BPTT starts development of Matapal

 BP and Repsol start drilling at gas project

13 October 2020

By Caroline Evans in Houston

BP and Repsol began development drilling at the Matapal gas project which is on track for first production in 2022.

BPTT began work on the Matapal subsea development of three wells that tie back into the existing Juniper platform. Matapal will deliver gas into the Trinidad market from resources discovered by the Savannah exploration well drilled in 2017. A Joint venture between the European giants, Matapal development is on track for first gas in 2022. The development will have a production capacity of 400 million standard cubic feet per day (mmscfd). Hydrocarbons from Matapal will be transported to the Juniper platform via two nine kilometre flexible flowlines.

Drilling began on October 8 by the Maersk Discoverer, a semi-submersible rig which arrived on September 3. The Matapal project is located approximately 80 kilometres off the south-east coast of Trinidad. Matapal field lies approximately eight kilometres east of Juniper, in 163 metres of water depth. The project is both greenfield and brownfield, with the majority of brownfield fabrication being completed locally.

A greenfield project is new, with facilities built from scratch; brownfield projects are bought or leased with existing facilities.

President Claire Fitzpatrick said Matapal is an important part of BPTT’s portfolio to continue to underpin the company’s existing gas contracts. “This is BPTT’s second subsea development in Trinidad and the spudding of this well is a key milestone as we work toward first gas in 2022.”

The company announced the safe start-up on September 28 of the Galeota Expansion project, under construction since late 2016. The expansion project was a milestone. The Galeota Terminal is core to BPTT operations and processes hydrocarbon liquids produced from its 15 offshore facilities, as well as from other upstream producers. The terminal began operations in 1972 and the upgrade and expansion will ensure it is able to continue for the next 20 years.

The new facility will restore the Terminal’s capacity to process 20,000 barrels per day of condensate.

BPTT starts up Galeota expansion

Oct 02 2020

BP Trinidad and Tobago LLC (bpTT) announced the safe start-up of the Galeota expansion project (GEP).

President Claire Fitzpatrick said this was a proud moment for the company as it culminated years of work and effective partnerships between teams, contractors and the many people who worked together to safely deliver the project. “Although this project does not directly increase production, it is an important investment in safe, reliable and environmentally compliant facilities that will support our continued operations over the coming decades.”

The project has been under construction since late 2016 and started up on September 28, 2020. Completion represented a major milestone for bpTT.

“The Galeota Terminal is core to bpTT’s operations and is essential to T&T, as it processes all hydrocarbon liquids produced from bpTT’s 15 offshore facilities as well as from other upstream producers.”

Galeota terminal began operations in 1972 and the GEP was necessary to maintain the safe, reliable and compliant terminal operations for the next 20 plus years.
The new facility will restore the terminal’s capacity to process 20,000 barrels per day (bpd) of condensate.

“It will also make our operations safer, by separating the entrained gas and produced water more efficiently, thereby reducing condensate volatility.”

It also provides increased safety for personnel as a newly constructed control room will now move operators further away from the plant. The facility has the capacity to efficiently process 50,000bpd of produced water and enables compliance with T&T’s water pollution rules. At its peak during construction, GEP employed approximately 900 people, 96 per cent of whom were nationals.

Over the past four years, the project also brought significant benefit to the community of Mayaro and its environs through partnerships with local suppliers for the provision of services and contract labour. The GEP also invested TT$3.5 million into the community, mainly supporting education programmes. These provided grants to students wishing to pursue Caribbean Advanced Proficiency Examination (CAPE) and scholarships to those wishing to pursue tertiary level education.

Touchstone strike in Herrera-Cruse

Significant natural gas discovery … Third gas find in Trinidad as well targeting the Chinook prospect intersects 609 feet of net gas pay

14 October 2020
By Josh Lewis in Perth

Canada’s Touchstone Exploration has made a new gas discovery with its third exploration well on the onshore Ortoire block

Touchstone Exploration completed drilling the Chinook-1 exploration well on the Ortoire exploration block onshore Trinidad (Touchstone 80% working interest operator, Heritage Petroleum Company 20% working interest) and announced that the well encountered significant hydrocarbon accumulations based on wireline log data. Chinook-1 is the Company’s third exploration well drilled on the prolific Ortoire exploration block and the third hydrocarbon discovery since commencing the Ortoire exploration drilling program in August 2019.

