Shell begins gas production from Barracuda

Fri Jul 23 2021

Shell T&T yesterday announced that production has started from its East coast Barracuda project after achieving first gas on Sunday.

“This marks a significant milestone in the delivery of gas both domestically and internationally through Atlantic LNG,” Shell stated.

Maarten Wetselaar, director of Integrated Gas, Renewable and Energy Solutions, said the announcement “strengthens the resilience and competitiveness of Shell’s position in T&T.

“This is a key growth opportunity that supports our long-term strategy in the country as well as our global LNG growth ambitions.”

Project Barracuda, which is Block 5C in the East Coast Marine Area (ECMA) in T&T, is a backfill project with approximately 25,000 barrels of oil equivalent per day (boe/d) (140 mmscf/d) of sustained near-term gas production with peak production expected to be approximately 40,000 boe/d (220 mmscf/d).
Estimated production for Barracuda represents 100 per cent total gross figures. It is Shell’s first greenfield project in the country and one of its largest in T&T since the BG Group acquisition.

The Barracuda project comprises two subsea wells (both 100 per cent Shell owned), one in the Endeavour field and the other in the Bounty field. Both are tied back to Shell’s Dolphin platform.
These are two of the deepest development wells in T&T; Endeavour was drilled to a depth of 20,000 feet (6,096 metres) while Bounty was drilled to a depth of 16,000 feet (4,877 metres). Shell announced Final Investment Decision for Project Barracuda in January 2020

Shell now looks forward to the delivery of the four-well development project in Block 22 and NCMA 4, known as the Colibri project, s a joint venture with Heritage Petroleum Company Limited. First gas from Colibri is expected in 2022.

Shell is the majority shareholder in Atlantic LNG, a significant global producer of LNG.
Its equity in the Atlantic plant ranges from 46 per cent to 57.5 per cent in each of the four trains at the facility.

Eugene Okpere, Shell’s Senior VP and country chair said,
“We are immensely proud of our people and the remarkable work it took to achieve this milestone, particularly given that drilling began in May 2020 during the COVID-19 pandemic. Our execution strategy had to be completely overhauled to deliver our business plan, all while working remotely. It required tremendous resilience, adaptability and commitment. The ECMA is one of the most prolific gas-producing areas in T&T. As part of Shell’s development strategy, the company has sought ways to access the significant volumes that exist in the ECMA and to bring them online.”

Trinity Exploration & Production plc

Galeota Licence Update :-  New 25 year Licence, increase to 100% Working Interest and Significant Improvement in Terms

Trinity Exploration & Production plc (AIM: TRIN), the independent E&P company focused on Trinidad and Tobago, is today pleased to announce that a new Galeota Exploration and Production Licence (the “Galeota Licence” or the “Block”), on the East Coast of Trinidad, has been issued by the Ministry of Energy and Energy Industries (“MEEI”). Contemporaneously, Trinity has agreed new and improved commercial terms with its partner on the Block, Heritage Petroleum Company Limited (“Heritage”).

Highlights/Improved Commercial Terms

• New 25 year Licence commencing 14 July 2021 (initial six year term with 19 year extension in accordance with the Petroleum Act) coveringan area of 19,280 acres (7,802 hectares) with significantly reduced minimum work obligations and performance guarantees
• Heritage’s 35% working interest across the Galeota Licence has been converted to an overriding royalty (“ORR”):
• Previously Trinity held a 100% working interest (“WI”) only over the Trintes producing area and a 65% WI across the wider Block
• Trinity now has a 100% WI over the entire Block and can therefore recognise 100% of the reserves and resources across the entire Galeota Licence.
• As a consequence, management’s estimate of the Group’s Net 2C contingent resources are now 31.06 mmbbls (previously 23.25 mmbbls). Management’s estimate of the Group’s Net 2P reserves (as at the end of 2020) remains 19.55 mmbbls and so the Group’s overall Net 2P plus 2C volumes are therefore 50.61 mmbbls (previously 42.80 mmbbls).
• The conversion also results in a material reduction in ORR rates across both the producing Trintes field and the wider Block
• Moving to a 100% WI will also enable Trinity to apply the bulk of its substantial tax losses across the entire Galeota Licence, enabling them to be utilised more quickly
• New Crude Oil Sales Agreement (“COSA”) signed for the Galeota Licence, giving greater pricing clarity to Trinity and potential funding partners
• Improved Joint Operating Agreement (“JOA”) now more aligned to International JOA standards

Bruce Dingwall CBE, Executive Chairman of Trinity, commented: “Today’s announcement marks the start of the next phase of the Galeota Block development. The Galeota Block, which includes the current Trintes Field production, the Echo Field Development and the Foxtrot and Golf appraisal areas is a core asset of the Group. We are extremely pleased with the outcome of our constructive negotiations with the MEEI and Heritage. The improvements in the Licence and JOA terms support a return to sustained investment across the Block, to the mutual benefit of Trinity, Heritage and the Government of the Republic of Trinidad and Tobago (“GORTT”).

“The significantly improved ORR terms and new COSA provide Trinity and prospective funding partners with attractive commercial terms and the requisite visibility to bring on new low carbon development projects such as Echo, incentivising maximum resource extraction at a time of high oil prices and a transition towards lower carbon energy supplies.

“We appreciate the commitment of both the leadership team at Heritage and the proactive approach and support that we have received from the MEEI and we look forward to working with all stakeholders to optimise the significant mutual benefits of these new arrangements.”

Q2 2021 Operational Update

Strong production and financial resilience continue to underpin the Group’s pursuit of multiple initiatives to meaningfully scale the business

Trinity Exploration & Production plc (AIM: TRIN), the independent E&P company focused on Trinidad and Tobago, today provides an update on its operations for the three-month period ended 30 June 2021 (“Q2 2021” or “the period”).

Q2 2021 Summary

The Trinity operating model of a low cost break-even and a technically-led operating capability has resulted in continued strong production levels and operating cash generation, both of which underpin the Group’s strategic push to meaningfully scale the business.

Significantly, despite the Covid-related state of emergency in Trinidad, production levels remained resilient during Q2 2021 with production volumes averaging 3,047 bopd (Q1 2021: 3,107), yielding a H1 2021 average of 3,032 bopd. The Group’s unaudited cash balances remained robust at US$19.0 million as at 30 June 2021 (US$20.2 million (audited) as at 31 December 2020) as a result of strong operating cash generation (US$5.1 million).

The Company remains on track to meet its operating break-even target of below US$ 30/bbl for 2021. Average pre-hedge income operating break-even (revenues less royalties, opex and G&A) for H1 2021 was US$27.8/bbl (unaudited) (H1 2020: US$24.7/bbl (unaudited)). The increase in H1 2021 in part reflects additional costs associated with the Covid pandemic.

Outlook

The Company remains well placed to pursue multiple growth opportunities organically and inorganically across the energy spectrum due to its unique position in Trinidad, its well-established asset base and operating philosophy and the high quality partnerships that it has developed. Partnerships will continue to play an important part in enhancing our capabilities, reducing risk and increasing our ability to win mandates. Internally the exciting opportunities across both an expanded Onshore acreage and the Galeota Licence area (particularly the Echo development) continue to be advanced, with further developments on both fronts expected to be announced during H2 2021.

Bruce Dingwall CBE, Executive Chairman of Trinity, commented:   “The Board is extremely proud of the Trinity team for, once again, safely delivering a strong operational and financial performance despite the ongoing state of emergency in Trinidad. Strong base production and operating cash generation, and the maintenance of a robust balance sheet, are the foundations that continue to enable us to pursue the numerous initiatives underway to meaningfully scale the business. In addition, the capital reduction which we have recently effected will enable the Company to return value to shareholders via dividends and/or share buybacks as and when appropriate.

