the company chosen to conduct surveys will be announced.
3. With recent and upcoming elections in Venezuela, the US and the region, we’re focused on advancing these projects from concepts and conversations to concrete agreements. I’m pleased with our progress and expect significant announcements in the coming months.
4. We obtained another OFAC licence for the Coquina-Manakin field with BP, which is valid for two years. This field spans the Trinidadian-Venezuelan border and holds about 1 tcf [28.3 bcm] of gas. We finalised negotiations with the Venezuelan government, which granted the licence to NGC and BP for developing the field’s gas resources. This achievement is unprecedented, having never been seen in Trinidad and Tobago and Venezuela before for a cross-border hydrocarbons field.
5. Shell has announced its final investment decision (FID) on the Manatee field, which holds about 2.7 tcf [76.5 bcm] of gas. This represents the largest hydrocarbons development in Trinidad for the last couple of decades.
6. We’re also negotiating with Woodside on the Calypso deepwater project and pursuing other significant deals, including one in Venezuela with European companies.
7. Additionally, we’ve had successful bid rounds, including one for deepwater with Shell and BP bidding, the onshore and nearshore bid round with 13 blocks, and the shallow-water bid round with BP, Shell and EOG all bidding and landing significant E&P agreements.

“These developments show ongoing investment in Trinidad and Tobago’s energy industry, with both major and smaller players contributing to the growth.
All these developments signify a strong position for Trinidad and Tobago, with both major shareholders in Atlantic LNG – Shell and BP – securing cross-border gas deals.”

What benefits can be seen in the restructuring of Atlantic LNG’s ownership?

1. “In December 2023, we successfully completed the renegotiation and restructuring of Atlantic LNG with BP and Shell. This is the first time worldwide that an LNG complex has been restructured with a government and shareholders involved, which is a major accomplishment.
2. This restructuring opens new opportunities for further upstream development in Trinidad and Tobago and the wider region. We’ve signed MoUs with Grenada, Barbados, Suriname and Guyana. The restructuring also allows third-party access to Atlantic LNG facilities, enabling external gas to be processed there. This development encourages regional investment and provides a pathway for monetising gas resources through LNG.”

How has the MEEI managed to accelerate growth in renewables and promote sustainability across the country’s domestic energy value chain?

1. “On the renewables front, the Cabinet approved two green hydrogen projects and the government is leading a pilot project with NGC subsidiary National Energy, leveraging our existing infrastructure and expertise.
2. We’re also negotiating a commercial project with HDF Energy from France and local company NewGen to launch the country’s first hydrogen production facility. We are working towards the materialisation of these major projects. While green hydrogen is still emerging, we’re working to make it commercially viable.
3. Cabinet has approved a significant expansion in solar energy. Project Lara is already under construction in Brechin Castle, with 92 MW of solar power being built. Later this year, we’ll issue RFPs [requests for proposals] for major solar sites across Trinidad, including on previously illegally quarried land, which will be restored and used for solar installations.
4. The EU, cautious about new oil and gas projects, is interested in our decarbonisation initiatives. We’re working with Repsol and Eni on a project that focuses on reducing methane emissions, which has garnered EU support. Oil and gas remain crucial but we’re committed to improving our environmental impact. By the end of the year, we expect to release our CCUS policy.
5. We’re studying ways to enhance carbon capture and re-injection at our long-exploited wells. Concentration of plants allows us to collaborate on capturing and storing carbon efficiently and the European Commission has been supportive of these efforts. Despite our size, we’re making significant strides in these areas.”

What kind of business environment do you foresee in Trinidad and Tobago from 2026 onwards as new gas volumes come on line?

1. “The period from 2026-2030 will be crucial . If all the aforementioned projects come to fruition, and I’m sure they will, Trinidad and Tobago will have a reliable gas supply, filling our plant capacities and meeting demand.
2. We continue to be in discussions with Venezuelan authorities on the Loran field, which holds 7 tcf [198.3 bcm] of gas. President Maduro’s vision aligns with our vision for Loran gas to come to Trinidad.
3. With deepwater projects and others progressing, Trinidad and Tobago will restore its gas volumes and capacity, ensuring continued investment in LNG, ammonia, methanol, urea and UAN [urea ammonium nitrate].
4. Investors are seeing a positive outlook here, unlike elsewhere. Even our downstream partners – such as Nutrien, Methanex, Proman and other petrochemical companies – recognise the unprecedented progress and potential here. They’re committed to staying with us through years of lower gas production, knowing that production will ramp up from 2026.
5. Shell’s recent FID on Manatee, a multi-billion-dollar gas project, reflects their confidence in Trinidad’s future. Inclusion of Trinidad and Tobago in their growth plans highlights this. Despite declining production, higher prices have kept our economy stable. The pricing formula we negotiated has been effective and will continue to benefit us moving forward.”

What is your final message to investors considering Trinidad and Tobago today?

“Trinidad and Tobago offers significant advantages for any investor in both hydrocarbons and the emerging renewables sector. As the largest market outside Jamaica for renewables, we address key concerns such as project bankability and feasibility. Our sophisticated infrastructure, trained workforce, planned capacities and supportive government make us an ideal investment destination.”

 

 

 

 

Nutrien

Energy Minister Stuart Young held an introductory meeting with Edmond Thompson, vice president and managing director of Nutrien at the ministry on September 6.

Young commended recent successful turnarounds at the Canada-based petrochemical giant. Globally, Nutrien made significant progress in reducing carbon dioxide (CO2) emissions from its facilities. The company is committed to implementing CO2 sequestration and enhanced oil recovery initiatives in its operations.

Young said he looks forward to further meetings with the executive leadership from Canada on the exploration of Trinidad and Tobago’s potential to implement carbon reduction solutions within the local petrochemical sector with Nutrien’s technical support.

 

 

 

 

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

19 September 2024

ALL SHARE OFFER

for

Trinity Exploration & Production Plc (“Trinity”)

by

Touchstone Exploration Inc. (“Touchstone”)

Offer update – lapsing of Acquisition

CALGARY, ALBERTA – The board of directors of Touchstone (the “Touchstone Board”) notes Trinity’s announcement on 18 September 2024 (the “Announcement”) that the board of directors of Trinity (the “Trinity Board”) are seeking the permission of the Court to formally withdraw the Scheme (“Withdrawal”) at a Court hearing which has been scheduled for 25 September 2024 (the “Withdrawal Hearing”).

Notwithstanding withdrawal of the Scheme, the Touchstone Board confirms that it does not intend to exercise its right to implement the Acquisition by way of a Takeover Offer for the Trinity Shares as an alternative to the Scheme (as provided for under paragraph 10 of Part B of Part Three of the Touchstone Scheme Document).

Consequently, the Touchstone Board has requested the Takeover Panel’s consent for the Acquisition to lapse upon Withdrawal taking effect, which consent has been granted.

As stated in the Announcement, assuming the Court grants its permission for Withdrawal at the Withdrawal Hearing, Withdrawal will take effect immediately following the Withdrawal Hearing, at which time the Acquisition will also lapse with immediate effect.

Paul Baay, President and Chief Executive Officer of Touchstone, commented:

“We are disappointed with the outcome of this process, and the fact that UK takeover rules make it possible for our offer not to complete at such a late stage in the process despite having obtained both shareholder and regulatory approvals. We believe our offer represented compelling value for all stakeholders.

However, Touchstone remains committed to maintaining strict discipline in all corporate activities. We will only pursue investments that align with our strategic and financial goals, ensuring they deliver value to our shareholders.

As we continue to advance our operations to tie in the Cascadura-2ST1 and Cascadura-3ST1 wells towards their first production, along with our upcoming fourth-quarter drilling program, we look forward to updating our shareholders on our strategic and operational progress in the coming months. We will soon provide an updated presentation and host an investor forum to share our developments.”

Capitalised terms used but not defined in this announcement have the meanings given to them in the shareholder circular published by Trinity in connection with the Scheme on 24 May 2024 (the “Touchstone Scheme Document”).

Enquiries:

Touchstone Exploration Inc.

Paul Baay, President and Chief Executive Officer Tel: +1 (403) 750-4487

Scott Budau, Chief Financial Officer

Brian Hollingshead, Vice President Engineering and Business Development

Shore Capital (Lead Financial Adviser, Nominated Advisor and Joint Broker)

Daniel Bush / Toby Gibbs / Tom Knibbs Tel: +44 (0) 207 408 4090

Canaccord Genuity (Co-Financial Adviser and Joint Broker)

Adam James / Charlie Hammond Tel: +44 (0) 207 523 8000

Important Notices

Shore Capital & Corporate Limited and Shore Capital Stockbrokers Limited (either individually or collectively “Shore Capital”) which are authorised and regulated by the Financial Conduct Authority in the United Kingdom, are acting exclusively as lead financial adviser and joint corporate broker for Touchstone and for no-one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Touchstone for providing the protections afforded to clients of Shore Capital, or for providing advice in relation to the Acquisition or any other matter referred to herein.

Neither Shore Capital & Corporate Limited nor Shore Capital Stockbrokers Limited, nor any of their subsidiaries or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Shore Capital in connection with this announcement, any statement contained herein or otherwise.

Canaccord Genuity Limited (“Canaccord Genuity”), which is authorised and regulated in the UK by the FCA, is acting as co-financial adviser and joint corporate broker to Touchstone and no one else in connection with the matters set out in this announcement and will not be responsible to anyone other than Touchstone for providing the protections afforded to clients of Canaccord Genuity or for providing advice in relation to contents of this announcement or any other matters referred to in this announcement.

Neither Canaccord Genuity nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Canaccord Genuity in connection with this announcement, any statement contained herein or otherwise.

Publication on Website

In accordance with Rule 26.1 of the Code a copy of this announcement will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on the investor relations section of Touchstone’s website at https://www.touchstoneexploration.com/trinity-acquisition/ by no later than 12.00 noon (London time) on the business day immediately following this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

TOUCHSTONE EXPLORATION INC. | Website

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Touchstone Exploration Inc. | Suite 4100 350 7th Ave SW | Calgary, AB T2P 3N9 CA

 

 

 

Touchstone production down as Cascadura declines

September 5, 2024

TOUCHSTONE Exploration Inc reported a 23% decrease in average production between the first and second quarters of this year, with natural declines from the Cascadura field being the primary cause. Second quarter results for the period ended June 30, stated that Touchstone

“achieved average quarterly production of 5,432 boe/d (77% natural gas), a 23% decrease relative to 7,015 boe/d produced in the first quarter of 2024 (80% natural gas), mainly reflecting natural declines from our Cascadura field.”

Because of decline at the Cascadura field on the onshore Ortoire block, Touchstone adjusted its midpoint forecasted 2024 average production to 8,000 boe/d. This was a 15% drop from Touchstone’s previous midpoint of the average production forecast of 9,400 boe/d. Based on this downward change, Touchstone now expects funds from operations to decrease to US$28 million, down from the previously forecast US$32 million. President and chief executive officer Paul Baay stated,

‘Since we began production at Cascadura in September 2023, we have gained valuable insights into the reservoir that will benefit our future drilling initiatives. However, we have observed that field declines have been steeper than anticipated, leading us to adjust our midpoint forecasted 2024 average production to 8,000 boe/d. Consequently, we now project an approximate annual funds flow from operations of $28 million for 2024,”

Touchstone also revised its exit production rate downward from 14,500 boe/d to 13,500 boe/d. To help with production Touchstone decided to drill two additional wells.

“Following our drilling programme in the first half of the year, we remain on track to achieve initial production from the two Cascadura wells by the end of September. In line with our commitment to capital discipline and operational efficiency, we decided to leverage the current drilling rig location and the installation of the Cascadura field flowline to drill two additional development wells from our Cascadura B site in the fourth quarter of 2024. This strategic shift will replace the previously planned two Coho wells. We look forward to sharing further updates with our shareholders in due course.”

For the first half of this year its capital programme progressed as planned, with four wells in the programme successfully drilled and cased, including two Cascadura development wells and two legacy property crude oil wells. The company stated,

“Road and pipeline construction to tie in the two Cascadura development wells to our natural gas facility is progressing and we continue to expect initial production from the two wells prior to the end of September 2024. Our original capital guidance in the fourth quarter of 2024 contemplated drilling one Coho development well and one Coho exploration well. In order to focus on the development of our Cascadura field, we elected to postpone our Coho capital programme and drill two additional Cascadura development wells from the Cascadura B site. We expect to commence Cascadura drilling operations during the fourth quarter of 2024 after site preparations are complete and the drilling rig has been mobilised from our Cascadura C site.”

2024 capital budget has been revised from US$33 million to US$35 million to accommodate increased estimated Cascadura facility tie-in expenditures and the construction of the Cascadura B drilling pad .

“Similar to our original Coho well production guidance, associated production from the two additional Cascadura development wells is expected to commence in the first quarter of 2025 pending successful drilling, completion and tie-in operations. Remarkable transformation over 2023.”