Highlights

• Chinook-1 was drilled to a total depth of 10,039 feet to test a separate structural formation 1.5 kilometres south from the successful Cascadura gas discovery.
• Wireline logs indicated significant natural gas pay totalling approximately 589 net feet in three unique thrust sheets in the Herrera sands.
• Additional natural gas pay of approximately 20 net feet was encountered in the shallower Cruse formation.
• Completion and testing of the well is expected to be undertaken during the first quarter of 2021.
• We expect the drilling rig to mobilize to our Cascadura Deep location prior to the end of the month.
• Drilling samples and open hole wireline logs indicated that the Chinook-1 well encountered a significant Herrera turbidite package with a total thickness of 2,000 feet containing over 1,480 feet of sand.
• Open hole well logs and drilling samples indicated that these sands contain an aggregate 589 net feet of natural gas pay in three unique thrust sheets. The well encountered 341 net feet of hydrocarbon pay in the Gr7a section of the overthrust Herrera sands at measured depths between 8,154 and 8,710 feet.
• The overthrust Gr7a sands were the Company’s primary target originally identified in the offsetting BW-7X well. 180 net feet of hydrocarbon pay was identified in the Gr7bc section of the intermediate Herrera sands at measured depths between 8,850 and 9,750 feet.
• The sands encountered in this thrust sheet also correlate to the offsetting BW-7X well and were the Company’s secondary target. 68 net feet of hydrocarbon pay was identified in the Gr7bc section in a subthrust sheet of Herrera sands at measured depths between 9,750 and 10,003 feet. This represents a previously unknown thrust sheet as no sands of this depth were previously penetrated in the offsetting wells.
• In addition to Herrera sandstones and associated hydrocarbon discoveries, an additional 20 net feet of hydrocarbon pay was identified in the Cruse formation at depths between 2,996 and 3,021 feet. This represents a new discovery in the area that was not observed in offsetting well data.

In the first quarter of 2021, the Company expects to initiate a comprehensive completion and testing plan to evaluate the economic potential of the hydrocarbon sands. We expect the drilling rig to move to the Cascadura Deep location prior to the end of the month.

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

‘The results from the Chinook well exceeded pre-drill expectations. The successful exploration well further confirms the geological model developed by our team and is expected to provide significant development opportunities in the Chinook area. With both the shallow and deepest zones being new to the area, it also identified future exploration opportunities. The Company’s focus is now on the drilling of the Cascadura Deep exploration well, which will impact the timing of Chinook-1 production testing operations to ensure the safety of operations. I would like to thank our contractors, suppliers, government officials and our staff who have worked together to keep us moving forward during these challenging times.’

James Shipka, Chief Operating Officer, stated:

‘We continue to see the significant and growing potential of the Ortoire exploration block with Chinook-1 encountering over 2,000 feet of turbidite deposits, nearly 1,500 feet of developed sands and a total of over 600 feet of natural gas pay. At a depth of 10,039 feet, Chinook-1 is one of the deepest wells drilled onshore Trinidad in almost a decade and verifies the evolution of our drilling practices since commencing our exploration program. For Chinook-1, we employed a synthetic oil-based mud system that assisted in drilling while reducing formation damage and incorporated a top drive onto the drilling rig to aid in drilling to greater depths. We intend to replicate these drilling practices moving forward given Chinook-1 demonstrated our ability to successfully conduct complex operations in a safe manner while strictly adhering to restrictions imposed during the ongoing COVID 19 pandemic.’

Chinook-1 Drilling

• Chinook-1 exploration well was spud on August 13, 2020 using Well Services Petroleum Ltd. Rig #80. The well was designed to explore the potential for a thick section of Herrera sandstones in the SW-NE trending Chinook anticline, which is located approx. 1.5 kms south of the Cascadura anticline and our associated gas discovery.
• The primary target of the Chinook well was the Gr7a overthrust Herrera sands near the crest of the structure at an approximate measured depth of 8,100 feet, which is capped by thick Karamat shales.
• The well was intended to further evaluate a secondary target of stacked or repeated intervals of Gr7bc intermediate Herrera sands from approximately 8,800 feet to a planned total depth of 9,870 feet.
• The well was drilled to a total measured depth of 10,039 feet (true vertical depth of 9,776 feet) on October 11, 2020 and was extended past its originally planned depth due to hydrocarbon shows at 9,820 feet.