“As we look to the future with increasing confidence I must again thank our staff and business partners for their unstinting dedication to their responsibilities and to the supply chain and their employees for supporting our operations through the extraordinary period we are all living through.”

Q2 2021 Operational Highlights

• Broadly flat quarter-on-quarter production with Group average production volumes of 3,047 bopd for the second quarter (Q1 2021: 3,107 bopd) without any new wells being drilled and despite constrained operational conditions (COVID restrictions).
• H1 2021 average production volumes of 3,032 bopd represent a year-on-year decrease of 7.6% (H1 2020 3,282 bopd) which aligns to typical natural decline.
• Two recompletions (“RCPs”) (Q1 2021: 1) and 21 workovers (Q1 2020: 22) were completed during the period, with swabbing continuing across the onshore and west coast assets.
• Deployment of Supervisory, Control and Data Acquisition (“SCADA”) platforms with acceleration of roll-out now to be implemented in Q3 2021 following the arrival of 23 additional units in March 2021.
• Galeota Field Development Plan (FDP) submitted in May 2021, and new Licence expected to be signed imminently. Targeting Final Investment Decision (FID) by 2021 year end.
• Initial onshore 3D seismic interpretation encouraging with several, potentially meaningful, new plays and targets already identified.
• Production volumes for the remainder of 2021 will be dependent on several factors including general market conditions supporting the economic case for the resumption of drilling activity, as well as the high grading of high angle and horizontal wells within the drilling inventory.
• Even without a resumption of drilling in the near term, net average production for 2021 is still expected to be in the range of 2,900 – 3,100 bopd (before drilling of new wells) (2020: 3,226 bopd).

Q2 2021 Financial Highlights

• Average realisation of US$59.4/bbl for Q2 (Q1 2021: US$52.3/bbl) yielding a H1 2021 average of US$55.9/bbl (H1 2020: US$36.3/bbl).
• Cash balance of US$19.0 million (unaudited) as at 30 June 2021 (31 December 2020: US$20.2 million, audited). The H1 2020 cash balance includes:
  US$5.1 million operating cash flow.
  US$0.5 million other income (including net hedge income).
  US$4.0 million of capex including the Onshore Seismic acquisition, Galeota asset development, PS-4 acquisition and infrastructure investment.
  US$2.1 million taxes paid including offshore SPT of c.US$ 0.7 million for Q1 2021.
  US$0.8 million cash outflows related to annual insurance and licence obligations.
• The Company took advantage of the increase in oil prices to purchase two new hedging instruments during Q2 2021 offering downside protection for 15,000 barrels per month for H2 2021 and 12,500 bbls per month for 12M 2022.
• Post the quarter end, a further instrument was purchased, offering downside protection for an additional 15,000 bbls per month for H2 2022.
• Additional hedging instruments will be put in place as and when appropriate.
• Strong production levels combined with strict cost controls helped maintain an operating break-even of US$27.8/bbl (unaudited) for H1 2021, despite additional Covid related costs, versus US$24.7bbl (unaudited) for H1 2020. The Company remains on track to meet its target for average operating break-even (inclusive of hedging income) of below US$30.0/bbl for FY 2021.

Q2 Strategic Developments

During Q2 2021 Trinity renewed its LOAs for its WD-2, WD-5/6, WD-13 and WD-14 blocks for a 10 year period effective as of 1 January 2021. The combination of improved terms and longer tenure offer the potential to derive greater value from our existing licence areas.

The proposed acquisition of the PS-4 Block, announced in May 2021, will further enhance the Company’s onshore acreage, being contiguous to Trinity’s largest and most prolific onshore Block, WD-5/6. It offers significant opportunities to add reserves, resources and production on a meaningful scale. This is expected to complete early in Q3 2021.

During the period Trinity continued its 3D seismic interpretation (which covers the PS-4 Block as well as its existing onshore licence areas). The seismic re-mapping and integration of all historical wells and production data is enabling the Company to identify new exploration and appraisal prospects, update reserves, assist in identifying high angle and horizontal well opportunities and to explore the possibilities for enhanced oil recovery. Furthermore, the redefinition of basin fill and deformation (stratigraphy and structure) will enable the development of new plays and the redefinition of old plays on both a local and regional level providing the potential to build a differentiated onshore appraisal and exploration prospect inventory of real scale in the near term.

The Galeota asset development (offshore East Coast) also progresses, with the Field Development Plan (“FDP”) submitted to the Ministry of Energy and Energy Industries in May 2021. The execution of a new licence for Galeota is expected imminently, and work is ongoing on pre-Front End Engineering Design (“FEED”) studies and environmental approvals as we move towards FID at the earliest opportunity.

We continue to work in the Jubilee data room on the offshore West Coast opportunity and have also been short listed for the North West District (“NWD”) onshore exploration bid round from Heritage, the state oil company. We are continuing to jointly evaluate both of these opportunities alongside Cairn Energy plc.

The Company’s commitment to explore and develop new energy projects was further strengthened by the memorandum of understanding (“MOU”) with The University of the West Indies (“UWI”), St. Augustine – focused on building capacity in renewables while challenging and further reducing carbon output across the region. This remains an exciting potential area of growth for Trinity, with a number of avenues being explored with partners including the National Gas Company of Trinidad and Tobago and UWI with the potential to contribute towards energy transition in Trinidad and, potentially, in the wider Caribbean and Latin America.

Expanded Executive Management Team (“EMT”)

The EMT has been expanded with the promotion of two internal team leads. Denva Seepersad has assumed the role of Finance Director of the Group (which is not a plc Board position). Having been the Financial Controller for the last six years he benefits from an extremely deep knowledge of the business and the Trinidad commercial environment. The role of the Chief Financial Officer became untenable due to the travel restrictions for Edouard Brain and, as a result, he has left the Company. Dr Ryan Ramsook has also joined the EMT having been the Subsurface Team Lead for Trinity for the past three years. He has 16 years of relevant industry experience and is also a Senior Lecturer at UWI.

Capital Reorganisation

In addition to developing its portfolio of growth opportunities to enhance shareholder value, the Company also undertook a capital reorganisation with a view to enabling dividend payments and/or share buybacks to be effected as and when appropriate. The capital reduction was approved by the High Court on 13 July 2021, and the remaining formalities are expected to be concluded imminently.

Upcoming Results

The Company will announce its interim results for the six-month period ended 30 June 2021 in mid-September. This announcement will provide further detail on production, margins, operating break-even, costs and profitability – highlighting the growing value of the Company’s assets and continued strong financial performance.

For further information please visitwww.trinityexploration.com or contact as indicated below:=

June 27 2021

RNS ANNOUNCEMENT: This announcement contains inside information as stipulated under the UK version of the Market Abuse Regulation No 596/2014 which is part of English Law by virtue of the European (Withdrawal) Act 2018, as amended. On publication of this announcement via a Regulatory Information Service, this information is considered to be in the public domain. Trinity Exploration & Production plc (“Trinity” or “the Group” or “the Company”)

Court Approval of Capital Reduction

Trinity, the independent E&P company focused on Trinidad and Tobago, is pleased to announce that the proposed reduction of capital of the Company (the “Capital Reduction”), which was approved by the Company’s shareholders at its Annual General Meeting held on 18 June 2021, was sanctioned by the High Court of Justice in England and Wales (the “Court”) on 13 July 2021.