Touchstone’s results for the first half of 2024, highlighted the organisation’s ‘remarkable transformation over the past year, with notable improvements in both financial and production performance compared to the previous year.

“The second quarter has been particularly productive, marked by our efforts to optimise production, enhance processing capacity, and tie in our new wells to the Cascadura natural gas facility. We were excited to increase average sales volumes to 5,816 boe/d in July 2024, following the successful recompletion of the Cascadura Deep-1 well, representing an 18% increase from June 2024.”

Touchstone Exploration Inc reported an average production volume of 6,223 boe/d (78% natural gas) for the six months ended June 30, 2024, marking a 214% increase from the 1,982 boe/d (39% natural gas) produced during the same period in 2023.

This significant increase was primarily attributed to the natural gas and associated liquids volumes from the Cascadura field, which were brought online in September 2023. Touchstone t achieved funds flow from operations of US$10,110,000, compared to US$809,000 reported in the prior year.  This growth was driven by an increase in operating netback to US$12,112,000, primarily due to higher production volumes and improved commodity pricing.

Touchstone stated that for the six months ended June 30, 2024, it recognised net earnings of US$6,967,000 ($0.03 per basic and diluted share), compared to a net loss of US$350,000 ($0.00 per basic share) in the same period of 2023.

However, Touchstone noted that despite these significant improvements compared to the previous year, it has started to experience a slowdown in progress. For the second quarter 2024, it realised petroleum and natural gas sales of US$14,090,000 compared to US$16,584,000 in the first quarter of the year. This was primarily attributed to a decrease in natural gas and NGL sales volumes. The realised petroleum and natural gas sales of US$14 million comprised:

Cascadura field production volumes in the quarter contributed US$5,168,000 of natural gas sales at an average realised price of US$2.52 per Mcf and US$680,000 of petroleum sales at an average realised price of US$73.86 per barrel.

Natural gas production from the Coho-1 well contributed US$483,000 of natural gas sales in the quarter at an average realised price of US$2.16 per Mcf.

Crude oil production contributed US$7,759,000 of petroleum sales at an average realized price of US$73.62 per barrel.

Effective July 1, 2024, Touchstone entered into exploration and production licences for the Charuma and Cipero onshore blocks awarded pursuant to the 2022 onshore competitive bid round, where we have an 80% operating interest in each licence.

Following a recompletion of the Cascadura Deep-1, in July 2024 it attained average net sales volumes of 5,816 boe/d representing an increase of 18% from June 2024 average net sales, comprised of: – average natural gas sales volumes of 27.5 MMcf/d (4,578 boe/d); and – average crude oil and natural gas liquid sales volumes of 1,238 bbls/d.

Cascadura facility infrastructure and tie-in operations are progressing as scheduled, and it continue to target initial production from our Cascadura-2ST1 and Cascadura-3ST1 wells prior to the end of this month.

OTHER SECOND QUARTER HIGHLIGHTS:

• Generated an operating netback of US$8,127,000, a 22% decrease from the first quarter of 2024, primarily due to decreased natural gas and NGL sales volumes.
• Achieved quarterly funds flow from operations of US$3,968,000 in the second quarter of 2024 compared to US$6,142,000 in the preceding quarter. •
• Delivered net earnings of US$3,339,000 ($0.01 per basic and diluted share) versus US$3,628,000 ($0.02 per basic and diluted share) recognised in the first quarter of 2024.
• US$5,543,000 in quarterly capital investments primarily focused on expenditures directed towards one CO-1 well and progressing construction on the flowline from the Cascadura C site to the Cascadura natural gas processing facility.
• In April 2024 we entered into a third amended and restated loan agreement with our existing lender providing for an additional US$13 million of bank debt capacity.
• Effective June 1, 2024 we closed an asset swap where we exchanged private San Francique leases for the Balata East block, which resulted in a US$1,535,000 gain on asset disposition.
• Exited the second quarter of 2024 with a cash balance of us$6,990,000 and a net debt position of us$28,674,000, resulting in a net debt to annual funds flow from operations ratio of 1.25 times.

 

 

 

 

TOUCHSTONE EXPLORATION ANNOUNCES CASCADURA WELL TEST RESULTS AND PROVIDES AN OPERATIONAL UPDATE

CALGARY, ALBERTA (September 30, 2024)

Highlights

• Successful completion of our Cascadura C wells: the Cascadura-2ST1 and Cascadura-3ST1 wells were completed with initial shut-in wellhead pressures building to 3,600 psi and 2,665 psi, respectively.
• Gas presence indicated at Cascadura-2ST1: the fluid column gradient observed in the tubing at Cascadura-2ST1 suggests a significant presence of natural gas, comparable to findings in the Cascadura-1ST1 well, reinforcing our geological models.
• Crude Oil and Natural Gas at Cascadura-3ST1: Cascadura-3ST1 successfully flowed crude oil from the lower sheet 5 Herrera interval on September 17, 2024, followed by a test from the sheet 4 Herrera interval on September 26, 2024 confirming natural gas.
• Flowline installation: we have successfully installed the flowline connecting the Cascadura C surface location to our natural gas facility, and hydrotesting of the line will commence shortly.
• Cascadura infrastructure enhancements: the test separator at the Cascadura natural gas facility has been installed, and the riser at the Cascadura B site has been completed, optimizing our operational capabilities.
• Significant production increase at Balata East: since acquiring the field in June 2024, production has surged by nearly 300 percent from a targeted workover and optimization program.

Paul R. Baay, President and Chief Executive Officer, commented:

“The results from the Cascadura-2ST1 well test is highly promising, closely mirroring the responses we observed at the Cascadura-1ST1 well. We are eager to connect it to the completed pipeline and begin testing at our facility as soon as possible.

The discovery of crude oil during the initial test of the Cascadura-3ST1 well further underscores the potential within the Ortoire acreage. The encouraging results from this initial well test opens up new liquids possibilities on the block. The results of the second well test are particularly significant, confirming the presence of economic hydrocarbons on the east side of Fault C, areas that have not been previously booked as reserves. Initial findings suggest that the Cascadura structure hosts multiple hydrocarbon accumulations beyond previously defined boundaries.

Although the oil test at Cascadura has delayed the final tie-in of the wells on pad C, the insights gathered will be invaluable for our future drilling efforts in the area.

We are proactively establishing essential infrastructure at Cascadura to accelerate the development of upcoming wells, significantly reducing the time from drilling to production. A prime example of this efficiency is our ability to move the rig to the Cascadura B pad using our own road network, along with the risers already in place to facilitate successful development on the pad. We look forward to keeping our stakeholders informed as our operations progress.”

Cascadura-2ST1

On September 8, 2024, the Cascadura-2ST1 well was successfully perforated across 115 feet of sheet 4 in the Herrera Formation, at depths between 6,142 to 6,294 feet. Following the perforation, wellhead pressure rapidly increased to 1,900 psi, and within the next 18 hours, it continued to build, reaching 3,600 psi. This increase in wellhead and bottom hole pressure indicates a substantial gaseous column within the tubing. Currently, the Cascadura-2ST1 well is shut in, awaiting connection to the newly constructed flowline.

Cascadura-3ST1

On September 15, 2024, the Cascadura-3ST1 well successfully perforated 40 feet of sheet 5 in the Herrera Formation, at depths between 7,248 and 7,294 feet. Sheet 5 was identified as a secondary exploration target. Following perforation, the wellhead pressure immediately climbed to 2,100 psi, and flowback testing commenced on September 17, 2024. The interval was flow tested using 3.5-inch tubing and a 10/64-inch choke. In the first hour we recovered 54 barrels of completion fluid, and the well continued to flow for 40 hours at restricted rates of approximately 300 to 400 bbls/d of 25-degree API crude oil, without any formation water, yielding a total of 538 barrels of oil during this period.

On the third day of testing, we observed a sudden shift in flowing pressures, leading to the well producing both oil and significant quantities of formation water, mud, and sand. This initial test marked a critical milestone as it was the first conducted in the lowest Herrera sand sheet encountered in the field to date, extending across the interpreted outermost structure fault, known as Fault C. While the initial flow test results were promising, indicating stable rates of clean oil, it appears that a lower water-bearing sand was breached into the wellbore, necessitating the plugging of this lower test. This testing phase represented our inaugural drilling results on the east side of Fault C, revealing the lowest structural location as the formation trends upward to the northeast.

On September 26, 2024, the service rig successfully completed the uphole section of the sheet 4 Herrera interval, the primary target of the wellbore. This interval was perforated across 36 feet at depths from 6,794 to 6,889 feet. Following perforation, the wellhead pressure rapidly reached 2,100 psi and subsequently built to 2,620 psi. The well was then opened on the same day using a 12/64-inch choke, resulting in a flow of dry natural gas for one hour at a flowing pressure of 2,400 psi, before being shut in for safety reasons. Due to the absence of natural gas testing equipment on site, we were unable to estimate the volume of natural gas produced. The current shut-in wellhead pressure is 2,665 psi. Future testing will be conducted as we integrate the well into the gas gathering system at the Cascadura natural gas facility. The results of the second well test confirmed the presence of hydrocarbons on the east side of Fault C, highlighting additional opportunities for future development in the area.

Cascadura Infrastructure

We are making substantial progress in connecting the Cascadura C surface location to our Cascadura natural gas facility. The flowline has been successfully installed along the designated right-of-way, and hydrotesting of the line is set to commence shortly. An additional natural gas separator has been installed at the facility, and the wellhead tie-in piping and valves have been fully welded. With well testing now complete, the final surface piping is ready to be transported to the site for installation. Additionally, the bridge over the Poole River is approximately 80 percent complete, with expected completion by the end of October.

While the bridge is not necessary for the initial gas production, its completion will facilitate direct vehicle access across the Cascadura field, enhancing trucking and logistical operations in the area. This development will greatly improve our operational efficiency and support future growth.

To ensure the safety and integrity of our operations as we move forward, following the oil test at the Cascadura-3ST1 well, the final tie-in for the Cascadura-2ST1 and Cascadura-3ST1 wells will take place once the service rig has vacated the Cascadura C pad. We anticipate that first natural gas production from the Cascadura C pad will commence prior to the end of October 2024.

Balata East

Our operations team has been actively engaged at the Balata East field, located north of our Ortoire block, since we assumed control on June 1, 2024. After obtaining the necessary regulatory approvals for service rig operations, we initiated an optimization, workover, and recompletion program at the end of August. Following our initial workover efforts, we have successfully increased field production from 33 bbls/d in July to an estimated current rate of 125 bbls/d. We remain committed to identifying additional wells for optimization to further enhance production and maximize the field’s potential.

Production Volumes

In August 2024, we attained average net sales volumes of 5,125 boe/d comprised of:

• average net natural gas sales volumes of 23.3 MMcf/d (3,887 boe/d); and
• average net crude oil and natural gas liquid sales volumes of 1,238 bbls/d.

Touchstone Exploration Inc.

Touchstone Exploration Inc. is a Calgary, Alberta based company engaged in the business of acquiring interests in petroleum and natural gas rights and the exploration, development, production and sale of petroleum and natural gas. Touchstone is currently active in onshore properties located in the Republic of Trinidad and Tobago. The Company’s common shares are traded on the Toronto Stock Exchange and the AIM market of the London Stock Exchange under the symbol “TXP”.

For further information about Touchstone, please visit our website at www.touchstoneexploration.com or contact:

Mr. Paul Baay, President and Chief Executive Officer

Mr. Brian Hollingshead, Executive Vice President Engineering and Business Development

Telephone: 403.750.4405

Advisories

Working Interest and Currency

Touchstone has an 80 percent operating working interest in the Cascadura field, which is located on the Ortoire block onshore in the Republic of Trinidad and Tobago. Heritage Petroleum Company Limited (“Heritage”) holds the remaining 20 percent working interest. All Cascadura-3ST1 production test figures referenced herein are gross volumes. Touchstone has a 100 percent working interest in the Balata East block via an Enhanced Production Service Agreement with Heritage.

 

 

 

 

Woodside Energy

2024, 09/04

Acting Prime Minister and Energy Minister Stuart Young met Kellyanne Lochan, country manager of Woodside Energy to discuss the company’s ongoing projects. Lochan took the opportunity to update the Minister on the recent asset upgrade at Greater Angostura as Woodside Energy continues to pursue opportunities to maximise value and safely optimise production and operating costs .

On the Calypso deepwater project, Lochan said the marketing and commercial discussions remain ongoing, under the company’s exploration and development portfolio.
Minister Young congratulated Woodside Energy on its latest LNG tanker, the ‘Woodside Scarlet Ibis,‘ which demonstrates the positive stakeholder relationship between the Government and the company.

He noted the company’s Pacific Basin position and recent agreement for the acquisition of Tellurian and Driftwood LNG. The Government is open to collaborating on opportunities that can emerge from T&T’s strategic location in proximity to Atlantic and Pacific routes for LNG.