Despite being spud a mere 1.5 kilometres south of Cascadura, the Chinook anticline is separate from, and distinctly different than the Cascadura anticline to the north. The structural mapping on the Herrera interval reveals that Cascadura and Chinook are two anticlines converging toward each other, with Cascadura being a tighter but heavily stacked fold, thereby making it a taller structure, while Chinook is interpreted to be a simpler, broader fold.

The Chinook-1 well is the third of a four well exploration commitment under Touchstone’s Ortoire Exploration and Production Licence. The Company has an 80% working interest in the licence but is responsible for 100% of the drilling, completion and testing costs associated with the initial four exploration wells. Heritage Petroleum Company Limited holds the remaining 20% working interest. Touchstone has no reserves associated with the Chinook-1 well included in the Company’s December 31, 2019 independent reserves report.

Further testing is required to determine the economic viability and potential of the well, and the Company plans to commence completion and production testing operations during the first quarter of 2021.

Source: Touchstone Exploration

TOUCHSTONE ANNOUNCES SIGNIFICANT NATURAL GAS DISCOVERY AT CHINOOK

CALGARY, ALBERTA (October 14, 2020)

– Touchstone Exploration Inc. (“Touchstone”, “we”, “our”, “us” or the “Company”) (TSX, LSE: TXP) reports that the Company has completed drilling the Chinook-1 exploration well on the Ortoire exploration block, onshore in the Republic of Trinidad and Tobago .

(Touchstone 80% working interest operator, Heritage Petroleum Company Limited 20% working interest) and is pleased to announce that the well encountered significant hydrocarbon accumulations based on wireline log data. Chinook-1 is the Company’s third exploration well drilled on the Ortoire exploration block and the third hydrocarbon discovery since commencing the Ortoire exploration drilling program in August 2019.

Highlights

• Chinook-1 was drilled to a total depth of 10,039 feet to test a separate structural formation 1.5 kilometres south from the successful Cascadura gas discovery.
• Wireline logs indicated significant natural gas pay totalling approximately 589 net feet in three unique thrust sheets in the Herrera sands.
• Additional natural gas pay of approximately 20 net feet was encountered in the shallower Cruse formation.
• Completion and testing of the well is expected to be undertaken during the first quarter of 2021.
• We expect the drilling rig to mobilize to our Cascadura Deep location prior to the end of the month.
• Drilling samples and open hole wireline logs indicated that the Chinook-1 well encountered a significant Herrera turbidite package with a total thickness of 2,000 feet containing over 1,480 feet of sand.
• Open hole well logs and drilling samples indicated that these sands conJ
• The well encountered 341 net feet of hydrocarbon pay in the Gr7a section of the overthrust Herrera sands at measured depths between 8,154 and 8,710 feet. The overthrust Gr7a sands were the Company’s primary target originally identified in the offsetting BW-7X well. 180 net feet of hydrocarbon pay was identified in the Gr7bc section of the intermediate Herrera sands at measured depths between 8,850 and 9,750 feet.
• The sands encountered in this thrust sheet also correlate to the offsetting BW-7X well and were the Company’s secondary target.68 net feet of hydrocarbon pay was identified in the Gr7bc section in a subthrust sheet of Herrera sands at measured depths between 9,750 and 10,003 feet. This represents a previously unknown thrust sheet as no sands of this depth were previously penetrated in the offsetting wells.

In addition to the Herrera sandstones and the associated hydrocarbon discoveries, an additional 20 net feet of hydrocarbon pay was identified in the Cruse formation at depths between 2,996 and 3,021 feet. This represents a new discovery in the area that was not observed in offsetting well data.