The order of the Court confirming the Capital Reduction, and the statement of capital approved by the Court in connection therewith, are being sent to the Registrar of Companies today. The Capital Reduction will become effective upon the registration of the order of the Court and accompanying statement of capital by the Registrar of Companies. As Companies House are not presently offering a same-day registration service due to COVID-19 restrictions, it is expected that the registration will be concluded within approximately 7 days of receipt of the documents by Companies House (based on the latest indicative timescales made known to the Company for the processing of such filings).

As set out in the Company’s announcement dated 26 May 2021, and in the Circular for the Annual General Meeting held on 18 June 2021, the Capital Reduction will result in the cancellation of the entire share premium account of the Company, as well as the cancellation of the entire deferred share capital of the Company.
The Company confirms that, following the Capital Reduction, the issued ordinary share capital of the Company remains at 38,879,431 ordinary shares of US$0.01 each (“Ordinary Shares”), with no Ordinary Shares held in treasury. The total number of voting rights in the Company also remains at 38,879,431.

Enquiries:

Trinity Exploration & Production
Bruce Dingwall CBE, Executive Chairman
Jeremy Bridglalsingh, Managing Director
Tracy Mackenzie, Corporate Development Manager
Tel: +44 (0)131 240 3860

SPARK Advisory Partners Limited (Nominated Adviser and
Financial Adviser)
Cenkos Securities PLC (Broker)
Walbrook PR Limited
trinityexploration@walbrookpr.com

Trinity is an independent production company focused solely on Trinidad and Tobago. Trinity operates producing and development assets both onshore and offshore, in the shallow water West and East Coasts of Trinidad. Trinity’s portfolio includes current production, significant near-term production growth opportunities from low risk developments and multiple exploration prospects with the potential to deliver meaningful reserves/resources growth. The Company operates all of its nine licences and, across all of the Group’s assets, management’s estimate of 2P reserves as at the end of 2020 was 19.55 mmbbls. Group 2C contingent resources are estimated to be 23.25 mmbbls. The Group’s overall 2P plus 2C volumes are therefore 42.80 mmbbls. Trinity is quoted on the AIM market of the London Stock Exchange under the ticker TRIN.

 

Touchstone Exploration Strides

ENERGY Minister Stuart Young welcomed progress being made by Touchstone Exploration Inc in its energy acreages during a visit to the Ortoire Block . Young accompanied a contingent from Touchstone and the ministry in undertaking a seismic survey on the block. He visited the Royston 1 Well, to be spudded later this month, Cascadura and Chinook discovery well sites and COHO gas field, which is expected to produce approximately 10 mmscf/d of natural gas to boost domestic gas supply to the National Gas Company from August.

Young expressed satisfaction in what he viewed. He promised the ministry will continue working with Touchstone.    “These are very exciting times with a lot of prospects and a lot of hope for success, especially on the gas side. The company is a critical factor in us going forward and providing gas production and showing it can be done. We are looking forward to great things from you all, and we are hoping in the next 12-16 months production will start to flow.”

In a statement Touchtone exploration manager, Xavier Moonan, said, “The Ortoire Block seismic survey is a key minimum work obligation and will be completed by July 31, 2021. This survey will tie perfectly into the drilling of Royston-1 exploration well. The survey will further enhance the understanding of additional exploration prospects identified, for example, Steelhead & Kraken, and will guide these drills in the second phase of exploration on Ortoire Block.”

Touchstone Exploration CEO Paul Baay said in the last two years the company has successfully drilled four explorations wells to the Herrera sands in the Ortoire Block and all were deemed discoveries.   “These are namely Coho-1, Cascadura- 1 ST1, Chinook-1 and Cascadura Deep-1. Touchstone has signed a key gas sales agreement with the NGC for the purchase of all gas produced from Ortoire Block. In the coming months Touchstone will bring online our first gas discovery – Coho – at approx 10mmscf/d. We are also working closely with stakeholders to complete the environmental impact assessment for the development of the Cascadura gas discoveries which can see a potential 200 mmscf/d liquids rich gas added onto national production, and we are currently completing our testing at Chinook-1 and expect such gas production to be added via pipeline back to the Cascadura facility.”

 

Atlantic LNG

Former energy minister Carolyn Seepersad-Bachan advised the Government to count its losses and move on, as it ponders the future of doomed Atlantic LNG Train 1.

“That LNG train has come to an end. You can’t do anything about this. That money is lost. It’s a total loss. It is a sunk cost. You cannot throw more money after a bad investment,” she said, referring to the millions spent by minority shareholder National Gas Company (NGC) as it hopes to find cheap gas markets to supply the train, idled since November 2020 because of unavailability of natural gas.

Seepersad-Bachan said the writing has been on the wall “that we would not be able to sustain LNG, not only in terms of supply but because of the pricing. I am not surprised. The writing was on the wall all the time. The majority shareholders – (bpTT 34 per cent, Shell 46 per cent) – refused to invest because they do not see in the future the economic viability of that train going forward.”

Four gas master plans confirmed the need to move away from LNG, hence the reasons under her tenure with the People’s Partnership regime for a new direction for the energy sector in terms of gas allocation. The plan was to use less gas to produce more output in the downstream petrochemical sector and to use or sustain the higher prices of natural gas and still be profitable.

As the world turns to renewable energy, she warned against trying to reinvigorate a disappearing economy by using old strategies but TT canget on board or slide further down the competitive index.

“There is a new economy that is emerging globally and we are not preparing ourselves to take part in that new economy, in terms of efficiency, a new direction. I have been making the point from day one that the time will come … to put a new direction in the energy sector. All this pandemic did for us was to accelerate that future.”

Pointe-a-Pierre MP David Lee said the revelation that the National Gas Company (NGC) (a minority shareholder) reportedly spent $250 million on the turnaround on a plant to be mothballed is another damning wound to the already struggling economy.

“We call on the Government to tell us if this million-dollar turnaround was an act to deceive the population and cover up that yet another plant had been crippled due to their mismanagement of the natural gas sector.”

Given the dire economic times facing our citizens, Government must tell the nation who authorized the NGC to spend taxpayers money when they knew fully well the prevailing gas shortage would hinder the plant, especially when NGC is recording billion-dollar losses.

Energy Minister Stuart Young said discussions with shareholders are at a very sensitive stage.

“We are in a global environment and we continue to be in very serious discussions with all of the shareholders of Atlantic LNG, and at an appropriate time announcements will be made. We have been playing our cards and moving chess pieces very, very carefully. Now is not the time to disrupt that.”

The former president of Point Fortin Chamber said the situation with Train 1, imposed on top of Covid19 restrictions, extends distress for residents. When the world is looking at renewable sources of energy and with gas not available, Government has to be more transparent and held accountable.

“Now is not the time to be playing around with markets and prices since there are cheaper sources available worldwide from newer plants.”

The Ministry of Energy and Energy Industries responded to reports that Atlantic LNG Train 1 is to be de-commissioned, saying that the future of the company has been discussed with all stakeholders for months. Unavailability of gas to supply the train is at the centre of the decision to have it mothballed. Discussions have been ongoing and are at a very sensitive stage.

“The Government and the National Gas Company of Trinidad and Tobago (NGC) have ensured that Atlantic is preserved in the best position to allow all options with respect to its future to be available whilst these discussions are ongoing.”

The statement defended NGC amidst reports that it was the only stakeholder investing millions to keep the plant running as it sourced a reliable supply, while other major stakeholders – Royal Dutch Shell and bpTT – failed to give it a lifeline.

“At all times NGC has acted to protect the rights and position of the Citizens of TT.”