Both parties agreed to continue a collaborative relationship in the interest of navigating the global economic outlook.

 

 

 

 

Young gets Calypso, Angostura updates

2024, 09/27

Minister of Energy Stuart Young, and permanent secretary, Penelope Bradshaw-Niles received an update on Woodside Energy Calypso and Angostura projects.

Woodside Energy executives met the Minister at the Ministry of Energy, Port-of-Spain. Kellyanne Lochan, country manager Trinidad and Tobago, Woodside Energy visited alongside Onne Peters, vice president, marketing, Woodside Energy, Stacy Patrick, Calypso project director, Woodside Energy and Dr. Carla Noel-Mendez, manager corporate affairs of Woodside Energy. In providing the update on the Calypso Project to Young, Lochan stated that ‘pre-feed’ engineering work is progressing.

Calypso is located approximately 220 kilometres off the coast of Trinidad in 2,100-metre water depth. The resource comprises several gas discoveries in Block 23(a) and Block TTDAA 14. The development is located in a region with existing infrastructure and a favourable demand outlook. In the first half of 2023, Woodside completed conceptual studies and selected an infield host as the preferred development concept.

Pre-FEED engineering commenced in the second half of 2023 to mature the definition of the concept. “Marketing and commercial discussions continue with key stakeholders to evaluate options to monetise the resource. Woodside is operator and holds a 70 per cent participating interest,” Woodside’s assessment of the Calypso block stated.

Calypso’s non-operating partner is bpTT and the block is estimated to contain 3.5 trillion cubic feet (tcf) of recoverable reserves.

“The Calypso appraisal drilling programme (consisting of the Bongos-3, Bongos-3X and Bongos-4 wells) concluded on 20 December 2021. All wells encountered hydrocarbons.”

On Wednesday, Energy Chamber CEO Dr Thackwray ‘Dax’ Driver listed Calypso as one of the projects in Trinidad waters which could boost natural production.

The Ministry of Energy stated, “In the interest of energy security and navigating the energy transition, Woodside Energy continues to engage with the National Gas Company on innovative ways to increase natural gas production. Both parties agreed to progress works on the Calypso project and collaborate on identifying opportunities for future engagement.”

Minister Young also received an update on the improved operations at Woodside Energy’s Angostura facility after its successful turnaround.   The Greater Angostura field is an offshore conventional oil and gas field located 38km northeast of Trinidad which was discovered in 1999.

First oil from Angostura was achieved in January 2005 (Phase 1) while Phase 2 established gas sales in 2011. First gas for Angostura Phase 3 was established in September 2016. Ruby is a conventional offshore oil and gas field located within the Greater Angostura Fields. First oil was achieved in May 2021.

The current development comprises a main central processing platform (CPP), gas export platform (GEP), four wellhead protector platforms (WPP) and onshore terminal. Flowlines connect the Ruby wellhead platform back to the CPP and GEP for processing. Crude oil from CPP is transported to the Terminal Facility located in the south eastern end of Trinidad.

 

 

 

Young on seismic vessel

September 27

No minister found a drop of oil or molecule of gas but Minister Stuart Young was near the source, touring a seismic survey vessel, PXGEO 2, used in offshore exploration to locate subsurface petroleum deposits and assess potential resources accurately.

He was joined by Adam Lowmass, senior vice-president and country chair of Shell TT for the tour on September 26.

The visit followed government approval to negotiate a production-sharing contract (PSC) with Shell for Block Modified U (c), in shallow water off the southeast coast of Trinidad, awarded during the 2023 Shallow Water Competitive Bidding Round.

The PXGEO 2 is docked at Pointe Gourde, Chaguaramas and is engaged in several seismic surveys in TT. The projects include surveys of deep-water blocks awarded during the 2021 Deepwater competitive bidding round and surveys at the Manakin-Cocuina field, shared with Venezuela.

The Manakin-Cocuina project follows a cross-border unitisation agreement finalised in July 2024.

The vessel is preparing for the upcoming seismic survey of Block Modified U (c), pending finalisation of the PSC with Shell. The PXGEO 2 is equipped with advanced technology such as Sercel Sentinel solid streamers and Sercel G-Source II energy arrays, which collect detailed data on subsurface formations. The vessel operates with strict environmental protections in place.

Marine mammal observers and passive acoustic monitoring operators were on board to monitor marine mammals and turtles. The observers ensure specific protocols are followed to minimise any potential impact on wildlife.

Young acknowledged the Environmental Management Authority for quickly approving three seismic programmes and the importance of collaboration between government agencies and stakeholders in advancing national energy interests. The seismic programmes are part of broader efforts to explore and develop offshore hydrocarbon resources.

 

 

 

Predator Oil & Gas announces unaudited interim results

25 Sep 2024

Predator Oil & Gas, the Jersey-based Oil and Gas Company with near-term hydrocarbon operations focussed on Morocco and Trinidad, announced its unaudited interim results for the six-month period ended 30 June 2024.

Financial highlights:

• • Fully funded to satisfy all commitments for the next twelve months
  • Preparing the organisational structure necessary to accelerate the transition to production and a possible future partial divestment and monetisation of discovered gas onshore Morocco
  • Total comprehensive Loss for the 6 months period is £978,238 (£2,361,721 for the 6 months period ended 30 June 2023)
  • Cash balance, at period end of £4,352,190 (2023 year end: £6,484,034)
  • A further £1,186,155 (US$1,500,000) held as restricted cash
  • £304,476 (before expenses) raised through the exercise of 5,221,203 broker warrants, 2,890,908 of the warrants exercisable at 5.5 pence per share; 1,780,412 of the warrants exercisable at 5.7 pence per share; 549,883 of the warrants exercisable at 8.0 pence per share
  • No material shareholder dilution
  • No debt
  • Application dated 5 June 2024 to enter the First Exploration Period of the Guercif Petroleum Agreement submitted which on ratification will reduce the Company’s firm regulatory financial commitments and work programmes
  • Issued share capital 570,382,865 (31 December 2023: 565,161,662)

Operational highlights:

• • Onshore Morocco initial conventional rigless testing programme successfully executed and preparations for next stage to evaluate Sandjet perforating technology performance progressing.
  • MOU-3 shallow higher pressure gas remapped with gross P50 and P10 gas-in-place of 37.75 and 53.81 BCF respectively – potentially a separate standalone CNG development project.
  • Preparations to drill the MOU-5 well to test the large 187km2 Titanosaurus Jurassic structure have been progressed and refined based on new desktop seismic modelling of potential reservoirs which has increased gross gas-in-place estimates to 8.036 and 14.729 TCF – establishing a potential gas-to-power development option adjacent to the Maghreb Gas Pipeline.
  • Onshore Trinidad low-cost administrative office established and in-country operating capability being progressed.
  • Additional well intervention opportunities identified and being advanced in the context of economies of scale and enhancing near-term potential production growth through the application of wax treatments
  • Independent Technical Report for Cory Moruga gives gross, following the acquisition of an additional 16.2% equity interest, Contingent and Prospective P50 and P10 resources of 14.31 and 21.41 million barrels respectively
  • Offshore Ireland the application for a successor authorisation for the Corrib South Licensing Option 16/26 progressed to the final stages of satisfying GSRO conditions for its potential award and a farmin.
  • Proposal has been received from a well-funded industry entity with downstream production

Post reporting date:

• • On the 7 August 2024 the Company announced a rigless testing update and customs clearances on the 12 June and 2 August 2024 for the import of the Sandjet testing tools and the Baker Hughes logging and coiled tubing units respectively.
  • On the 8 August 2024 the Company gave an update on preparations for the drilling of the high impact well MOU-5.
  • Based on an updated Independent Technical Report, taking into account seismic modelling of the target Jurassic reservoir interval, gave gross P50 and P90 in-place gas of 8.036 and 14.729 TCF respectively.
  • Based on the evidence of the presence of helium in the MOU-3 analysed gas sample from the Moulouya Fan, the helium potential of the MOU-5 structure and surrounding area was identified for the first time for further evaluation and follow up through the drilling of MOU-5.
  • The granting of entry into the First Extension Period of the Guercif Petroleum Agreement was confirmed. Source: Predator Oil & Gas

 

 

Listed clean energy company reorganises

2024, 09/27

Chairman of the board of MPC Caribbean Clean Energy Ltd, Fernando Zúñiga, announced the successful completion of its strategic reorganisation, which was approved by its shareholders in May 2023. MPC Caribbean Clean Energy Ltd (MPCCEL) is listed on the T&T and Jamaica stock exchanges,

Describing the move as “a significant milestone,” MPC Caribbean said the primary objective of the move is to simplify the organisation’s framework and mitigate administrative costs. In addition, the company said the reorganisation reinforces its corporate governance by appointing an additional independent director, thereby fostering a more robust governance structure. The leaner, more efficient structure is anticipated to yield a reduction in annual operating expenses of up to 25 per cent.

Fernando Zúñiga emphasised the critical importance of this restructuring for the company’s outlook, stating, “This strategic reorganisation marks a pivotal moment for MPC Caribbean Clean Energy, underscoring our commitment to optimizing our operations and enhancing shareholder value. By simplifying our organisational architecture, we are better positioned to navigate the evolving landscape of the Caribbean’s renewable energy market.”

As part of the restructuring, all assets previously held by the MPC Caribbean Clean Energy Fund LLC (MPCCEF or the Fund) have been transferred to MPCCEL, consolidating full ownership of the Fund’s interests in renewable energy projects and operating assets across the Caribbean and Central America.

MPCCEL said the realignment represents a change in legal structure while maintaining continuity in beneficial ownership, thereby eliminating one intermediate layer within the corporate hierarchy.

Since its inception in 2019, MPC Caribbean Clean Energy has been at the forefront of clean energy investment, pioneering as the first publicly listed company in Jamaica and Trinidad and Tobago dedicated solely to clean energy investments across the Caribbean Basin and select Central American nations. The recent completion of the Fund’s capital raising and investment phase in 2023 further underscores the company’s commitment to advancing sustainable energy solutions in the region.

The 14.31 per cent block of shares in the MPC Caribbean Clean Energy Fund LLC formerly held by MPC Capital AG was transferred to MPCCEL in exchange for additional Class B shares issued by the listed company. This swap increased MPC Capital AG’s indirect stake in MPCCEL from currently 3.19 per cent to approximately 22.2 per cent, ultimately becoming one of its Top 3 shareholders. The existing Class B shareholders were not diluted from the issuance of the additional Class B Shares to a nominee of MPC Capital AG.

MPCCEL operates a solar farm in Jamaica, an on-shore wind farm in Costa Rica and a solar farm in Costa Rica. It acquired a majority stake in Monte Plata solar park in the Dominican Republic in 2021

 

 

Strategic Atlantic

2024, 09/28

Prime Minister Dr Keith Rowley met outgoing CEO, Ronald Adams, before touring Atlantic during the 25th anniversary and restructuring event at the administrative building in Clifton Hill, Point Fortin.

Minister of Energy Stuart Young said that many citizens do not fully appreciate the extent to which the Point Fortin-based LNG company, Atlantic, contributes to T&T’s Gross Domestic Product.Young reflected on the challenges of optimising the company’s future amid depleting natural gas reserves.

He recalled that, in 2015, when the new government took power, it immediately began working on how to secure the future of gas production, as Atlantic Train 1 licence was set to expire in 2018. Intense discussions with key shareholders, bpTT and Shell, over price restructuring, sought better value.

“And there began the task of how do we establish and secure an energy future for Trinidad & Tobago, where Atlantic LNG is arguably one of the single most important pillars for the future of the energy sector. It was in 2018, when I accompanied the Prime Minister to London for talks with Shell and BP, that the concept for the future of Atlantic LNG was formalised and the decision was made by the heads: we needed to restructure it.”

The restructuring process took five years to complete, underscoring its significance for the country’s future. This level of restructuring had never been achieved anywhere else in the world. The restructuring extended the life of the energy sector and the economy under challenging circumstances.

“I am happy, certainly during this tenure of mine, that not only did we accomplish the restructuring, but we have now managed to increase our shareholding through NGC for the citizens of Trinidad & Tobago.”

Prime Minister Dr Keith Rowley said that the restructuring went beyond shareholding adjustments, as a platform for future investments to ensure a continuous stream of gas, which would secure the future of the business. T&T’s future in the gas and LNG industries, as well as providing raw materials for Point Lisas, is secure as long as the country can maintain a stable gas supply.

“I want to thank all of you who have played any role whatsoever in the creation of this industry because we started this from scratch in the face of significant resistance and doubt. Today, it is the backbone of the economy and the revenue stream for Trinidad and Tobago. I call that success.”

Reflecting on the gas industry, Rowley described the country as a significant consumer, once using up to 4.2 billion cubic feet (BCF) of gas per day.