In the first quarter of 2021, the Company expects to initiate a comprehensive completion and testing plan to evaluate the economic potential of the hydrocarbon sands. We expect the drilling rig to move to the Cascadura Deep location prior to the end of the month.

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

“The results from the Chinook well exceeded pre-drill expectations. The successful exploration well further confirms the geological model developed by our team and is expected to provide significant development opportunities in the Chinook area. With both the shallow and deepest zones being new to the area, it also identified future exploration opportunities. The Company’s focus is now on the drilling of the Cascadura Deep exploration well, which will impact the timing of Chinook-1 production testing operations to ensure the safety of operations. I would like to thank our contractors, suppliers, government officials and our staff who have worked together to keep us moving forward during these challenging times.”

James Shipka, Chief Operating Officer, stated:

“We continue to see the significant and growing potential of the Ortoire exploration block with Chinook-1 encountering over 2,000 feet of turbidite deposits, nearly 1,500 feet of developed sands and a total of over 600 feet of natural gas pay. At a depth of 10,039 feet, Chinook-1 is one of the deepest wells drilled onshore Trinidad in almost a decade and verifies the evolution of our drilling practices since commencing our exploration program. For Chinook-1, we employed a synthetic oil-based mud system that assisted in drilling while reducing formation damage and incorporated a top drive onto the drilling rig to aid in drilling to greater depths. We intend to replicate these drilling practices moving forward given Chinook-1 demonstrated our ability to successfully conduct complex operations in a safe manner while strictly adhering to restrictions imposed during the ongoing COVID 19 pandemic.”

Chinook-1 Drilling

The Chinook-1 exploration well was spud on August 13, 2020 using Well Services Petroleum Ltd. Rig #80. The well was designed to explore the potential for a thick section of Herrera sandstones in the SW-NE trending Chinook anticline, which is located approximately 1.5 kilometres south of the Cascadura anticline and our associated gas discovery. The primary target of the Chinook well was the Gr7a overthrust Herrera sands near the crest of the structure at an approximate measured depth of 8,100 feet, which is capped by thick Karamat shales. The well was intended to further evaluate a secondary target of stacked or repeated intervals of Gr7bc intermediate Herrera sands from approximately 8,800 feet to a planned total depth of 9,870 feet. The well was drilled to a total measured depth of 10,039 feet (true vertical depth of 9,776 feet) on October 11, 2020 and was extended past its originally planned depth due to hydrocarbon shows at 9,820 feet.

Despite being spud a mere 1.5 kilometres south of Cascadura, the Chinook anticline is separate from, and distinctly different than the Cascadura anticline to the north. The structural mapping on the Herrera interval reveals that Cascadura and Chinook are two anticlines converging toward each other, with Cascadura being a tighter but heavily stacked fold, thereby making it a taller structure, while Chinook is interpreted to be a simpler, broader fold.

The Chinook-1 well is the third of a four well exploration commitment under Touchstone’s Ortoire Exploration and Production Licence. The Company has an 80% working interest in the licence but is responsible for 100% of the drilling, completion and testing costs associated with the initial four exploration wells. Heritage Petroleum Company Limited holds the remaining 20% working interest.Touchstone has no reserves associated with the Chinook-1 well included in the Company’s December 31, 2019 independent reserves report.

Further testing is required to determine the economic viability and potential of the well, and the Company plans to commence completion and production testing operations during the first quarter of 2021.

Touchstone Exploration Inc.

Touchstone Exploration Inc. is a Calgary 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. James Shipka, Chief Operating Officer

Trinity Exploration & Production plc

Q3 2020 Operational Update

Strong production & cash generation and focus on creating a differentiated company of scale

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 September 2020 (“Q3 2020” or “the period”).

Production levels remained robust during Q3 2020 with volumes averaging 3,135 bopd, yielding a year to date (“YTD”) 2020 average of 3,232 bopd. This represents a 9.8% increase over the corresponding period last year. The October month to date average is 3,225 bopd.

Cash generation also remained strong during the period, with the Group’s unaudited cash balances increasing to US$22.2 million as at 30 September 2020 (US$19.7 million (unaudited) as at 30 June 2020).