The ministry committed to working assiduously to ensure the future supply of gas in a changing global environment, pointing to the visit of Minister Stuart Young to Touchstone projects expected to bring significant gas to market, discussions he led with BHP on the future of gas supply for the deep-water Calypso gas project and with Shell on the production sharing contract for significant gas supply from Manatee.

“It is also noteworthy that BPTT’s Cassia C platform has arrived in TT, this will add to current gas production and is a direct result of the Government’s negotiations with BPTT in 2018. The Government continues to put focused effort into, amongst other things, securing future gas supply, better terms for TT and a more efficient and cleaner energy environment. Be assured that the Government will continue to keep the population properly informed as and when it can, with an understanding of the sensitive nature of on-going discussions with respect to the energy sector in TT.”

NGC accounts for $2.1 billion loss

For The Summary Consolidated Financial Statements for Year Ended 31 December 2020 Please follow the link below :-

https://media.ngc.co.tt/wp-content/uploads/2021/06/2021-06-23_financial-statements_year-ended-dec-2020.pdf

[Please note that the  Format uses Frames, which  older browsers may not be able to access]

THE National Gas Company (NGC) identified contracts, infrastructure and claims amongst the exceptional charges which contributed to its recording a $2.1 billion for the financial year ending December 31, 2020. The loss represented a $2.6 billion charge from a restated profit of $0.5 billion for the 2019 financial year.

The group’s financial performance last year was adversely affected by exceptional charges of $4.2 billion arising from onerous contracts ($2.1 billion), impairment of infrastructure ($1.6 billion) and claims ($0.5 billion).

With respect to contracts, the NGC said, “A charge of $2.1 billion was recorded in 2020 for a gas supply contract in which the cost of fulfilling the contract is greater than the returns to be derived.” NGC has a provision of $4.5 billion for onerous contracts.

NGC reviewed its gas supply infrastructure and identified significant capacity under-utilisation, which is not expected to change based on the current outlook.

“Consequently gas infrastructure was impaired by $3.2 billion of which $1.6 billion was charged to profit and loss account for economic obsolescence.”

NGC last year received several claims from customers due to gas curtailment issues.

“The expected cost to settle claims was reassessed in 2020 and arising from this assessment, the company increased its provision by $0.5 billion with a total expected liability of $1.2 billion now recorded in balance sheet.”

NGC continues to subsidise natural gas to the Trinidad and Tobago Electricity Commission (T&TEC) for the provision of electricity.

“For 2020, this amounted to $0.5 billion whilst receiving no payments.”

At the end of last year, the receivables from T&TEC totalled $2 billion, “with a further $3.7 billion in loans outstanding.”

NGC $191m profit in Q1
NGC chairman Conrad Enill announced an unaudited after-tax profit of $191 million for the first quarter of this year, in his report that accompanied the NGC’s summary consolidated financial statements for the three months ended March 31, 2021. The turnaround follows NGC report of a $2.1 billion loss for 2020.
This unaudited after-tax profit is higher than the $31 million reported by the NGC Group for the same period last year.

“Group revenues of $4.5 billion were $1.3 billion greater than revenues of $3.2 billion for the comparative period 2020.

The rebound in commodity prices positively impacted revenues and profit. Parent company NGC executed a new gas supply contract with Tringen while negotiations continued with Methanol Holdings (Trinidad) Ltd towards execution of a long term gas sales contract.

Ruby field, in which NGC holds a 31.5 per cent interest, began production in May, six months ahead of schedule. Enill observed this “would certainly support stabilisation of supply over the next few years.”

This year the NGC Group continued its focus on the core objective of ensuring sustainability over the long term. “The sustainability plan is anchored in the following key deliverables securing our current business, transforming the organisation for the changing future, growing the business locally and internationally and strengthening our national contribution.”

Between 2016 and 2020, NGC built a solid foundation in areas such as safety, governance, project management and people development, with a strategic focus on value leakage and value creation “supported with strategies in technology, growth, human resources and sustainable development.”

In balancing global demands for boosting energy from existing sources and an increasing mix of clean energy, Enill said NGC and its subsidiaries are implementing projects that support these objectives.

He listed green hydrogen production, use of solar power and electric car charging stations at its Preysal flagship CNG station and the use of drone, satellite and infra-red technology to detect methane emissions as some of these projects.

NGC has been accepted at the Oil Methane and Gas Partnership (OMGP), a comprehensive, measurement-based methane reporting framework that standardises rigorous and transparent emissions accounting practices. NGC will continue to seek opportunities to derive value along the gas value chain where natural gas can be used as a bridging fuel and where renewables and energy efficiency will play a greater role.

NGC is positioned as an integrated energy company, which will seek to obtain greater value along the gas value chain, is also seeking synergies within the group and forging partnerships in the local, regional and international energy arena.

During the covid19 pandemic, NGC has been able to successfully transition to work from home arrangements in accordance with the public health regulations. Most of NGC’s employees have been working from home while its operations’ employees “continue to adapt to new conditions with changes in shift crews.”

Enill praised NGC workers for their resilience and adaptability during the pandemic “in not only keeping the business running but working innovatively and virtually under unusual circumstances. In last week’s report, the NGC identified contracts, infrastructure and claims among the exceptional charges which contributed to its recording the $2.1 billion loss for 2020.

Former minister in the ministry of finance Vasant Bharath blamed Government for the colossal $2.1 billion loss. Government “continually ignored the advice to re-look at the gas value chain as cheaper shale became more available, the US became net exporters of natural gas, prices paid by NGC (negotiated by the PM and his team) to the upstreamers were higher and unworkable and curtailment issues faced local producers.”

Former ministers Kevin Ramnarine and Mariano Browne were also not surprised by the massive loss.

Ramnarine said, “Market conditions in 2020 were not favourable to the NGC.” Low ammonia and methanol prices in the sub US$200 per tonne range prevailed for most of last year “and would have impacted the price it (NGC) realises, for most of the natural gas it sells is indexed to ammonia and methanol prices.” Apart from that, Ramnarine said, “I expect that the quantum of natural gas sales would have fallen. So they had less gas to sell and that gas realised a lower price.”

Ramnarine was optimistic that with increased natural gas production in 2022, NGC’s overall sales volumes will increase. He recalled in 2013 efforts were made to widen the NGC’s asset and revenue base with the acquisition of Total’s shares in Blocks 2c and Block 3a. Ramnarine was happy that NGC continues to benefit from that decision.

Browne said, “It just simply points out that the difficulty in the energy sector is not simply related to covid. There are other issues which are not yet dealt with.” One of those issues is the price of gas sold to NGC by upstream producers and the price of gas that NGC supplies to the petrochemical sector. Petrochemical plants that were closed during the pandemic would also have affected NGC’S revenue.

“NGC will continue to be a stable entity, in so far as approximately 60 per cent of gas still goes towards LNG (liquefied natural gas) and they have long-term contracts in that regard.”

Observers advises divestment of energy assets to electrify private enterprise to create wealth from savings languishing in banks and build a shareholding democracy to end austerity after the slump. This will rally recovery, spark optimism and restore momentum as jobs follow investors regaining a sense of belonging. Divestment of all state assets and diversion of assets from unethical tobacco and alcohol to food production will fund healthcare and reduce NCD, infection and contagion.

 

Trinidad Petroleum Holdings Ltd

TPHL deadline for proposals for refinery is July 23

16 July

TPHL began accepting proposals for the refinery through Scotiabank on June 28. Deadline for proposals/bids is July 23.

TPHL started “a broad-based process for a transaction involving refining assets of The Guaracara Refining Company Ltd and the restart of the refinery. “Scotia Capital (USA) Inc. (Scotiabank) has been retained by TPHL as its exclusive financial advisor in connection with the potential transaction.”