He acknowledged the strain on the non-renewable geological reserves, especially as new drilling yielded disappointing results. With no major oil and gas discoveries in recent years, consumption had been accelerating, reaching 4.2 BCF daily. When the government took office, gas production had fallen to about 3.1 BCF. Today, production is down to 2.6 BCF, a reality the country must confront but he had confidence in T&T’s position as a global player in the energy market.

 

 

 

 

Difficult times to persist until new gas production in 2027

2024, 09/28

With low levels of gas production and a less than favourable market, Prime Minister Dr Keith Rowley says times will be difficult until new gas production in 2027.

Discussing the future of T&T’s gas industry at Atlantic’s 25th anniversary and restructuring celebrations at Clifton Hill, Point Fortin, Rowley said seismic work is progressing on proven fields, such as Cocuina and Manakin,boosting confidence that there is a strong flow of gas coming from the border and across the border in the medium term. Therefore, T&T has to be responsible and hold the fort.

“The period between now and the 2027 second quarter would be one of difficulty for the people of Trinidad and Tobago because the current levels at which we are producing, and the market situation, would cause us to be responsible and hold the fort with a very good view and confidence that come 2027, we would be in a better position with this industry.”

Previously, the opening to sell gas to Atlantic was only for those who had equity in the plant. However, restructuring allows third parties to invest more confidently, as now, any investor who finds gas in hydrocarbon research and exploration onshore, offshore or across the border, will know there is a market in Point Lisas and Point Fortin, with the pull factor, which is that T&T wants the gas. It created an environment that eliminates the risk of stranded fields

 

 

 

Trinity Exploration interim results for period to 30 June 2024

27 September 2024

AIM-listed, independent E&P company Trinity Exploration & Production, focused on Trinidad and Tobago, announced unaudited interim results for the 6-month period ended 30 June 2024.

Update on takeover offers

On 1 May 2024, Trinity and Touchstone Exploration announced that they had reached agreement on the terms of a recommended all share offer, pursuant to which Touchstone would acquire each Trinity share for 1.5 new Touchstone Shares, to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.

On 2 August 2024, Trinity and Lease Operators Limited announced that they had reached agreement on the terms of a recommended all cash acquisition, pursuant to which Lease Operators would acquire each Trinity share for 68.05 pence in cash, also to be effected by means of a scheme of arrangement. At the same time, the Trinity board of directors withdrew its recommendation of the Touchstone Offer as it considered the Acquisition to be superior and in the best interests of Trinity Shareholders.

On 25 September 2024, the Court granted Trinity permission to formally withdraw the scheme of arrangement relating to the Touchstone Offer and, as a result, the Touchstone Offer lapsed with immediate effect.

The Acquisition remains subject to certain other conditions, including the approval of Trinity Shareholders at a Court Meeting and a General Meeting and the Court’s sanction of the Scheme at a Court Hearing. A further update, including the timetable for the Acquisition will be made in due course.

H1 2024 Operational Highlights

• • A production decline of nine percent (9%) against H1 2023 is within the expected natural decline range for mature fields in the absence of development drilling activities.
  • Production was supported with a programme of recompletions and workovers.
  • H1 2024 average net sales volume was 2,595 bopd (H1 2023: 2,861 bopd). Sales volumes were supported by five recompletions (H1 2023: three) and 51 workovers and reactivations (H1 2023: 62) undertaken during the Period.
  • Swabbing production continued across the Onshore and West Coast assets and contributed approximately ten percent (10%) of Trinity’s production. A program of six heavy workovers is scheduled for the second half of 2024.
  • Decrease in output between H1 2024 vs H1 2023 was largely a result of the failure to return a large producing Trintes well to potential production in July 2023 due to operational issues.
  • A workover was conducted in February 2024 to investigate and optimise production but ultimately it was unsuccessful. A further workover is being planned for H2 2024.
  • The production decline from Onshore Assets was attributed to three major wells being shut-in during H1 2024 due to mechanical/wellbore problems.
  • Workovers to restore production proved unsuccessful to date. Further workovers are planned for H2 2024.
  • Jacobin exploration well drilled in 2023 was recompleted in the Lower Forest horizon in May 2024 following disappointing production results in the deeper Cruse horizons. The well was placed on pump and is currently producing around 11 bopd.
  • ABM-151 well in Brighton Marine block, offshore West Coast of Trinidad, which was returned to production on 21 March 2023 following an extensive refurbishment of surface facilities and the installation of remote surveillance technology, has maintained production with no significant decline between H2 2023 (106 bopd) and H1 2024 (109 bopd). Trinity is monitoring this well closely as it has a high risk of sand production.

 

H1 2024 Financial Highlights

• • Average oil price realisation of USD 71.5/bbl for H1 2024 (H1 2023: USD 65.2/bbl).
  • During the Period, the realised price received for Onshore and West Coast oil sales was at an average discount of 13.9% to Brent; less than the long-term average discount of approximately 15%. East Coast oil sales are made under a fixed arrangement of 15% discount to Brent.
  • The Company remains unhedged.
  • Cash balance of USD 8.0 million as at 30 June 2024 (YE 2023: USD 9.8 million) reflecting a combination of stable operating cash generation net of finalisation of 2023 undisputed Jacobin costs paid in 2024, limited investment in capex and cash outflows of USD 1.7m to support the ongoing acquisition.
  • Stable net cashflows generated from operating activities as at H1 2024 USD 4.8 million (H1 2023: USD 6.3 million).
  • Revenues of USD 33.8 million were generated in the Period (H1 2023: USD 33.8 million) driven by lower sales production offset by higher oil prices.
  • Cash operating costs of USD 23.2/bbl (H1 2023: USD 20.1/bbl) mainly driven by the overall impact of lower sales production (2,595 in H1 2024 vs 2,861 in H1 2023).
  • General and administrative costs of USD 6.8/bbl (H1 2023: USD 6.3/bbl) mainly due to the impact of lower sales production.
  • Average operating break-even for H1 2024 was increased at USD 42.6/bbl (unaudited) (H1 2023: USD 34.5/bbl) resulting from a slightly higher operating cost and lower sales volume.
  • The Group had drawn borrowings (overdraft) of USD 3.0 million at 30 June 2024 (YE 2023: USD 4.0 million).

2024 Guidance

• • The sales guidance range for 2024 has been reduced to 2,450-2,550 bopd.

Source: Trinity Exploration & Production

 

 

 

 

New energy streams

28 September

At the ceremony marking the 25th anniversary of the founding of Atlantic LNG and celebrating the restructuring agreement, the Prime Minister and Energy Minister said Government continues to aggressively pursue initiatives inside and outside TT borders to ensure the long term health of the energy sector and the economy.

Dr Rowley recalled decisions by the former Manning administration in 1991-1995, to enter the LNG (liquefied natural gas) business to earn new revenues. It was interesting over time that some people advising TT to exit the LNG business, for climate change reasons, are expanding their presence in LNG. One nation, a former consumer of TT LNG is now an exporter of LNG and a crude oil producer.

“Our responsibility, first and foremost is to the people of TT.”

TT is co-operative and responsible. It was fortunate to be geographically near Venezuela, holding large natural gas deposits with challenges bringing them to market. With its existing energy infrastructure, TT is in a position to process and market Venezuelan natural gas.

It was to Government’s credit since 2015, that it persuaded Venezuela to allow TT to have an interest in Dragon gas field in Venezuela’s territorial waters, de-link Manatee gas field on its side of the maritime border with Venezuela from the Loran field in Venezuela and have interests in the Cocuina-Manakin field straddling the TT-Venezuela maritime border. Manatee gas could maintain existing levels of natural gas.

“If we don’t add new gas, we are not only talking about declining. But even holding your production, where we are now. We need a strong stream of gas coming in to maintain the levels we are in.”

The possibility also exists of TT accessing gas from the Loran field. With respect to pursuit of energy agreements with Venezuela, people should avoid distraction by geopolitical events related to recent presidential elections and speculations about possible consequences there.

“TT, Venezuela and the US all have an interest in the success of peace and security and good commercial arrangements between neighbouring countries, Venezuela and TT.”

One of the benefits of the restructured ALNG was ability to accept and process natural gas from third parties.  Under the former arrangement, the company could only process gas from its shareholders.   ALNG will now be able to process gas from non- shareholders, earn revenue and eliminate the phenomenon of stranded gas.

In June Finance Minister Colm Imbert said that 2024-2027 could be economically challenging because revenue for this year could fall $3 billion short of the $54 billion projected in the 2023/2024 budget. Rowley shared the optimism of Imbert, confident the revenue position would improve by 2026 or 2027.

Young said a restructured ALNG set a platform for further initiatives to develop the energy sector.

“We extended the life of the energy sector and the economy of TT in very difficult circumstances.”

Positive developments taking place are tied to ALNG restructuring. On September 26, he toured the seismic survey vessel, PXGEO, which analyzed deepwater marine blocks. His visit followed approval to negotiate a production-sharing contract (PSC) with Shell for Block Modified U (c), in shallow waters off the southeastern coast of Trinidad, awarded during the 2023 Shallow Water Competitive Bidding Round.

“That is as a result of the restructuring of ALNG. In our waters, to ensure future gas supply.”

The vessel also conducted a seismic survey of Cocuina-Manakin, for which a 25-year exploration and production licence was negotiated with Venezuela in July.

“The vessel will soon conduct seismic surveys in local shallow waters in a block the Cabinet on September 26 approved and confirmed the award of a PSC (production sharing contract) licence.”

This licence was negotiated and ready for signature in the space of one month. “These are all securing the future for generations.”

 

 

 

 

Focus on T&T gas fields

2024, 09/26

While recent news of the energy sector have focussed on possible returns from Venezuelan near-border or cross-border natural gas fields, Energy Chamber CEO Dr Thackwray ‘Dax’ Driver says the immediate focus should be on production from fields in domestic waters.

“There’s a lot going on in territorial waters, to increase gas production from within Trinidad and Tobago, the focus of our recommendations to the Government for this national budget. About investment into upstream production , major projects are in the offing, being developed. Manatee field is the big one, which Shell has taken an investment decision to increase natural gas production in two years time.”

Pushing production was crucial, as it typically takes years for returns from local fields.

“It doesn’t happen straight away.. from these multi-billion dollar US dollar investments. They take a while to implement. So things should lead to increased natural gas production in the next couple of years.”

One very large potential project within deepwater, the Calypso project, is being worked through between the Government and investors. He hoped for an investment decision soon for the Calypso field.

While there could be some geopolitical impact as a result of upcoming US elections, he did not expect fallout from Venezuelan presidential elections to affect this country’s natural gas deals with the OPEC founder.

“I don’t want to really speculate how a change in administration in the US would impact that. It’s very difficult to know. Many factors will go into making decisions around that. From the point of view of Venezuela, export of natural gas to Trinidad makes very good economic sense to them. So the economic drive to export natural gas to Trinidad will exist whoever is in power in Venezuela.”

T&T would benefit from the European Union seeking alternative natural gas supply during the Russia/Ukraine war.

“..The world, particularly the European Union, is looking to import natural gas from secure suppliers. Trinidad and Tobago is ranked as one of the very secure suppliers of natural gas to markets like the EU. So that gives us the ability to monetise that natural gas to sell to international markets.”

TT should emphasise returns from oil , as the window for that shrinks with popularity of electronic vehicle.

 

 

 

 

LNG transforms the economy

2024, 09/24

Twenty-five years ago, in 1999, Government expenditure for that fiscal year stood at $10.52 billion. Seven years later, in the 2006 fiscal year, expenditure escalated, more than tripling to $37.08 billion. Even with an adjustment for inflation, which would lift $10.52 billion to $19.87 billion, that expenditure would still be less than half the expenditure of the government dating back to 2008.

Between 1999 to 2006, government expenditure jumped by 252 per cent, tied to the increased energy sector revenues, mainly as a result of returns from Atlantic LNG. Mariano Browne, former minister in the Ministry of Finance, said,

“The change really starts off in 1999 because revenue rises as Atlantic LNG comes on stream. The budget expands. with more revenue and more expenses.”

First LNG was produced on April 11, 1999 from Train 1, which would supply three million tonnes of LNG per annum and 6,000 barrels per day (bpd) of natural gas liquids (NGLs). Expenditure continued to rise, as Atlantic operations began to expand. On March 13, 2000, the Government and Atlantic signed an agreement for a two-train expansion. Operations commenced with first LNG from Train 2 in August 2002 and from Train 3 in April 2003.

Train 4 was completed in December 2005, then the largest LNG train in the world, with double the capacity output of Train 1, producing 5.2 mtpa of LNG and 12,000 bpd of natural gas liquids (NGLs). First LNG from Train 4 commenced in May 2007.

The spike in revenue and the spike in expenditure are associated with coming on stream of Trains 2, 3 and 4 is supported by the Central Bank annual report for 2006.