Trinity’s robust operating model and financial resilience are affording the Company the flexibility to examine a range of strategic growth options to increase the scale of the business, both from within the current portfolio and from new opportunities. The recent submission of Expressions of Interest (“EOI’s”) on two new opportunities, in partnership with a large international operator, are examples of such opportunities. As a short-listed party, the next step for the first opportunity, the Jubilee Field, is expected to be access to the data room as part of the next stage bid process.

The Board believes that the Group’s robust business model, financial resilience, expanding opportunity set and focus on automation and transition technologies, will enable the Company to develop into a differentiated company of scale.

Strategic Highlights: Pursuing Scale & Automation

• A solid reserves base and production profile are matched by an extensive development pipeline
• Continued development of new sub-surface ideas and potential geological plays
• The increasing use of analytics, transition technologies and automation provide a differentiated and scalable foundation for continued growth
• Financial strength means that Trinity is well placed to take advantage of commercial opportunities as and when they arise
• Asset acquisitions and partnerships offer the potential to increase scale, share risk and drive economies
• Memoranda of Understanding have been signed with both a large international operator and two large international contractors on new business initiatives
• EOI’s submitted, in conjunction with these consortium partners, on two E&P opportunities of scale

Q3 2020 Operational Highlights

• Robust COVID-19 measures continue with no significant impact to operations and production
• 11.3% year-on-year increase in Group average production volumes to 3,135 bopd for the third quarter (Q3 2019: 2,816 bopd)
• YTD 2020 (Q1-Q3) average production volumes of 3,232 bopd represent a year-on-year increase of 9.8% (YTD 2019 2,943 bopd)
• 8 recompletions (“RCPs”) (Q2 2020: 3) and 27 workovers (Q2 2020: 17) were completed during the period, with swabbing continuing across all onshore assets and extended to the west coast assets
• The application of SCADA technology and wider scale automation continues at pace with the increasing use of automation hardware and analytical applications into well operation processes
• Production guidance remains unchanged, with average net production for 2020 still expected to be in the range of 3,100 – 3,300 bopd (2019: 3,007 bopd)

Q3 2020 Financial Highlights

• Average realisation of US$39.3/bbl for Q3 (Q2 2020: US$26.4/bbl) yielding a YTD 2020 average of US$37.3/bbl (YTD Q3 2019: US$58.3/bbl). As a result, no Supplemental Petroleum Taxes (“SPT”) will be payable with respect to the first three quarters of 2020
• Cash balance of US$22.2million (unaudited) as at 30 September 2020 (31 December 2019: US$13.8 million, audited). Net cash (cash minus debt) balance of US$19.5 million (unaudited), excluding US$2.7 million drawn working capital facility, versus US$13.8 million (audited) as at 31 December 2019
• The 40% increase in net cash balances since the year end has been driven by strong operating cash flow generation (despite the 36% reduction in the oil price versus the equivalent period in 2019)
• Forecast free cash flow positive for FY 2020 at current forward curve
• Cash balances at year end expected to be closer to 30 June 2020 level with investment in growth projects during Q4

Post Period-End Highlights

• Trinidad and Tobago’s Budget Statement on 5 October 2020 confirmed the proposed reforms of SPT, particularly for small producers and mature fields, with a view to encouraging investment and job creation, effective from 1 January 2021. Specifically:
• The threshold for the imposition of SPT will be lifted from $50/bbl to $75/bbl for fiscal years 2021 and 2022;
• This increased threshold will apply to small onshore producers (understood to be where the asset/licence produces less than 2,000 bopd) and is also expected to apply to small mature offshore fields;
• The new SPT regime will be reviewed, for potential continuation at this threshold level, at the end of the two year period.

Operations Update

• The Company’s field operations have not, to date, been negatively impacted by COVID-19, but the management team continues to monitor the situation and has put further appropriate measures in place which will continue to be adapted as and when required.
• Production levels have remained robust, with current production in excess of 3,200 bopd, even in the absence of new wells being drilled. Protecting past investment is a key priority and ensures that rates of return are maintained despite the dramatic reduction in the oil price.