Those interested are asked to send an e-mail to       process.tphl@scotiabank.com.

Patriotic Energies and Technologies Ltd submitted a proposal sometime over the weekend of June 19.

In Parliament on June 23, the Prime Minister said, “To the extent that the union has another proposal to put in an invitation that is due to go out in a day or two, that proposal is not before the Cabinet at this time, because the invitation has not yet gone out.”

Patiotic chair Ancel Roget told a press conference the company had indeed submitted a proposal. Patriotic had three proposals rejected thus far. Asked if TPHL is solely collecting applications and sending them to the Cabinet sub-committee TPHL said “It’s all (on) Scotia.”

A release said, “Interested parties or consortia who possess the requisite expertise will be provided with an initial marketing document and be able to participate in the process upon the execution of a legally binding non-disclosure agreement. TPHL cautions that there can be no assurance that any transaction will be consummated. At this time, TPHL does not intend to disclose any further developments relating to the process unless and until the board of directors of TPHL has approved a definitive agreement for such transaction or has decided to terminate the process.”

 

Challenger Energy – Saffron update and funding term sheet

14 Jul 2021

Challenger Energy, the Caribbean and Atlantic margin focused oil and gas company, with production, appraisal, development and exploration assets across the region, has provided an update in relation to the logging of the Saffron-2 appraisal well as part of the broader Saffron project in the South-West Peninsula of Trinidad, and the entry into an associated term sheet for a potential Convertible Loan Note funding of up to US$17.5 million, to fund the future development of the Saffron project.

Highlights

• Logging of the Saffron-2 well has been completed. In total, approximately 1,400ft of reservoir sands have been intersected across the Upper, Middle and Lower Cruse formations. Based upon assessed net to gross measurements (NTG) this yields over 300ft of net oil-bearing reservoir sands (net pay)
• Across the Lower Cruse formation (the primary reservoir of interest based upon the Saffron-1 discovery well and the final reservoir unit to be drilled out) 63ft of net oil-bearing reservoir sands (net pay) has been measured, with a further 70ft of potential net oil-bearing reservoir sands indicated
• The drill rig has been released, well completion activities are underway, and perforation / production testing of the well is on track to commence on or around 23 July 2021.
• Based upon the Saffron-1 discovery well, the prognosed production rate from Saffron-2 is in the range of 200 – 300 bopd
• There has been continued progress with respect to securing additional sources of funding for development of the Company’s assets.
• In particular, a Term Sheet was entered into in June 2021 with Arena Investors LP for a potential Convertible Loan Note funding of US$10 million (and up to US$17.5 million) which, if concluded, would provide funds for drilling of future production wells as part of the first phase of a development of the Saffron project

Eytan Uliel, Chief Executive Officer, commented:

‘I am pleased to advise that logging of Saffron-2 – the first well drilled by Challenger Energy onshore Trinidad – has been completed, with oil-bearing sands identified in all reservoir sections of interest, consistent with pre-drill estimates and those indicated from the Saffron-1 discovery well. We now head toward production testing later this month, and once Saffron-2 is online and a degree of production history is established, we can then work with the authorities in Trinidad to plan how best to execute a broader development of the Saffron field.

In terms of funding, known production capacity translates to de-risked cashflow potential that can sustain less dilutive sources of capital. In this regard, we are pleased to have taken the first tangible steps, by entering into a term sheet with a leading provider of debt and hybrid-debt capital to energy companies. We are working to conclude a funding on mutually acceptable terms, with a view to having capital available once we have production data from the Saffron-2 well and have been able to assess development options and schedule for a broader Saffron development. I look forward to updating shareholders of our progress.’

Saffron-2 Appraisal Well Drilling Update

The Saffron-2 well has been successfully drilled to a depth of 4,567ft and logged with a full formation evaluation suite. All well sections have now been cased and cemented ready for a production completion to be installed, subsequent production testing, and longer-term future production.

The well, in the South-West Peninsula of Trinidad is a twin of the Saffron-1 well, and encountered similar Upper, Middle and Lower Cruse reservoirs to Saffron-1. The expectation (based upon the Saffron-1 discovery well) is of production rates in the range of 200 – 300 bopd. Challenger Energy has a 100% operating interest in the well and the broader Saffron project.

Initial results of the log interpretation have identified over 1,400ft of gross reservoir sands, with in excess of 300ft of net oil-bearing reservoir sands (net pay), as follows:

1. Upper Cruse – 131ft of reservoir sand and 27ft of net pay (20% NTG)
2. Middle Cruse – 1,066ft of reservoir sand and 217ft of net pay (20% NTG)
3. Lower Cruse – 223ft of reservoir sand and minimum 63ft net pay (28% NTG), with a potential further 70ft net pay (60% NTG) indicated

Following logging the drill rig was released off hire and is demobilising from site. All other service providers have departed and all SOBM (synthetic oil-based mud) has been safely removed from site and returned to the vendor.

Operations are now focussed on the installation of equipment to ready the well for production testing. The Challenger #1 workover rig is mobilising to site in order to run perforating guns to penetrate each of the potential oil-bearing horizons and install the completion string. Requisite surface equipment (pipes, valves, tanks) has been purchased and is simultaneously mobilising to site to be ready for hook-up as soon as the completion operations have concluded.

Production testing is expected to commence on or around 23 July 2021.

Term Sheet for Convertible Loan Notes

Further to the Company Update of 29 June 2021, the Company has continued to make good progress on securing additional sources of funding, in particular in relation to a potential Saffron development.

In response to recent speculation, the Company is pleased to advise that it signed a term sheet in June 2021 (the ‘Term Sheet’) with Arena Investors, LP (‘Arena’) for a Convertible Loan Note funding of US$10 million (and up to US$17.5 million) (‘Loan Notes’). If concluded, this will provide funding capacity for ongoing development of the Company’s projects, including in particular the drilling of an additional three production wells as part of the initial phase of development of the Saffron project.

Arena is a global investment firm with principal offices in New York and London and ~US$2.2 billion of capital under management. Arena has a resources finance platform that originates and invests in secured, reserve-based loans for middle-market oil and natural gas exploration and production companies, generally focussed on debt investment opportunities that do not typically attract the attention of conventional bank or commercial finance lenders.

The key terms of the Loan Notes as contemplated in the Term Sheet include:

• Facility structure: Fixed-price convertible loan
• Face value: US$18.9 million
• Issue discount: 92.5% of face value (US$17.5 million net proceeds)
• Tranche 1: US$10.8 million face value, drawn-down immediately (US$10.0 million net proceeds)
• Tranche 2: US$8.1 million face value (US$7.5 million net proceeds), drawable upon the Company achieving certain agreed operational milestones
• Use of proceeds: Tranche 1 would fund development drilling, including in particular three Saffron production wells as part of the initial phase of development of the Saffron project, as well as repayment of and cancellation of any existing conditional convertible notes outstanding. Tranche 2 would allow the company to drill further Saffron production wells and/or further production wells in the broader Challenger asset portfolio
• Coupon: 12% per annum, payable quarterly – 5% payable in cash and 7% payable in kind
• Term: principal due after two years, unless converted prior
• Conversion option: may be converted by Arena, in whole or in part, at any time during the term
• Conversion price: 4.2p per share
• Security: first priority mortgage lien and priority security interest on all of the tangible and intangible assets of the Company
• Financial covenants: none
• Fees: 3%, and warrants over 20% of the face value, exercisable for 36 months at 4.83p per share

In accordance with the Term Sheet, the Company and Arena are working collaboratively to seek to agree and enter into definitive legal documentation, with the Term Sheet having provided an exclusivity period until 30 July 2021 for this purpose. The Term Sheet is non-binding and is subject to normal pre-conditions for transactions of this kind, including completion of satisfactory due diligence by Arena, and therefore there can be no assurances that the Company and Arena will enter into definitive documentation.