“The nexus of growth emanated from the energy sector, following the commissioning of the Atlantic LNG Train IV facility in December 2005 and the M5000 methanol plant in October 2005. The other petroleum subsector led the way with real growth of 17.2 per cent, as LNG production was heightened by the introduction of the fourth and largest train, but also from higher crude oil and natural gas production.”

Some of those returns were placed in investments,notably the Heritage and Stabilisation Fund established in March 2007. It was the Interim Revenue Stabilisation Fund (IRSF), launched in 2000 in the wake of the energy recovery spurred by Atlantic operations. The HSF was established with US$1.40 billion, an initial transfer from the IRSF.

Apart from that, the government opted to use the increase in revenue to address outstanding issues.

During the early 2000s, allocation for transfers and subsidies in particular began to rise with salaries for public servants, subject to a freeze since the late 1980s, being addressed. Noting that in most cases revenue spikes also came with increased salaries for public sector employees.

Browne said, “Expenditure is easy to go up, hard to go down. A significant percentage of the budget was wages and salaries.“

In the 2003 budget presentation, on October 21, 2002, then Finance Minister and Prime Minister Patrick Manning addressed the 15-year-old debt to public servants.

“The current expenditure estimates include a one-time payment of $600 million to cover salary arrears. This one-time payment leads to the overall deficit of $623 million. Excluding this, the budget deficit would be a mere $23 million. “

If that seems familiar, last year’s budget included a billion-dollar allocation for back pay for public servants as the government sought to settle long outstanding wage agreements with sectors dating as far back as 2013, with a 4 per cent settlement on offer.

Apart from salaries, investment was also made in infrastructure as major government construction projects received green lights.

Economist Indera Sagewan remembered the start of Manning’s Vision 2020 projects.
“That is a period marked by rapid expansion. and expenditure a la Manning’s grand vision.. massive inflows of PRC workers, construction of the overpass at Grand Bazaar, Hyatt Hotel, Waterfront project, significant expenditure on preliminary feasibility studies for a rapid rail, consequentialt investment in the TGU power plant, constructed for the aluminium smelter, entertainment venues of NAPA, SAPA and Government Campus Plaza were constructed.”

The 2006 Central Bank Annual reported the numerous projects slated.
“Dominating non-energy activity was growth in the construction sector (17.1 per cent) driven by state projects, such as the government campus, the waterfront project and social infrastructure upgrading,”

Introduction of the Government Assistance for Tuition Expenses programme (GATE) in 2004 fostered tertiary education.

However, 2009 signalled beginning of a downturn. In the 2009 fiscal year, revenue declined by 33 per cent, “primarily because of the decrease in energy revenues occasioned by lower energy prices,” which forced the government to revise budget estimates on two occasions “to cater for lower energy prices,” according to the Central Bank Annual Economic Survey for 2009. Although initially there was a decline in expected revenue in 2009, expenditure continued to rise, particularly in another oil boom in the early 2010s and a subsequent adjustment in wages.

“The jump in 2011 in particular, is a 50 per cent jump in the amounts that appeared under transfers and subsidies. That goes up from 15 billion to 30 billion in 2011, “ said Browne.

Since then, budget expenditure has remained between $48 billion and $61 billion, depending on the volatility of global energy prices, especially the price of LNG.

Twenty-five years on, Atlantic is still a cornerstone of the economy, as in December 2023 the government hailed the successful negotiation of restructuring of Atlantic ownership. That deal saw bpTT with 45 per cent, Shell 45 per cent with the National Gas Company Ltd (NGC) at 10 per cent—a change from each of the four trains having different ownership structures.

Previously, the government, through state-owned NGC, had 10 per cent stake in Train 1 and 11.11 per cent shareholding in Train 4. Train 1 has been offline since 2020 ( at a losss of TTD240 million for NGC).

In 2006, T&T produced a total average of 3.88 billion cubic feet per day (bcf/d) of natural gas, with 2.01 bcf/d going to produce LNG. By 2010, the year of peak production, total gas output had risen to an average of 4.33 bcf/d of natural gas, with LNG production rising to 2.32 bcf, according to the Ministry of Energy.

By 2015, s total natural gas production was down to 3.83 bcf/d and LNG output had fallen to 2.18 bcf/d. By June 2024, s total natural gas production had declined to 2.45 bcf/d and LNG output had slipped to 1.09 bcf/d

Concerns about declining natural gas production levels remain.

 

Receiver to seize Dragon Gas payments

The Supreme Court approved a receiver to pursueUS energy giant ConocoPhillips enforcement of a US$1.33 billion ($8.97 billion) claim against Venezuela’s state-owned oil companies for past expropriations, including payments stemming from the Dragon gas deal.

On September 27, Justice Frank Seepersad appointed Anthony Pierre, of Moore Business Solutions TT, as interim receiver over Petróleos De Venezuela, SA (PDVSA) assets in TT. Pierre would be expected to provide periodic reports on his progress to the court.

According to the receivership order, these assets include “any compensation (or other monies) payable to PDVSA for relinquishing its right in respect of the Dragon Gas Field and for the infrastructure it owns; any right accrued to PDVSA to be paid consideration, now or in the future, by the TT government or any of its departments, the National Gas Company (NGC), and/or any of its subsidiary companies and/ or any of their respective bankers under any agreement for the supply and purchase of gas extracted from the Dragon Gas Field.”

ConocoPhillips’ application was filed on September 25, in the name of its two subsidiaries Phillips Petroleum Company Venezuela Ltd (PPCVL) and Phillips Petrozuata BV against PDVSA and its two subsidiaries Corpoguanipa SA and PDVSA Petroleo SA.

Seepersad said his decision was made as there is a risk that PDVSA will move assets from TT’s jurisdiction to avoid paying ConocoPhillips.

The September 27 decision followed ConocoPhillips’ previous application for the enforcement and recognition of the Petrozuata arbitration judgment in TT. On May 27, Seepersad gave ConocoPhillips the green light to enforce its US$1.33 billion arbitration award in Trinidad if it could establish there were assets held by the Venezuelans or money owed to them (PDVSA) by entities in TT.

The decision gave the US oil company the right to seize any compensation to Venezuela from joint gas projects with Trinidad. His order was varied to amend the method of delivery of service and the Venezuelan companies were given until July 17, to apply to set aside the order. However, that deadline passed with no attempt made by PDVSA and its two subsidiaries to do so.

In June, Energy Minister Stuart Young denied claims that the court’s recognition of the Petrozuata award would affect the 30-year-exploration and production license for the Dragon gas field. The government secured a 30-year license for the Dragon gas field as well as a specific amended OFAC license from the US, to develop Dragon and produce and export gas from the field to TT. Venezuela and Trinidad, along with TT’s National Gas Company NGC and Shell are seeking to develop major offshore gas fields shared by the countries and on the Venezuelan side of the maritime border.

Young also referred to an announcement in late May that the Government was granted another OFAC license to develop the Manakin-Cocuina hydrocarbon field. That license is due to expire in May 2026.

Seepersad said the modality of payment under the OFAC licence was “sufficient to hold there are likely receivership assets which exist or can become due and owing and same can be possibly transferred out of the jurisdiction.”

ConocoPhillips’ lead attorney Andrew Stafford, KC, referred to Young’s statements, confirming PDVSA’s intention to relinquish ownership and operation of the Dragon gas field.

A 400-plus page affidavit from attorney Stephen Richard Dillon Hayes of the law firm of Kobre and Kim, Broad Street, London, noted that Shell and NGC committed to reimbursing PDVSA for its earlier investments at US$1billion, having previously insisted on a US$65 million signing bonus payment. Hayes said while ConocoPhillips would not be entitled to payments to Venezuela, any sums owed to PDVSA associated with the license agreement were susceptible to enforcement action.

“Any sums due to PDVSA would not be shielded by a claim of sovereign immunity since those sums are not due to Venezuela as a sovereign entity,” Hayes said, referring to Young’s statements that the “same 30-year licence is not anywhere related to PDVSA. …there is something called the ‘corporate veil’. …the licence is with the Government of Venezuela, which is a sovereign entity.”

There is also a concept called ‘sovereign immunity’. So whilst you may have a decision against a commercial entity called PDVSA and payments with respect to PDVSA, that does not automatically equate to the Government of Venezuela. You cannot just simply pierce a corporate veil, Young said.

However, Hayes said, “As is put forward in the written submission of the claimants, any sums due to PDVSA would not be shielded by a claim of sovereign immunity since those sums are not due to Venezuela as a sovereign entity.”

Seepersad said any defence of state immunity, at the execution stage against assets of PDVSA, would be a difficult defence to mount.

From the minister’s statements and the other evidence provided by ConocoPhillips, there was likely to be “some type of monetary compensation” from the OPAC licence agreement. “The modality of the payment of the OFAC licence is sufficient to hold there are likely to be receivership assets which can become due and owing and can be possibly transferred out of the jurisdiction. If this was done, it would put it outside the reach of ConocoPhillips and the Supreme Court“.

Seepersad noted that PDVSA did not have tangible assets in TT, apart from those identified stemming from the Dragon gas deal, and considered the difficulty for enforcement so the appointment of the receiver “would offer a level of practical protection.”

Hayes said it appeared that PDVSA has made claims to recoup its investment in the Dragon Gas Field which NGC and/or TT may be obligated to pay. He also referred to the development of the Manakin-Coquina gas fields between bp, PDVSA, Venezuela, and NGC, Young’s statements on the negotiations an the award of an OFAC licence in July 2024 and the possibility of natural gas from Venezuela’s Loran gas fields.

However, for now, ConocoPhillips will not be seeking an order on the Manakin-Coquina and Loran gas fields projects until agreements are reached and made clear. If at that point, rights accrue to any of the defendants under those agreements, ConocoPhillips said it reserved the right for the preservation of those assets by the interim receiver.

Hayes said ConocoPhillips has applied for a special OFAC licence to take steps to execute against the receivership assets but its application is still pending. Hayes also provided the court with extensive details on PDVSA’s “record of evasion,” which was referred to by the judge in his ruling. ConocoPhillips referred to past attempts to enforce international arbitral awards against Venezuela and its state-owned companies.

However, it alleged, “Venezuela and those state-owned enterprises have taken drastic steps to try to place assets situated around the world out of the reach of creditors and to thwart execution, including resisting enforcement action in other countries on the Petrozuata award.”

Seepersad said he considered injunctive relief to prevent payments to PDVSA and the grant of a declaration of rights but decided against it as the State would have to be joined as a party to any such proceedings which would involve time and expense incurred by taxpayers.

“That is an unnecessary course having regard to the nature of the award registered in TT and the undeniable right the claimant has to enforce the award to ensure payment is received…The appointment of a receiver is a more viable option… in a dispute which is essentially a commercial dispute.”

Terms of the receivership order

The receivership order approved by the court not only extends to any compensation payable to PDVSA for the Dragon gas field but also any rights under other agreements for the supply of gas including the Manakin-Coquina and Loran gas fields without the receiver having to return to the court with a new application.

The order also gives the receiver the right to collect and take control of the receivership assets; and request information on those assets from third parties in TT, among others. The receiver and his staff would be paid from the receivership assets up to a limit of US$50,000.

Like the previous order, PDVSA and its subsidiaries have the right to apply to have the receivership order set aside within seven days of service of the court’s order. ConocoPhillips was also represented by TT attorneys Garvin Simmonette and Sophia Vailoo.

Background

In the early 1990s, Venezuela created a new fiscal framework to induce foreign investment in its heavy oil projects in the Orinoco Belt and elsewhere. ConocoPhillips helped Venezuela develop the Petrozuata, Hamaca and Corocoro projects by providing industry-leading technology and substantial long-term investments to the government of Venezuela.

However, in 2007, the Venezuelan government expropriated ConocoPhillips’ investments in their entirety without compensation, the company said in documents filed in support of its application to have the arbitral award recognised and registered in TT.

The arbitration award was registered in other countries. PDVSA paid ConocoPhillips about $700 million through a settlement agreement but ceased payments in late 2019, the court documents said.

 

 

 

 

3 bidders shortlisted for refinery divestment

30 September

In his 2024/2025 budget presentation, Finance Minister Colm Imbert announced that Cabinet agreed to a shortlist of three bidders for acquisition of the former Petrotrin refinery in Pointe-a-Pierre.

1. TT-based CRO Consortium, comprising DR Commodities Ltd, Chemie-Tech and Ocala,
2. US-based iNca Energy LLC and
3. Nigeria-based Dando PLC,

were selected by Scotia Capital (USA) and an evaluation committee, from a list of ten interested parties.

Scotia Capital was hired to manage the government’s third procurement process for the takeover. Imbert announced a formal selective request for proposals process will now be initiated to determine the winner of these companies.

An evaluation committee, “comprising knowledgeable and experienced persons” had been selected from the public and private sectors, “to evaluate a complex transaction of this nature.”