Onshore

• The potential to increase production from existing wells is a key driver behind the Group’s automation focus with WD 5/6 being the first onshore licence to have a wide-scale rollout (taking the total to 31 automated wells from 8 currently). WD 5/6 is Trinity’s second largest production unit after Trintes.
• At Trintes, where the key wells have now been automated for several years, production has increased by over 20% and production volatility has been reduced dramatically. The increasing rollout of SCADA units and wider scale automation on the higher margin onshore wells is expected to deliver a meaningful uplift to the top and bottom-line performance of the asset. Trinity has a dedicated internal team driving automation and data science forward and a new workshop will be set up shortly to facilitate the assembly and servicing of our automation units.

Offshore

• On the Company’s east coast Galeota block detailed technical and commercial engagement continues with a leading international contractor for the offshore facilities design.
• Discussions are also progressing with both Heritage Petroleum Company Limited and The Ministry of Energy and Energy Industries (Trinity’s regulator) to move the Galeota block licence renewal forward.

The Environmental Impact Assessment (“EIA”) study commenced in February 2020 with all dry season data collection having been completed and wet season data collection having commenced in September. The EIA study and data is due to be submitted in H1 2021.

The offshore geophysical survey scope was completed on 8 October 2020 and the nearshore survey is expected to commence on 15 October 2020. The data collected from this survey will be used for both the EIA models and pipeline engineering.

The dynamic reservoir model on the development continues with Axis Well Technologies in Aberdeen. This important work will assist in optimal platform and well placement and enable the Company to develop the best reservoir strategy to drain the maximum amount of reserves with the minimum number of wells.

Outlook

• The Company’s robust production base combined with its increasing use of data science and automation provides not only a solid base for continued organic growth, but a new differentiated way in managing the business.
• In addition, asset acquisitions and partnerships are another focus of growth, offering the potential to increase scale, drive economies and, when automation and data analytics are layered on, to further improve financial returns and enhance shareholder value.

Bruce Dingwall CBE, Executive Chairman of Trinity, commented:

“Continuing to sustain production levels and further strengthen our balance sheet through strong cash generation under the current exceptional circumstances, and in the absence of new drilling activity, is a commendable achievement. To maintain higher production levels with very limited financial investment and the added restrictions of COVID-19-secure practices is a testament to the strength of the business and – ultimately – the intense efforts of the team.”

“The announcement in the 2020 budget on 5 October 2020 of reforms to the Petroleum Act and, in particular, the proposed re-setting of SPT to commence at US$75/bbl rather than US$50/bbl, for an initial two year period from 1 January 2021, is an extremely positive development for the Company. When enacted, this will substantially strengthen the investment case, to the benefit of all stakeholders in the business.”

“I must again thank all our staff for their unstinting dedication and the supply chain and their employees for supporting our operations through this challenging period. We are well positioned and can clearly see the exciting opportunities in front of us.”

www.trinityexploration.com or contact:

Bruce Dingwall, Executive Chairman
Jeremy Bridglalsingh, Managing Director
Tracy Mackenzie, Corporate Development Manager

Trinity is an independent oil and gas exploration and 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 2019 was 20.9 mmbbls. Group 2C contingent resources are estimated to be 20.1 mmbbls. The Group’s overall 2P plus 2C volumes are therefore 41.1 mmbbls.
Trinity is listed on the AIM market of the London Stock Exchange under the ticker TRIN.
Regulatory Announcement of Significant SPT Reform

Trinity Exploration & Production plc (AIM: TRIN), the independent E&P company focused on Trinidad and Tobago notes the Government of Trinidad and Tobago’s proposed reforms encouraging investment in the energy sector included in the 2020 Budget Statement. The Statement contained proposed notable changes with regards to Supplemental Petroleum Tax (“SPT”), particularly for small producers and mature fields, with a view to encouraging investment and job creation, effective from 1 January 2021. Specifically:

• The threshold for the imposition of SPT will be lifted from $50/bbl to $75/bbl for fiscal years 2021 and 2022;
• This increased threshold will apply to small onshore producers (understood to be where the asset/licence
produces less than 2,000 bopd) and is also expected to apply to small mature offshore fields;
• The new SPT regime will be reviewed, for continuation at this threshold level, at the end of the two year period.