The Company’s intent is to have funding in place immediately following the completion of production testing of the Saffron-2 well, so as to enable the expedient development of the Saffron field.

Development of Saffron

Subject to successful production testing of Saffron-2, and subject to approval of a requisite development plan by the authorities in Trinidad, the Company will seek to develop the Saffron field in a phased approach. The initial phase will involve drilling between five to nine production wells at an estimated capital cost of US$12 – US$20 million, the pace of which will largely depend on permitting and rig availability. This initial program of activity is projected to achieve an average daily production of 1,000 – 1,500 bopd which, based on a US$60/bbl oil price, could generate annualised net operating cashflows of up to US$12 million going forward.

Thereafter, the current anticipated full-field development for the Saffron project could ultimately comprise up to 30 wells in total, with a projected peak production of approximately 4,000 bopd, potential generating annualised net operating cashflows of up to US$25 million. Following a successful first phase of development of the Saffron project, the Company expects that it will be able to fund the balance of the overall field development from ongoing cash flow generated from Saffron field production. Accordingly, the facility contemplated under the Term Sheet is expected to be sufficient to fund the first phase of development of the Saffron project.

Source: Challenger Energy

Challenger Energy announces further Saffron-2 well update

28 Jul 2021

AIM-listed Challenger Energy, the Caribbean and Atlantic margin focused oil and gas company, with production, appraisal, development and exploration assets across the region, has provided the following update in relation to production testing of the Saffron-2 appraisal well.

As previously advised, the Saffron-2 appraisal well (Challenger Energy 100% operating interest) was successfully drilled to a depth of 4,567ft encountering similar Upper, Middle and Lower Cruse reservoirs to those encountered by the Saffron-1 exploration well. Since the last announcement of 14 July 2021, the drilling rig has been fully demobilised, to be replaced at site by a Challenger Energy workover rig along with production tanks and major production equipment. Following inspection and subsequent formal approval of both the well completion and production facilities by the Ministry of Energy and Energy Industries (MEEI), approx. 130ft of potential reservoir sands in the Lower Cruse sections of the well was perforated, to enable production testing from these zones to commence.

Currently drilling materials and fluids are being recovered from the well, which is expected to continue for several days. Once the well has been fully ‘cleaned-up’, pressures, oil and fluid types, and production rates from the Lower Cruse zones of the well can be ascertained – an important part of the process as this reservoir has not previously been tested/ produced. Thereafter, the other 200ft of net pay identified in the Upper and Middle Cruse zones will be perforated and tested, to give a full assessment of the well’s production potential. Further announcements will be made as appropriate.

Eytan Uliel, Chief Executive Officer, commented:

‘The objective of the Safffron-2 well is to understand the production potential from the various reservoir units identified by both the Saffron-1 and Saffron-2 wells, starting with the Lower Cruse intervals. I am pleased to advise the first stage of production testing at the Saffron-2 well has commenced, with well bore clean-up operations underway. We will provide a further update once we have an indication of production potential.’

Original article link

Source: Challenger Energy

 

 

Pulse of the Economy

Jul 19 2021

Saddled with its state stakeholder, whose weight is hobbling energy development, petroleum producer Trinidad & Tobago no longer savours exceptionalism. Opposition Leader Kamla Persad-Bissessar says that the economy is in a tailspin and the administration has not shared plans with the public on the issue. Venezuelans who fled their homeland to seek a better place are returning to take their chances under the Maduro regime as they see what happened in Venezuela under a dictatorial regime also happening in T&T. Venezuelans told the UNC they could not get jobs and food here and choose to return.

“Many of them tell us they’re seeing happening here, what happened in their own land with a dictatorial regime which destroyed a major oil and gas economy there. They say (Rowley) did the same things Maduro did to Venezuela.”

T&T’s oil and gas sectors were destroyed. Petrotrin was a scrap yard, Pt Fortin and Santa Flora ghost towns and Pt Lisas is the next junkyard in the making due to PNM’s failed policies. Persad-Bissessar said foreign direct investment is leaving T&T which has the worst regional outlook.

“The country’s in an economic pandemic under this Government,” she said, noting the recent Guardian report on expected mothballing of Atlantic LNG Train 1.  “Greater than this, the impact will be catastrophic for the economy. The flagship company NGC will not be able to withstand this financial shock.”

She reiterated her call for a change of the ‘failed’ Health team because of the COVID death toll nearing 1,000.  “If 900 people died from crime, would Gary Griffith still have a job? So why do we still have this failed Health team?”

UNC deputy leader Jearlean John, also focused on the “NGC $250m blunder” story.  She said, ‘’T&T, which in 2015 when the present government took the reigns of power, stood tall as the world’s largest exporter of methanol and ammonia, has now lost over half its total methanol production and a significant amount of its ammonia output.”

She cited issues in the NGC matter, adding that the current natural gas shortages are directly attributable to the PNM’s failure to engage stakeholders and multinationals in new successful bid rounds.

“Any new gas from 2012 to today is as a direct result of the PP administration. They’ve done nothing to increase the uptick in gas production. It gets even worse – the Train 1 debacle.’’

“Why did NGC undertake a complete refurbishment cost of $250m cost for Train One, where no gas was committed to keep it running and where they only have a 10 per cent stake in Train One? The hapless Energy Minister is saying negotiations are still ongoing – with whom?”

“NGC chairman Conrad Enill advised us to ‘ask the Cabinet’. Clearly, Enill is pointing to the persons who have instructed NGC to throw money down the drain. So who gave NGC instructions to invest in a project with an upstreamer to the tune of US$45M. Who is running the commercial considerations in NGC? I really want to know who is being held accountable?”

John, who said there was no way forward for Train 1 based on T&T’s gas supply, asked what was going on with the Loran-Manatee project.

“Can they confirm that they’re in negotiations with Shell to give revised terms that are more favourable – at what cost to the taxpayers?”

UNC MP Rodney Charles who said T&T faced a collapse of the energy sector with Train 1, added “T&T gone through. Hapless Venezuelans who fled that country running back home.”

Put NP on stock exchange instead of selling assets, liberalising fuel

Neil Gosine, former chairman of National Petroleum said the Government plan to sell NP’s prized assets is a misconceived scheme and the fuel-liberalisation plan is ill-timed. The combination of selling the company’s largest asset base and liberalising the fuel industry will have a ripple effect on the cost of transporting goods and services that may lead to inflation. He foresees the privatisation of the company-owned sites opening up possibilities for the formation of cartels on the retail side of the business.

“After Finance Minister Colm Imbert and Energy Minister Stuart Young are finished with NP, the entity as we know it will be decimated, leaving all the employees, dependent companies and thousands of people that depend on its operations at risk, with no future and most definitely on the breadline.

“It will be left in a worse-off state than Petrotrin is currently in,” Gosein said from a United National Congress (UNC) Virtual Report platform.

“The National Petroleum Marketing Company’s business model is not the distribution of fuel any more, that’s possibly a misconception by the new Energy Minister. It is actually the franchise agreements with the petroleum dealers that is the sustainable part of NP’s business and what makes NP any money at all in their current market.”

Managing service stations accounts for 70 per cent of NP’s business.