Scotia Capital required potential bidders to address specific requirements in its expressions of interest, including proof of qualification to own and operate the refinery assets, experience in operating a refinery and evidence of the potential source of financing, among several others.

Government tried to sell or lease the refinery twice since its closure but was unsuccessful because the preferred bidders “could not show any tangible evidence of their ability to raise the necessary capital to open and operate the refinery.”

Patriotic Energies and Technologies Co Ltd, owned by the Oilfields Workers’ Trade Union (OWTU) submitted a bid in 2019 and was initially given the nod to acquire the refinery. Their bid faced challenges, owing to financing concerns, and negotiations eventually fell through.

In July, multinational Jindal Steel and Power Ltd (JSPL), of India expressed an interest in acquiring the refinery but withdrew in early August. The PM blamed the Opposition for personal attacks against the owners, chasing JSPL from the bid.

Imbert said, “In pursuit of the overarching objective to attract private sector investment for the reopening of the refinery, Trinidad Petroleum Company – the company holding assets for the defunct Petrotrin – commenced a third procurement process in 2024, with the solicitation of expressions of interest from new potential bidders, and the parties who participated in the previous two attempts.”

He said the former refinery was unprofitable because it was overstaffed, operating with five times the number of workers required for efficiency and “would never have been profitable under its previous configuration.

“However, the government believes that if the refinery can be reopened without any burden on the treasury, this will provide a number of benefits in terms of employment, increased economic activity, availability of locally-produced fuel and reinvigoration of fenceline communities.”

Taxpayers will be protected.

“It must be stressed that in this process, the government has no intention of exposing taxpayers to the recurring billion-dollar losses that occurred previously in the operation of the refinery…The success of this venture is predicated on the principle that it be at no cost to the taxpayer.”

Past Petrotrin workers demand land leases before 2025 poll

Ex-Petrotrin staff are demanding leases to land promised as part of their termination benefit before the next general election, to demonstrate this is not another election ploy.

Spokesman for almost 5,000 disgruntled, potential landowners, Christopher Jackman, said six years after closure and restructuring of the State-owned company, no employee has received a parcel of land promised by the praetorian Prime Minister.

All they had thus far, are promises. The agreement was for workers to get a plot as part of their termination package entitlement. Lands would be distributed in three phases, for first-time homeowners, residential plots for property owners in the second phase and agricultural plots in the third and final phase.

Recipients would be drawn by a lottery system. Three raffles were drawn from the lot of 2,816 applications for first-time homeowners. The Commissioner of State Lands issued lease titles on September 7, 2021 (70), August 6, 2022 (21) and August 9, 2023 (180). Only 170 were shortlisted.

Through a Freedom of Information request from the Land Settlement Agency (LSA), Jackman learnt that not one of the qualifying 170 received a lease.

LSA confirmed by a June 17, 2024 letter that, “to date, no deeds of lease have been issued to eligible former employees. The issuance of deeds of lease to eligible randomly selected beneficiaries is being processed.”

Stating that the programme seems stuck in the first phase, Jackman sought clarification about residential and agricultural plots but the agency claimed it knew nothing about these other two phases which slapdash Rowley promised.

To this query, the LSA replied, “With respect to the distribution of agricultural plots, the programme’s policy framework mandates that the Ministry of Agriculture, Land and Fisheries must first identify, develop and provide the necessary infrastructure for these plots.”

LSA said, as an agency under the Housing Ministry,” it has been granted the responsibility to carry out the infrastructural development works of all residential lands, including the provision of and necessary lotification of the said lands under the programme.”

The last raffle was drawn before the last local government elections (August 2023).

Now, before the election constitutionally due in 2025, giving land to the former oil workers is discussed.

On September 25, Jackman, a former president of the Pointe-a-Pierre branch of the Oilfields Workers Trade Union, led one-time colleagues, who felt “duped”, in a silent protest outside the Southern Academy for the Performing Arts (SAPA) where the Housing Ministry engaged in allocating lands.

Ex-employees expecting deeds/leases were given letters of issuance informing them lots were identified and they would be the recipient in the future. They were given an October deadline to accept the offer. Should the deadline pass without acceptance, the names of those recipients would return to the pool for another raffle draw.

Jackman said, “It was not a distribution of deeds. We feel this was just another exercise in politics. Remember, they offered and awarded the OWTU the opportunity to run the refinery, before an election and that never materialised. Now they are promising workers land again, before the 2025 election.”

Minister Adrian Leonce, who distributed 150 letters, referred to the silent protest. He said the distribution exercise was proof of Government delivery on its promise and a formal acknowledgement that applicants were selected to receive a residential lot under this programme. Whereas, before the former employees would have been told of the general area in which lots are located, on Wednesday, specific details of location and lot numbers were made, allowing potential owners access to visit the land.

Hypocritical Leonce chastised those who “have made it their life’s work to find problems in every solution. Time was needed to develop the land and bring it to a state of readiness to be handed over. Demarcation of lots and equipping the land with electricity, water lines and access via roads took time. Former workers would be given their deeds and they would become landowners very soon.”

 

 

 

 

Procurement Regulator advised on sale of defunct Petrotrin refinery

2024, 09/14

Procurement Regulator Beverly Khan confirmed that her office provided guidelines to the Government on the sale of the Petrotrin refinery and did not find anything “alarming with the initial steps.” Since being mothballed in 2018, the Government has moved to sell the Pointe-a-Pierre plant. Fuelling that thrust is the $500,000 spent monthly to preserve the infrastructure.

Khan addressed concerns regarding whether the systems in place to ensure transactions related to any possible sale of the refinery are conducted above board.

“We have provided some guidance based on best practice and based on the objects of the act,” she explained.

Recently, questions about proposed business deals linked to the sale of the refinery have taken the spotlight, after Indian businessman Naveen Jindal expressed interest in acquiring it. However, Jindal pulled out, citing character assassination from the Opposition UNC, claimed Jindal faced corruption charges in his country and that proper vetting procedures were not being executed regarding sale of the Petrotrin refinery.

Calls have subsequently been ramped up for due process in the sale of the refinery. Khan contended that the matter remains on the Office of Procurement Regulation’s (OPR) radar.

“It does fall under the act, under the functions of the OPR we can audit, investigate not just in relation to procurement but in terms of the disposal of public property and public property as defined in the act refers to real property and personal property. At this point in time, we do not have regulations regarding real property, but in the absence of that the OPR can give best practice advice and ensure disposal of public property is in compliance with the objectives of the act.”

Khan confirmed that the guidance provided this year on the sale of the refinery has been well received and is confident that proper procedures will take place.

“I did not see anything alarming as it relates to the initial steps, based on the information that was shared. The guidance we gave was maybe how to strengthen certain things based on best practices because we have no regulations, there was nothing that was shared with me that was alarming on the matter,” Khan added.

 

 

 

 

Methanex restarts Titan plant, Atlas in preservation mode

September 25, 2024

Methanex has recognised its Trinidad and Tobago team for successfully transitioning operations from its Atlas Methanol Plant to its smaller Titan Plant at Pt Lisas.

The switch was announced last October after Methanex announced it had signed a two-year natural gas agreement with the National Gas Company of T&T (NGC) to restart its wholly owned Titan plant in September.

Methanex wrote, “It’s a significant accomplishment that required tremendous effort over the past year, and we want to recognise the team’s dedication and commitment to safely navigating this complex transition. It’s a testament to their resilience, expertise, and collaborative spirit.”

It said the Atlas plant-of which Methanex holds a 63.1% economic interest- will be placed in preservation mode. This was due to the expiration of its legacy 20-year natural gas agreement this month.

Methanex has promised to remain focused on maintaining its robust asset integrity systems in preparation “to bring this plant back online when conditions allow”, it added in the post.

“Looking forward, we are encouraged by the developments to increase the natural gas supply within the T&T energy sector, and we are prepared to restart Atlas when conditions are favourable and sustainable.”

During Methanex’s latest investor call for the quarter ending June 30, 2024, in August, president and chief executive officer Rich Sumner said Methanex’s Titan plant has been idled since March 2020. The company expected no additional costs attached to this switch and the Titan plant has the capacity to produce 875,000 tonnes of methanol a year. However, Atlas has the capacity to produce 1,085,000 tonnes of methanol a year which amounts to a reduction of one million tonnes annually.

 

 

 

 

Gulfstream for sale

The Gulfstream arrived at Sea Lots, Port of Spain, on August 22. The government is seeking buyers for the breakaway barge which was grounded in February off the coast of the Cove Eco Industrial Park, Tobago.

After it was refloated in August, the Gulfstream was towed to Trinidad. Now, the state plans to sell it “as is and where is.”   In a procurement tender notice from the Ministry of Works and Transport on September 16, prospective buyers were invited to submit packages for the Maritime Services Division. Solicitation documents are available from the procurement unit of the Ministry of Works and Transport.

“The award will be executed in accordance with the pre-defined evaluation criteria outlined in the solicitation document. The services to be provided will be governed by the terms and conditions outlined in the respective solicitation document.”

The deadline for submission is October 1 at 10 am and interested buyers were advised that no late tenders would be considered. The vessel was found with no crew onboard after running aground and overturning off Tobago’s south-western coast on February 7.The capsized barge was found leaking an oil-like substance approximately 200 metres off the coast of Cove. Some 30,000 of bunker fuel leaked from the overturned barge.

Soon after the spillage occurred, the authorities suggested the tanker had originated in Panama and had been towed by a tugboat which was never located. In May, Energy Minister Stuart Young estimated that the overall damage could reach US$30 million.  In August, the Prime Minister said the Government continues its search for the fugitives responsible for abandonment of the Gulfstream. However, it still has not caught up with the culprits.

On September 16, the ministry issued a public notice advising owners of several wrecked vessels they had two months to remove them before they were disposed of by the Director Maritime Services, “the principal receiver of wrecks,” who has taken possession of vessels stranded/abandoned within territorial waters.

The following boats have been identified:

1. Treasure Queen 2 at Pier 4,
2. Sunken Yachts at Harts Cut Bay,
3. Submerged Barge at Salt Dock,
4. Insel Riems at South Point Gourde,
5. Cluster at Masson Bay and
6. 11 vessels in cluster (Taurus, Star, Saga Moon, Lita, Transporter 2, Annet and Frank H Wetmore, Saga Star and others) at Escondido Cove.

 

 

 

Gulfstream on sale

…capsized barge polluted Tobago’s coastline in February

2024, 09/17

The Gulfstream Barge was towed into Port-of-Spain on August 22.

The Ministry of Works and Transport on Friday issued a request for proposals for the sale of the Gulf Stream barge, which in February, capsized off the southern coast of Tobago, in the vicinity of the Cove Eco Industrial and Business Park Tobago, discharging thousands of barrels of fuel oil that polluted some of the island’s beaches.

According to the notice on the ministry website, the sale is being organised on a “as is and where is,” basis and the award to the successful acquirer “will be executed in accordance with the pre-defined evaluation criteria.” These are outlined in the solicitation document, available from the ministry.

“Tenderers are advised that the opening of tenders will be conducted via Microsoft Team,” the ministry said, adding that “late tenders will not be considered in any circumstances.”

The Ministry of Works and Transport also pointed out that it “does not bind itself to accept the lowest or any other tender and reserves the right to cancel the present notice in its entirety or even partially, without defraying any cost incurred by any firm in submitting their tender. The services to be provided will be governed by the terms and conditions outlined in the respective solicitation document.”

Deadline for the submission of proposals is October 1, 2024.

The spill, which was first spotted off the coast of Tobago’s Atlantic coast on February 7, damaged mangroves and threatened the tourism and fishing sectors.

The oil spill in Tobago’s waters was featured in international news outlets, with the BBC reporting that “oil leaking from a capsized barge off the coast of Tobago has spread hundreds of miles to reach the island of Bonaire, located 50 miles (80km) north of the Venezuelan coast. Officials on Bonaire said the oil posed a “serious threat to both humans and nature”.

The Gulf Stream was refloated last month under the supervision of a team from an internationally recognized salvage company, T&T Salvage Inc and later towed to Trinidad.

Energy Minister, Stuart Young, says T&T made representation to the United Kingdom-based International Oil Pollution Compensation Fund (IOPCF) for compensation ranging from US$14 million to US$20 million.In August, Prime Minister Dr. Keith Rowley said government was continuing its search for the villains responsible for abandonment of the Gulfstream. More than six months after it capsized, it still remains unclear who owns the barge and what caused it to sink.

Numerous reports reveal links to Panama, Venezuela and Africa which can be investigated at UNGA by the Ministry of Foreign Afairs and the Permanent UN Mission, OAS and the Commonwealth Secretariat.

 

 

 

Strategic initiatives in gas processing

September 19, 2024

Dominic Rampersad, president of Phoenix Park Gas Processors Limited (PPGPL), talks to The Energy Year about the company’s latest strategic international activities and how it has navigated gas supply challenges. National Gas Company subsidiary PPGPL is among the largest gas processing facilities in Latin America.