SPT is currently applied to crude oil production when realisations average over US$50.01/bbl in any given calendar quarter. This significantly impacts economic returns, particularly when oil price realisations are between US$50.01 and US$60.00, and has therefore been a major constraint on investment.

Impact
Trinity believes that, as a result of these proposed changes, none of its six Onshore assets/fields would be subject to SPT should oil price realisations reside in the US$50-US$75/bbl range. Furthermore, the Minister indicated that a similar provision would also be made available to small offshore production assets. Given that Trinity’s offshore assets/fields are both mature and below the 2,000 bopd onshore threshold, Trinity’s expectation is that its offshore producing assets are also likely to qualify for the new threshold rates.

The Budget changes to SPT, when implemented, will significantly improve our ability to generate sustainable cash flows, particularly in the US$50-US$75/bbl range, and therefore to invest to grow production and deliver attractive returns for shareholders. The changes will also improve the Company’s ability to hedge more effectively against low oil prices and, particularly if enacted for the longer term, to employ a prudent level of financial leverage to lower our cost of capital.

In addition, given Trinity’s low cost base, balance sheet strength and operational expertise, the Company is extremely well positioned to act as a consolidator of further small fields in Trinidad & Tobago. This budget change is highly encouraging for Trinity as it looks to broaden its portfolio with bolt-on acquisitions and new licence awards.

Bruce Dingwall CBE, Executive Chairman of Trinity, commented:

“The proposed Budget reform of the SPT regime is extremely positive for Trinity, and for all the smaller oil producers operating in Trinidad.
“Meaningful reform to the SPT regime will enhance the economic returns to all stakeholders; the T&T Government, Heritage, the supply chain and the people of T&T. Through such reforms, which are happening globally, incentivising increased activity and greater oil production will lead to maximising recovery from our reservoirs – which in turn will lead to enhanced employment opportunities and a step-change in potential cash generation levels and returns for operators.

“There is still work to be done to finalise the legislation and Trinity, alongside the various lobbying chambers in Trinidad, as encouraged by the Minister of Finance, will continue to provide input to the drafting of the Bill in the coming weeks and months.

“Meaningful change to SPT has been a long time coming and I must thank the Government for taking this important step to stimulate oil production activity in Trinidad. The Government has done this against the difficult backdrop of the conditions that the COVID-19 pandemic has created and as such, it sends a clear signal as to the importance of the oil sector to Trinidad.”

BHP Deepwater Gas

Australian operator’s finds are almost double estimates.

23 September 2020
Gareth Chetwynd in London

BHP gas discoveries in deep-water acreage off Trinidad & Tobago are almost twice the volumes announced by the operator.

Sep 29 2020

Caribbean Gas Chemical Limited

CGCL loaded its first cargo of methanol for export at LABIDCO Port of Brighton La Brea. In a significant step forward , 13,000 metric tons of methanol were loaded on-board M/T Trans Catalonia, boosting export of methanol amid closure of plants at Point Lisas Industrial Estate due to depressed international prices for the product and higher prices for natural gas, the major feedstock in production of methanol. CGCL, partly owned by NGC, benefits from favourable gas prices.

Chief Executive Officer Nakaba Aoyagi, expressed satisfaction with CGCL exporting its first cargo.“This is a great day for CGCL! The team has worked tirelessly to get us to this point amid a dreadful pandemic and I am extremely proud of the achievement of this remarkable milestone for both the company and the country.”

CGCL commenced construction of its US$990 million dollars Methanol and Di-Methyl Ether Facility at Union Industrial Estate (UIE), La Brea, in September 2015 and achieved Mechanical Completion on June 27, 2020. At the height of construction, the project employed over two thousand workers, including residents of La Brea and its fence-line communities. Commercial operation is expected within 4Q 2020. At its peak, the Facility will produce 1,000,000 metric tonnes of Methanol and 20,000 metric tonnes of DME per year.

CGCL is a joint venture led by a consortium comprising Mitsubishi Gas Chemical Company, Inc., Mitsubishi Corporation, Mitsubishi Heavy Industries, Engineering Ltd., The National Gas Company of Trinidad and Tobago Limited and Massy Holdings Limited. The strategic partnership allows for supportive financing and industry cooperation among local and international stakeholders.