“There are 113 stations, of which 75 are company-owned. Dealers own the rest. The estimated value of the service stations owned by NP is approximately $1 billion, with approximately each one costing $5 million-$15 million, depending on volumes of fuels sold at each station and its location.”

NP service stations are in prime locations and he questioned the wisdom of giving private interests huge state assets when prices are at their lowest. The privatisation of service stations and selling off its assets puts the company and its future in jeopardy without any thought for the employees and their families or businesses that depend on NP’s operations. He pointed to the actual franchisee agreements, which include the rent and management of the service stations and the money derived from that aspect of the business. Many service stations offer rental spaces for lotto machines, convenience stores and food outlets.

“So the Government’s…new idea to raise money by selling out NP’s prize assets, which are its prime properties, with gas stations around the twin islands, is a misconceived scheme, to say the least.”

On the proposal to liberalise the fuel industry, Gosine said with the closure of Petrotrin, refineries around the world refuse to offer Paria Fuel, which has emerged as the company to purchase fuel, competitive credit facilities, as it is a relatively new company and has no experience on the market.

“This put our ability to purchase fuel at a disadvantage, as Paria now has to purchase from traders who at times will have fuel and are looking for the best prices to sell their products. This means much higher pricing at the pumps once the liberalisation of fuel is implemented by the Finance Minister. The liberalisation can effectively be another form of taxation to impose on the already burdened taxpayer and there is no way to protect the public from overpricing at the pump and a cartel arrangement from gas station dealers.”

He suggested a more viable option might be to put the company on the local stock market and allow every citizen a chance to own piece of NP, with shareholdings in the company.

“It is part of our legacy and energy heritage and a company that has been profitable in the past and can be again, under the right management. “

 

Fuel market liberalisation

14 jul   SHIVANI MAHASE

Budget 2020/21 was based on an estimated oil price of US$45 per barrel and gas price of US$3/MMBtu, with a fiscal deficit of 5.6 per cent of GDP. The theme was Resetting the Economy for Growth and Innovation, whereby a key intervention was liberalising the domestic fuel market, in view of estimated international oil prices. This arrangement will eradicate the fixed retail margins for liquid petroleum products, enabling petroleum retailers and dealers to set their own margins.

Generally, prices at the pump-protected by the Energy Ministry have been lower than international market prices. Low prices have been subsidised by petroleum companies and the State. Now, this new deregulated market will end 46 years of fuel subsidies, with a high social expenditure of $25 billon in the last 15 years.

Fuel subsidies represent a fiscal loss to the economy through this burden-sharing mechanism, as government’s proportion of financing the fuel subsidy rose in later years with a peak in 2012 of arrears of $7.1 billion (4.3 per cent of GDP). Consequently, Petrotrin suspended tax payments until the majority of subsidy arrears was financed via budget allocations. This correlates with the statement in the budget where “usage was inefficient from an economy-wide perspective,” as it represents an inefficient allocation of government’s finances.

To further reinforce liberalising the domestic fuel market, fuel subsidies challenge the Heritage and Stabilisation Fund, a key pillar of government’s long-term fiscal blueprint . HSF objectives are bolstering fiscal discipline, ensuring available funds for future generations and steadying impacts of commodity price volatility. However, the fuel subsidy diminishes fiscal discipline and stimulates the urge to consume resources rather than save for future generations.

When the price of oil was high, governments spent more on fuel subsidies and contributed less to the HSF. The IMF states that total subsidy benefits were approximately $12,000 and $24,000 a year for the lowest-income and highest-income groups, respectively. This verified the inequity created owing to fuel subsidies.

According to the IMF, in 2015 TT ranked 12th as one of the chief subsidisers in the world for vehicle-related externalities such as congestions, accidents and road damage, with accidents being most significant. Therefore, liberalisation of the fuel market is a practical incentive for diminishing congestion and other traffic-related externalities, as well as contribution to global warming.

The IMF estimated the elasticities of fuel prices projected a 29.7 per cent decline in aggregate fuel demand from the elimination of fuel subsidies, contributing to a decline of US$178 million in accidents, road damage costs and congestions.

Another merit of fuel market liberalisation is the potential to use fuel taxes as a predictable source of governmental revenue. The Government can enforce a reasonable and fair tax based on individual consumption levels of fuel. Though such tax may be minute, as the majority of the population are fuel consumers the tax may prove to rake in a significant portion of revenue.

This revenue can be reinvested in various sectors such as developing a digitalised economy through investments in new tech businesses, engagement in technology solutions and digitalisation and creation of tech employment to facilitate paperless eco-system environments for public and private partnerships in the construction, manufacturing and agricultural sectors.

As of 2020, according to the Central Bank, net public sector debt to GDP ratio was 82.7 per cent. The saved finances from the removal of the fuel subsidy can be allocated towards debt reduction to make TT financially safer regarding international investment opportunities, and protect against inflation and potential banking/currency crises in the future.

The main advantage of fuel subsidies lay in cheap transport and electricity which propelled economic development through food production, utilities, health, education, research, trade, industry, business, security, housing, sport and tourism.

 

Trinidad Truth

The time has come to make peace with the past and change the narrative. The bellicose blame game over responsibility for ongoing energy sector woes is a waste of precious resources and time. The focus should be on conversion to clean energy, diversification of the economy and transparency in public life.

As Government and Opposition members traded barbs over losses at NGC, the Energy Minister said a UNC government struck a “disaster of a deal” in 2015. However, the Opposition said the problem was not what occurred in 2015 but rather 2017, when the current Government renegotiated it.

Politicians squabbled over another energy case, the defunct Petrotrin oil refinery and disturbing “fake oil” claims against dismissed operator, A&V Oil. Some posed the outcome of arbitration proceedings questioned the judgment of Opposition Leader Kamla Persad-Bissessar, who had highlighted audit reports, including reports by the State. Others queried the Government management of secret arbitration proceedings. The Prime Minister distanced himself, saying it was entirely a matter for the Petrotrin board, not the Executive.

Citizens are no closer to the truth, elusive amid the sound and fury. To date, no real answers exist over concerns that claims made to Petrotrin had been inflated or that the State acted recklessly. Nobody saw deals made by NGC in 2015 or 2017 and knew which side is correct. Tit-for-tat exchanges and selective release of information undermine transparency,

Practices such as confidentiality clauses, non-disclosure agreements and secret arbitration flourish in the critical energy sector consume public resources to keep projects, entities and facilities afloat.

The Prime Minister, opening a controversial gas-to-liquids plant in Pointe-a-Pierre earlier this year, acknowledged its “long, tumultuous” history, straddling governments and Petrotrin boards which involved yet another secret arbitration which Petrotrin won. The gas-to-liquids plant was expected to result in $2 billion in revenue for the treasury, No findings have been released in relation to an explosion that rocked the plant in April. Crucial plans in the state energy sector including green energy growth and the transition from hydrocarbon dependency are covert, amid fears of ebbing discipline and a rash of negative news.

Jul 12 2021

Addressing “The PNM’s (People National Movement’s) destruction of the energy sector.” the Opposition  warned the Prime Minister, “You will be held to account for the financial losses of the National Gas Company… for the investment of close to US$300 million in Train One with no returns and with no possibility in sight of Train One coming back on stream. … you will not be given any break by the people as you seek to impose more pain, more suffering, more hardship, more brutality, as you seek to impose new prices for gasoline whether it is premium, super, or diesel.”

“And there will be no break for you .. as it relates to this decision in April 2019, to grant a bunkering and marketing license to a company called RH Gas Energy Limited. You will have to account to this country as to the .. reasons behind giving a fly by night company formed in June 2018, some six months before the closure.. of Petrotrin, how this company was granted within less than one year a bunkering and marketing license.”