What is the significance of the technical service agreement PPGPL signed with The Gas Gathering Limited (TGGL) based in Ghana?

This agreement is significant from multiple perspectives. It is the first time that PPGPL has provided its services to a third party under commercial terms and conditions and is an entry point to the Ghanaian natural gas sector which allows PPGPL to gain firsthand business intelligence into any future emerging investment opportunities in this growing market.

It also represents a new source of income for PPGPL while strengthening the government-to-government relationship between both countries and strengthens the relationship between PPGPL and the NGC Group of Companies and Ghana National Gas Company (GNGC).

Phoenix Park Energy Marketing LLC (PPEML) has signed a letter of intent to double propane exports to Mexico. What is the key impetus or strategy underlying this decision?

The Mexican LPG market is a growing market. As the Mexican government continues to deregulate this market, the private sector has increased its investment, which has led to the widening in the customer base that PPEML has access to. Therefore, the commercial viability of that market is increasing.

This led us to take the investment decision to expand the capacity of the Hull Terminal, not only to cater for this growth but also to leverage the economies of scale that this expansion will bring. At present, the EPC contract has been awarded and the project is on schedule and within budget.

In what ways has PPGPL navigated gas supply challenges over the past year to position the company for continued successful operations?

As the government, NGC and the upstream producers work towards securing a reliable gas supply for Trinidad and Tobago, PPGPL continues with its value creation thrust by focusing on delivering the investment returns on its assets and managing its costs. There continues to be a strong focus on process safety and asset integrity complemented by a focus on market development. In this context, 2024 has seen much better results when compared to 2023 as the company’s strategic initiatives are executed.

PPGPL has taken a step forward in the Trinidad and Tobago energy market by releasing its first ESG report. What is the significance behind this move for the company?

Excellence in ESG is a strategic objective of PPGPL. We see this as an element that contributes to the sustainability of the business. From a business perspective, operating according to ESG standards is now a must-have and therefore PPGPL’s publication of the 2022 ESG report is reflective of our commitment to attaining the required ESG standards.

From a core value perspective, we have an obligation to manage our business in a manner that provides transparency of our operations. The ESG report provides this information. To note is that the 2023 report is in development and will be released in Q4 2024.

How will the evolution in the regional market for LPG in the short term impact PPGPL over the next year?

Demand in the regional LPG markets is expected to grow by 4% per annum over the next three to five years. During this period, additional supply will come to market from two regional sources: the USA and Guyana.

PPGPL has an established position in the regional market and hence our intention is to solidify this position and leverage the various competitive advantages we have so that ultimately the customer experience is enhanced.

 

 

 

 

PPGPL

2024, 09/14

PPGPL president Dominic Rampersad explained the various projects undertaken by the company.

Decreasing the backlog of people waiting to get cancer treatment and upgrading the equipment at the Regional Health Authorities for quicker diagnostic results is the aim of Phoenix Park Gas Processors Ltd (PPGPL),which is part of the NGC group of companies.

PPGPL donated 14items of oncology equipment worth over US$10 million ($68 million) which included an MRI unit, an X-ray machine, mobile fluoroscopic systems and CT scanners. The natural gas liquids company presented the oncology diagnostic and imaging machines at the Cancer Centre, St James Medical Complex.

Dominic Rampersad said cancer is something that “when it affects you, you realise what an ordeal it becomes.”

The company, in extending its involvement in cancer treatment, partnered with the T&T Cancer Society over the years to upgrade its services to the community. PPGPL, partnered with another entity about five years ago, by donating digital mammography equipment to the Cancer Society, which helped treatment of breast cancer. However, it was the donation of this diagnostic equipment which caused the company to make a step change.

“Just a year before we decided to make this donation, we lost one of our employees to cancer. It was a heart-wrenching experience for us because the time between diagnosis and death was just about two months. We saw firsthand what he went through in getting the treatment, but also affording the treatment. So, we went to General Electric and said, this is what we’d like to do. And they were more than happy to support us. They told us, at the point of donation, it was their most up-to-date piece of diagnostic equipment that was donated.”

The intention is really for every citizeny to be able to access to first-world healthcare for cancer treatment and cancer detection at the public hospitals and not have to spend thousands aboard for treatment.

“We are here not just to supply you with cooking gas. We are here to supply you with other things to make your life better. And we do think that this donation is going to make a difference. We felt that it’s already making a difference. And we will continue to support you. This is not the be-all and end-all for us with regards to this particular donation. We want to go a step further as we discussed with the Ministry of Health, as we see this as a corporate responsibility.”

Now that the RHA’s have this state-of-the-art equipment, the next step is to enhance the functionality and the capability of the equipment to speed up the rate of diagnostic results.

“I would have discussed with the Minister of Health and his technocrats, what we can do now with artificial intelligence and machine learning and advanced technology, how that can now be added to the functionality of that equipment. So that by the time you do your test, the rate at which the diagnostic comes back, and the depth at which it is analysed, it is now a combination of technology and the experience and expertise of our local doctors in advising the patient on the next step of treatment for that patient. The world has gone into advanced technology. Everything now is being touched by artificial intelligence.”

The PPGPL president revealed that the Minister of Health has accepted the offer with regards to AI, and as a result, the company is now entering the evaluation stage to work with General Electric, to determine what technology they have in the space of artificial intelligence to apply to this equipment.

“With the application of artificial intelligence, it means that our doctors and technicians are going to need to upskill in order to be able to use it. So, it brings learning, it brings development, it brings upskilling.”

He said it is not just about using the technology but how it is used to advance the work of cancer screening and diagnosis.

“It has a multiplier effect on the skillset of the people who are using it. May be in time we may see that the Ministry of Health put out an advertisement for AI technicians to use this equipment. So we see that as the next step, the use of the equipment, the upskilling of the workforce within the Ministry of Health and the medical sector. And as the technology evolves, we will partner with the Ministry of Health to ensure that the use of the equipment evolves with the technology.”

PPGPL has spent $90 million from 2010 to now on cancer and other projects. He indicated that the company spends between $2 to 3 million annually on projects. PPGPL is looking at enhancing kidney care in T&T.

“We’ve seen a lot of emergence of dialysis centres being talked about in the country. And we’ve even seen, from some of our employees, communities of people who go for dialysis every day. And you have to ask yourself, well, what is causing that? Just as we’ve seen when we started looking at the cancer treatment, there is a backlog with that as well. So, dialysis is one thing, but dialysis is trying to preserve what you have.”

Rampersad indicated that the gas company wants to start partnering with the Ministry of Health and NGOs in looking at what can be done to advance kidney care in the country, not just at the equipment level, but also at the specialisation level as well. This would involve some of the country’s young doctors who are specialising in areas like kidney and internal medicine.

“That is now going to become an additional focus for us because kidney care, even as it links to things like diabetes, is beginning to impact and have an impact on the community. As a company, we’ve read a lot of research on it and see the linkages between obesity, diabetes and kidney disease.”

Asked whether he has a message for corporate T&T to get on board, Rampersad said “We need to listen to the people. Not just when they speak, but more importantly, when they don’t speak. And we need to understand what those needs are and when those needs are. We cannot just limit our obligation to paying our taxes and think that our obligation ends there. We all live within this community. And so, it is not enough to sit on the periphery and look in.”

 

 

 

 

EV charging stations at Queen’s Hall

2024, 09/15

Minister of Energy and Energy Industries Stuart Young, SC, National Energy, assistant manager, Projects, Arden Rodriguez and National Energy, chairman, Dr Joseph Khan attended the opening of the EV charging stations at Queen’s Hall .

Energy Minister Stuart Young says the official handover of electric vehicle charging stations and solar LED lighting at Queen’s Hall in Port-of-Spain will serve as another means of energy efficiency in T&T.

“What we are doing is trying to lead by example, so I am very proud of the LED lights and even happier about those that are completely solar-powered. Those small changes have a knock-on effect on our energy sector and also on Trinidad and Tobago.

“It helps Queen’s Hall because when any institution looks to compete globally, one of the things they need to look at now is energy efficiency,” the minister explained, adding that this also falls into the category of sustainability.
It also demonstrates that efforts to develop renewables have a knock-on effect in terms of saving on electricity consumption.

“The domino effect would also help us to utilise the natural gas we would use normally to produce electricity.” Those molecules of gas can instead be sold. Those were particular policies that he has been trying to push over the last few years.

“The more we can move from using our natural gas for power generation, the more we can turn those molecules for revenue generation.”

Joseph Ishmael Khan, chairman of NGC agreed that this was a significant step in the country’s energy future, noting that three electric charging stations were officially presented along with 11 LED and 29 LED solar-powered car park perimeter lights.

Garfield George, general manager of Queen’s Hall, expressed his gratitude, saying, “This partnership has positioned Queen’s Hall as an active participant in environmental commitment. We are proud to demonstrate how cultural institutions can embrace environmental responsibility.”

The installations at Queen’s Hall complement other projects led by National Energy, such as the EV charging stations at Preysal and the collaboration on solar-powered EV chargers at The University of the West Indies St Augustine. Together, these initiatives underscore National Energy’s commitment to advancing a low-carbon future for this country.

 

 

 

 

Energy revenue down 51% for 2024

2024, 09/05

Economist Dr Valmikki Arjoon said the average price of natural gas exports during the first nine months of the 2024 fiscal year is down compared to the same period in 2023.

The decline in energy revenue is impacting the overall revenue collected by the Government. Energy revenues for the first nine months of the current 2024 fiscal year, are approximately $10.2 billion which is $10.8 billion lower than energy revenues earned for the same period in the 2023 fiscal year. That is a decline of 51.4 per cent.

“In fact, when we look at the data for the first nine months of the last fiscal year, energy revenues were just under $21 billion. Now these lower revenues for this year, aren’t just because of lower production levels, but also because of lower gas prices on the international market relative to the last fiscal year.”

Returns were far lower for the first nine months of this fiscal year compared to last year. The returns were in fact good compared to even some of the pre-pandemic years due to the government’s renegotiation of energy prices for the sector.

“What is noteworthy is that the energy revenues for the first three quarters of this fiscal year are in fact higher than the energy revenues from the immediate pre-pandemic era. So what the data shows us is that the revenues earned for the first nine months of this year are in fact higher than the energy revenues for the same period in fiscal 2018 by about 2.4 billion, and higher than the energy revenues earned in fiscal 2019 for the same period by about 1.2 billion, despite production being higher in those years by well over 1 billion standard cubic feet of gas per day.”

“What this is telling us is that the energy revenues for this year so far are actually higher than the revenues from the immediate pre-pandemic era, and this is likely because of the renegotiated higher gas prices that we now receive. And these gas prices are of course, a weighted average of the global prices that doesn’t just include the conventional Henry Hub, but they also include other prices like the Japan Korea Marker, the Dutch Title Transfer Facility and the UK National Balancing Point.”

Prices in these three benchmarks tend to be higher than the Henry Hub benchmark, which has helped T&T earn higher gas revenues, despite production levels being lower than the pre-pandemic era.

However even with this adjustment, the prices currently are still well below the prices on the market last year and, as a result the government has been placed in a bit of a financial bind.

“Because prices are still lower, this would have caused the total tax revenues for the government for the first nine months of this year to be about $5 billion lower than last year. The taxes on income and profits have fallen by about $8 billion and of course, because of these slashed revenues, that would have pushed a speed of borrowings to meet our fiscal spending obligation. We’ve recently seen that the reserve requirement was lowered to free up an additional $3.9 billion of additional liquidity in order to facilitate more borrowings for the government from the local market.”

On Monday, the Energy Ministry stated that while there was a dip in natural gas production in June, production outputs were set to normalise for the remainder of the year.

Preliminary data shows that natural gas production for the month of July 2024 increased to 2.3 bcf/d and further increased to 2.7 bcf/d in August with production for Q4 2024 projected to average at 2.5 bcf/d.

 

 

 

 

Clico repaid final $1B to Govt last year

2024, 09/10

Finance Minister Colm Imbert said that Clico addressed its obligation to repay its remaining liability of $1 billion to the Government in 2023, by selling all of its shareholding in Methanol Holdings International Ltd (MHIL) .Clico received a multibillion dollar bailout in 2009, which eventually totalled over $18 billion.

In the Senate , Opposition Senator Wade Mark posed the question, “Can the minister provide the details and status of the sale of Clico’s 56.53 per cent shareholding in MHIL to the Proman Group in late December, 2023?”.

The Finance Minister responded, “The information and answer to this question has been in the public domain for almost one year, and the matter has already been extensively addressed inside and outside of the Parliament. It is therefore curious that Senator Mark continues to beat this dead horse. The facts already in the public domain are as follows—as of April 2023, Clico’s remaining liability to the government for the Clico bailout was $1 billion.