In May, Senior Counsel Gilbert Peterson, one of RH Gas Energy Ltd’s directors, said everything was above board and that there was no favouritism in the award of the licence.
He scorned the suspicion of any connection between closure of Petrotrin and the formation of RH Gas Energy Ltd. RH Gas had been registered for some time but only managed to secure some business in January this year.

“Sorry.. but what RH Gas is doing has nothing to do with Petrotrin.”

Blaming the Government for the $2.1 billion loss reported by NGC the Opposition claimed it was due to poor negotiations in Texas. NGC could only afford US43.10 per MMBtu, but government offered US$3.50.
Energy Minister Stuart Young responded “I never watch anything that the UNC has. Wade Mark is not someone that has any knowledge .. of the energy sector and isn’t someone to be taken seriously. As has been stated numerous times before, including by me, in the Senate … the gas prices that were negotiated, and agreed to by the NGC in 2017, were subsequently re-negotiated due to further market changes. So as usual, the UNC who decimated the energy sector between 2010-2015 are attempting to mislead the population.”

“The Government and NGC are currently negotiating future gas projects, not past Gas Sales Contracts. The UNC failed to negotiate any future gas production and contracts which is a main factor that led to NGC losses and claims against the NGC. Had the UNC negotiated future gas and gas prices for NGC the country’s energy sector would have been in a better place post-September 2015. Everything the UNC did in energy sector in 2010 to 2015 had a negative effect on Trinidad and Tobago especially with respect to the revenue earned for T&T.”

bpTT   expects major gas shortfall

Jul 27 2021

bpTT sustained significant losses over the last five years, including a $2.825 billion before tax last year.

While Matapal and Cassia C will boost production by about 140 million standard cubic feet per day (mmscf/d) of gas, this will still fall short by an average of over 200 mmscf/d, enough gas to run two methanol plants and more than 60 per cent of all the gas the country needs for electricity generation. Controversially, Government spent quarter of a billion dollars to save Atlantic LNG Train 1 but has not confirmed that it will be mothballed.

After Cabinet examines the negative impact, the Minister is expected to deliver a public relations plan with the announcement, which will include the improved financial performance of the NGC.

S&P Market Intelligence downgraded the economic outlook. S&P Market Intelligence said,
“The negative outlook reflects our view that there is at least a one-in-three chance we could lower the ratings over the next 12-to-24 months. We expect the decline in energy production to reverse over the next two years, and the economy to return to growth by next year. This uptick should significantly reduce the government’s fiscal deficit and eventually stabilise its net debt-to-GDP figures. However, it remains uncertain whether this improvement will be sufficient to bring per capita income back toward earlier levels, following five years of negative real GDP per capita growth, on a sustained basis.”

While Trinidad and Tobago’s expected fiscal consolidation and its sizeable government assets will continue to support the investment-grade rating, S&P still expects “the impact of the COVID-19 pandemic, together with the domestic energy sector downturn that began before, but was exacerbated by the pandemic, will result in per capita income that is 19% lower this year than it was a decade ago.”

S&P said, “We are revising our outlook on Trinidad and Tobago to negative from stable and affirming our ratings, including our ‘BBB-’ long-term sovereign credit rating, on the country.”

Responding to media questions about the cause of lower output, the impact on LNG supply and future estimates. the IOC said,

“We do not comment on long-term forecasts because they include assumptions on exploration and appraisal activity, unsanctioned projects and volumes from developments operated by others. These all carry a degree of uncertainty and are subject to change. Our goal remains to efficiently find and develop resources to satisfy our contractual obligations,”

The forecast, which continues until the end of the decade, shows the company will not return to producing two billion cubic feet of natural gas, linchpin to the country’s ability to meet all its gas requirements. Unless there are new players with large amounts of natural gas or the country has access to Venezuelan gas, the outlook for LNG and petrochemicals remains bleak. Guyana is a possible source of natural gas from Liza field as it develops a gas-to-shore project for power generation.

The decline means loss of revenue , lower taxes on production at the wellhead and less netback prices on either LNG or petrochemicals. For decades bpTT has been the largest single private-sector contributor to state coffers and foreign exchange earnings.

The Trinidad &Tobago economy has reflected the fortunes of the British major since it began operating in 1937, and discovered the giant western offshore Soldado field in 1954 and eastern offshore oil and gas fields from 1972/ Natural gas discoveries enabled the company to supply all the gas for the LNG Train 1, that of 500 mmscf/d. BP invested in petroleum exploration, education , design and construction of platforms and the installation of pipelines. In 2020 BP sold its petrochemicals business line including its 36.9 per cent stake in the Atlas methanol plant in Point Lisas. As the energy transition gathers momentum, the company is adapting to the new reality and the industry pivots to falling energy demand.

ATLANTIC LNG’S 9TH PROCESS SAFETY WEEK 2021

info@energy.gov.tt Media Release 27th July 2021

The Minister of Energy and Energy Industries, The Honourable Stuart R. Young M.P delivered the feature address at the opening of Atlantic LNG’s 9th Process Safety Week 2021 virtually from the Office of the Ministry of Energy and Energy Industries on 27th July 2021. As one of the top ten global LNG exporters Atlantic LNG has helped to champion process safety best practices in the local energy industry through its annual Process Safety Week, Ten Process Safety Fundamentals and other safety initiatives under the banner of its Process Safety Motto: “Our Assets are Safe and We Know It”. Minister Young recognized Atlantic LNG’s role as an employer within the Borough of Point Fortin and environs and the company’s all-inclusive approach to safety by ensuring that contractors and other parties from which it procures its services subscribe to its asset integrity management standard (AIM).

The company’s commitment to environmental responsibility was also acknowledged by Minister Young as it saw continued reduction in greenhouse gas emissions, with a decrease by some 73,442 tons of carbon dioxide equivalent. LNG produces lower carbon emissions in comparison to other fossil fuels making it an optimistic prospect among primary fuel sources within the energy mix. In tandem with industry analysts’ projections of strong growth for LNG demand by 3.4% per annum to 2035 and then slow by 0.5% growth between 2035 to 2050; Restructuring negotiations between the Government of Trinidad and Tobago and Atlantic Shareholders with the aim of bringing greater management and efficiency to the LNG operations are currently at a pivotal stage. Atlantic LNG is a major player in the energy sector of Trinidad and Tobago and is a major contributor to the country’s GDP. In 2020 exports of LNG from Trinidad and Tobago amounted to 14.3 billion cubic meters or 2.9% of LNG traded worldwide.

 

PowerGen

Jul 12 2021

PowerGen was presented with the Marubeni Global Safety Award.   PowerGen was able to top 45 other countries to lift the Marubeni Corporation’s Safety Award of Excellence. Hiroshi Tachigami, the general manager of Marubeni Power business in the Americas, Europe and Australia, presented The Safety Award of Excellence 2020 during a virtual ceremony on July 7 held simultaneously in Trinidad and Tobago and Japan.

“The safety management standards of PowerGen are clearly among the best in the world. I must commend the entire team, from management to field workers, for implementing and meeting such demanding safety benchmarks.”

Minister of Foreign and Caricom Affairs Dr Amery Browne and Japan’s Ambassador Extraordinary and Plenipotentiary to Trinidad and Tobago Tatsuo Hirayama witnessed the presentation.

Browne commended Marubeni for conferring the award during the pandemic period.
“It is a testament to the strong cooperation and partnership between Japan and T&T that we continue to have strong links between the private sector and the public sector.”