“In addition, Clico had a statutory obligation under the Insurance Act 2018 to reduce its interest in MHIL to less than 20 per cent. In July of 2023 the other shareholder in MHIL, Consolidated Energy, approached Clico to acquire the full 56.53 per cent of Clico’s interest in MHIL. A sale price of US$337 million for the shares was agreed based on a valuation by an independent and reputable global valuation consultant, Charles Rivers Associates, plus an additional US$10 million as Clico’s share of dividends for 2023. All issues were thus satisfactorily addressed: Clico’s satisfaction of its obligation under the Insurance Act 2018, with respect to its shareholding in MHIL being reduced to less than 20 per cent; and Clico’s obligation to repay the government the $1 billion that was still owed in 2023.”

The opposition senator then followed up his question with an inquiry, “When did the Government receive the outstanding $1 billion owed by Clico to the taxpayers of the Republic of Trinidad and Tobago to settle its final outstanding debt obligations to the citizenry?”

The Minister replied, “In 2023.”

When the senator asked for a specific month that the debt was settled, Minister Imbert responded, “When I come to this place, I have to expect strange questions from Senator Mark. That was not part of the question. All Senator Mark complained about was the sale of MHIL shares by Clico. He said nothing about any debt owed by Clico to the government. Then it is therefore absurd to expect you to walk with that date.”

On December 27, 2023 the media reported that Clico sold its entire 56.53 per cent stake in MHIL, which is located in Oman, to the Switzerland-based Proman Group on December 22, 2023 for the sum of US$347 million ($2.35 billion).

In its 2023 audited financials, Clico reported that the sale of the subsidiary MHIL was completed on December 22, 2023. Partly as a result of the sale of MHIL, Clico reported $3.18 billion in accummulated surplus as at December 31, 2023.

The 2023 financials also disclose that the insurance company recorded $2.30 billion in profit attributable to the owners of the company. Clico is 49 per cent owned by Corporation Sole, who holds assets on behalf of the population. Its other major shareholder is CL Financial, which is in liquidation, with 51 per cent.

 

 

 

 

 

CDB denounces stalled projects

…blames administration changes

September 4, 2024

Acting vice-president of operations at the Caribbean Development Bank, Therese Turner-Jones told a panel discussion hosted by the Central Bank of T&T, “Building T&T’s Economic and Financial Resilience—The Role of Multilateral Financial Institutions”, that Trinidad and Tobago and the CDB’s “story” is not impressive.

Many specific projects were not completed despite the benefits they would bring. Turner-Jones attributed this large gap between identified and completed projects to administration changes.

“In the last country strategy, we identified over $430 million in projects and less than $10 million actualised. So, that is a concern because in the strategy we identified doing more on water and sanitation…there is a lot of room there and we are doing some technical assistance for your master plan for water resources in the country, but it hasn’t been outstanding in terms of what we have been able to do.”

Drawing from chief economist and general manager at the Department of Research of the Inter-American Development Bank Dr Eric Parrado Herrera’s comment on the impact of democracy, she said there was a need for deeper dialogue with citizens as opposed to only policymakers.

“Parrado Herrera mentioned something just in passing about democracy and the way we interact with members of our government who are members of our institutions… that dialogue tends to focus on a relationship at a point in time and I think what we need to be doing is going deeper where the dialogue is extended to civil society and the beneficiaries so it is not just seen as being associated with a particular administration.”

“Trinidad’s story, for me, is a good story for maybe how not to do a country strategy meaning it’s typically not aligned with an election cycle and what happens is, if it doesn’t get done in an administration then it’s abandoned and we have seen this across the region.”

Turner-Jones said administrations dump projects which are considered to be fine because they may not align with their mandate or they do not see the benefits of it during their administration.

Skilled workers and productivity

Director representative of the Development Bank of Latin America and the Caribbean Bernardo Requeña, in his presentation, showed there was a large drop in high-skilled workers as well as productivity in T&T.

“Actual productivity was negative in the past three years and that’s a huge issue. For example, of the nine most important sectors, seven had very low productivity while two had high-productivity—energy and trade—but the rest are low.”

Parrado Herrera added that to improve this, multilateral institutions and governments need to “think long-term” and invest more to ramp up productivity and increase the number of high-skilled workers. He said to further support economic transformation, digitalisation is greatly needed but is also hindered by low numbers of high-skilled workers and a dip in productivity levels.

The IDB’s lending framework for the 2021-2025 country strategy period is US$250 million with six operations projects costing US$488 million in the areas of institutional capacity, water and sanitation, trade, housing and health. So far, the recent approval has been the programme to accelerate the digital transformation agenda which cost US$42 million and was rolled out last December. 29 projects are valued at US$9.8 million in the areas of digital transformation, urban development, trade and education, among others.

Parrado Herrera said another way of having long-term investments could be through reforms which are difficult to implement in many countries. He said while sometimes these multilateral institutions may have a plan ready, political issues get in the way and create challenges in the rollout process.

Requeña also spoke on the transition from oil and gas to green energy, and said the project has to be clean enough and in the case of CAF, they are willing to finance projects specifically in the gas sector to help T&T jump to the next stage.

“Those changes do not happen in one week, one year or five years, it takes a while, one thing you do need is political will and this type of event, people hear this, go home and sleep with that and you can change the minds of people. But unfortunately, it’s not going to be fast but it’s part of the discussion.”

Turner-Jones also noted disaster risk management which needs to be discussed, given the inevitable climate changes and the effects on the hurricane season in the region.

 

 

 

 

NIF pays out $85.2 million

2024, 08/10

The National Investment Fund Holding Company Limited (NIF) reported that it made two coupon payments, the twelfth coupon payment of $85.2 million.

NIF said the payout came from its Series B and Series C bonds, which brought the total payout on these bonds since their establishment to $1.29 billion. The wholly state-owned company also said that its first coupon payment on the NIF2 Bonds amounted to $9 million.

Since its inception, NIF has been able to meet all its statutory payments in the light of its balanced and well-structured portfolio.

The next semi-annual coupon payments to bondholders of Series B and Series C and the NIF2 Bonds would be on February 9, 2025.

In its annual report for the year ended December 31, 2023, published on the Trinidad and Tobago Stock Exchange website, NIF chair Jennifer Lutchman said, “The performance of the investee companies remains healthy and the dividend inflows received in 2023 exemplify the robust portfolio collated in 2018.”

She broke down the dividend payments in the report as follows:

“a) Republic Financial Holding Ltd (RFHL) paid out overall dividends of $5.20 per share which was an increase of 15.5 per cent over the 2022 dividends of $4.50 per share;

b) Angostura Holdings Limited paid dividends of $0.35 per share, matching its payout in 2022;

c) Trinidad Generation Unlimited of $0.31 per share, matching 2022;

d) One Caribbean Media paid out $0.20 per share, compared with $0.17 per share received during 2022; and

e) West Indian Tobacco distributed $0.78 per share in 2023 compared with $1.42 during 2022.”

Lutchman said, “We ended the year with a portfolio of $8.66 billion which reflected an increase of $0.6 billion, since our establishment in mid-2018. The portfolio consists of shares from the five companies:

• RFHL with 29.95 per cent shareholding, which accounted for 66 per cent of the portfolio;

• Trinidad Generation Unlimited with 100 per cent comprising 17 per cent of the portfolio.

• Angostura Holdings Ltd with 29.9 per cent, comprising 15 of the portfolio;

• West Indian Tobacco Company with 5.4 per cent comprising 1 per cent of the portfolio; and

• One Caribbean Media Limited with 23 per cent comprising one per cent of the portfolio.

In delivering the 2020 budget, on October 7, 2019, Finance Minister Colm Imbert introduced the notion of a NIF2.

 

 

 

 

Plipdeco contracts probe

2024, 09/01

President of the Point Lisas Industrial Port Development Corporation Limited (Plipdeco), Ashley Taylor, was sent on administrative leave by the board in July, three months before his retirement in November. No notice of Taylor’s administrative leave has been filed with the T&T Securities and Exchange Commission (TTSEC) as Plipdeco is required to do in accordance with section 64 of the Securities Act 2012.

The act requires reporting issuers to file notices of material change with the TTSEC within three days of the occurrence and publish material change notices in two daily newspapers within seven days of the occurrence.

An internal investigation has since been launched into contracts negotiated during his 16-year tenure at Plipdeco.

The board’s decision stemmed from the terms of the lease agreement with TT Iron Steel Company Limited (TT Iron). TT Iron acquired the defunct Arcelor Mittal steel plant , in liquidation since 2016 by Christopher Kelshall, in Point Lisas in July and Plipdeco is its landlord.

TT Iron, chaired by Joel Pemberton, agreed to pay US$30 million for the plant—a downpayment of US$3 million with the remaining US$27 million to be paid by December 31, 2024. However, Mittal had incurred close to $44 million in rent outstanding to Plipdeco at the time of closure, and TT Iron is responsible for that debt, on acquisition of the plant.

Initially, Taylor negotiated the terms, in which TT Iron would operate for the first three years rent-free. However, when the board raised issues with those terms, it was renegotiated to six months rent-free. As part of the initial payment from the liquidator to Plipdeco, the terms were that $22 million was paid upfront, with the remainder of $22 million to be paid in January 2025.

The TT Iron lease happened when Plipdeco adopted the Office of Procurement Regulations’ (OPR) Procurement and Disposal Advisory Committee (PDAC) into its administration in June. Plipdeco is majority-owned by the Government. As a result, Plipdeco sought legal advice on the matter given that Plipdeco sub-leases its leased state lands and directly leases freehold lands for companies in the estate.

Pemberton said that while the agreement took longer than expected, it was negotiated on TT Iron’s behalf by legal firm Dentons and Plipdeco’s external counsel. The board’s decision led to issuance of a notice on July 9 that the company’s annual general meeting, scheduled for two days later on July 11, would be moved to September.

Taylor was sent on leave on July 29. An employee said,“It’s become like a witch hunt.”
Dr Averne Pantin, vice president of Technical Services, now Acting President, has begun restructuring of Plipdeco, the publicly traded landlord of Point Lisas Industrial Estate.

Through Corporation Sole, the State owns 51 per cent of the company.    The other 9 shareholders with the largest block of shares are Masa Investments Limited (7.6 per cent), Chan Ramlal Limited (6.67 per cent), Tatil Life Assurance Limited (2.84 per cent). Bourse Nominee Account Co (2.53 per cent), Atlantic Investments Company Limited (2.52 per cent), Republic Bank Limited (2.48 per cent), Riyad Khan (1.49 per cent), Olympic Manufacturing Limited (1.26 per cent), and George Aboud and Sons Limited (1.22 per cent).

In its financial statement that ended June 30, Plipdeco said that as 2024 progresses, it intends to utilise its strong performance thus far as a platform to advance its strategic plan and operational activities.

Chairman Dr Daniel Dookie said,
“We are also pleased to welcome TT Iron Steel Company Limited as a new tenant on the industrial estate. As a tenant, TT Iron Steel Company Limited will leverage the corporation’s amenities on the industrial estate and port facilities to enhance their production capabilities. This move aligns with our commitment to fostering industrial growth and the provision of a conducive environment for business to thrive. I wish to extend utmost gratitude and appreciation for all efforts expended thus far and eager to continue our collaborative efforts, which will create and strengthen synergies that favour the Corporation.”

Port Point Lisas is the second major port in Trinidad, on 23.33 hectares on the Gulf of Paria, with easy convenient connections to major shipping routes. With its strategic location, the port caters for containerized cargo from the the Americas, Europe and the Far East.

Port Point Lisas is a multipurpose cargo facility. With six commercial berths (Nos. 1, 1A, 2, 3, 4 and 5) the port handles a wide range of traffic including dry and liquid bulks, containers, general cargo and break bulk servicing the individual and business sectors. The port has expertise in handling project cargo, mainly for new plants on the adjacent industrial estate.

The world-class Point Lisas Industrial Estate is the heart of the petrochemical sector. covering 862.613 hectares,with an investment of over US $2 billion. 88 companies invest in a range of activities. The petrochemical sector is dominant, with multinational production plants. Access to resources of natural gas has been a strong incentive for international manufacturers of ammonia, urea, methanol, other petrochemicals and steel.

Pessimistic developments follow mismanagement of loss-making assets in bloated bureaucracies languishing under state control. To end financial difficulties, the public must be offered the 51 percent of shares owned by the state, creating a shareholding democracy to boost Treasury coffers, now stripped in an orgy of scandalous waste on symbols, steelpans and signs, in a display of gesture politics to appease ideologues.

IMF advised phasing out subsidies, streamlining transfers to state-owned enterprises (SOEs), and improving efficiency and quality of public spending. The pace and composition of the adjustment should continue to support growth-friendly expenditure and protect essential capital spending. These would strengthen the fiscal position and maintain public debt well below the authorities’ soft debt target.