CEO, Aoyagi said “The Government of the Republic of Trinidad and Tobago has confirmed the strategic importance of the petrochemical industry to Trinidad and Tobago’s economy by encouraging private/foreign investment in the downstream, thereby stimulating foreign exchange generation, creating high quality jobs and stimulating the local economic multiplier effect through the contracting of a multitude of local services over the life of the investment. CGCL looks forward to doing its part in boosting the local economy through its efforts and contributions and intends to play an integral role in the delivery of cleaner energy, to the world.”

Predator Oil and Gas operations update

05 Oct 2020

Predator Oil & Gas provided an update on operations in Trinidad, Morocco and Ireland.

Trinidad

• The Exclusivity Period under the terms of the Heads of Agreement for C02 Gas Sales entered into by Predator with Massy Gas Products has been extended to 31 March 2022.
• Approvals to return AT-5X to production; to commission the new CO2 EOR production facilities, provided by the Company; and to continuously inject C02 at AT13 are progressing satisfactorily and a further update will be given in due course.
• In accordance with the Well Participation Agreement (‘WPA’) with FRAM Exploration Trinidad Ltd. (‘FRAM’) (and as subsequently varied by mutual agreement), the Company advises that it is not entering into a Sale and Purchase Agreement to acquire FRAM by the previously agreed deadline of 30 September 2020. Only this specific aspect of the WPA has lapsed, all other conditions of the WPA remaining in full force and effect.

After careful consideration, the Company decided that acquiring ownership of an oil field that continues to produce by conventional methods does not fit with its business strategy, which is focussed on addressing climate change concerns through sequestrating CO2 and exploring for and developing gas. Furthermore, in line with the Company’s prudent management of resources through the COVID-19 crisis, it was deemed inappropriate to enter into a corporate transaction that would involve significant transaction costs; potential delays in regulatory approvals; taking on liabilities and administrative burdens associated with an Incremental Production Service Contract; and potentially significant shareholder dilution.

Extension of exclusivity over Trinidad’s entire surplus liquid CO2 supply and the successful execution of Trinidad and Tobago’s first large scale CO2 EOR project for many years are compatible with the Company’s strategy of developing and offering a flexible CO2 EOR services business in Trinidad to other operators. This is achievable without the onerous burden of licence liabilities.

Morocco

• An independent third party technical update on the new MOU-4 Prospect has been completed. It confirms that the MOU-4 prospect is seismic amplitude-supported and covers an area of 38 km². The MOU-4 Prospect is located 6 kilometres from the MOU-1 drill site and offers the opportunity for additional drilling whilst the rig is mobilised on the MOU-1 site.
• The primary gas target is prognosed to occur at 1475 metres TVD KB. SLR Consulting Ireland will complete a Competent Persons Report for the new MOU-4 Prospect and an update on the results will be provided. COVID-19 restrictions remain in force.
• The Company remains ‘drill ready’ based on the operational planning and site visit undertaken in March this year and bids for well services that have been received.

Ireland

• An independent third party preliminary Front End Engineering Design study has been authorised by the Company. This will address the onshore gas transmission network upgrades required to accommodate gas from a new entrant to the gas transmission grid at the scoping volumes of up to 300 mm cfgpd that are potentially to be delivered from the offshore Floating Storage and Regasification Unit vessel. ‘First Gas’ is projected for Q1/Q2 2024, subject to receipt of all regulatory and government consents.

Paul Griffiths, Chief Executive of Predator, commented:

‘We are pleased to be continuing to make operation progress on all fronts despite the obvious constraints that COVID-19 impose, particularly in an onshore operating environment embedded within local communities. We have prudently taken steps to ensure we focus personnel and cash resources during COVID-19 on maturing our businesses and developing credible additional opportunities for them in order to strengthen the ability to generate potential, project-backed, M & A value. Acquiring an asset such as FRAM would have been non-sensical in this context. It would have potentially diverted valuable resources away from Morocco, which remains the greatest potential risk/reward prize in the Company’s portfolio and is an absolute priority for the Company to drill as early as COVID-19 restrictions allow.’

Source: Predator Oil & Gas

–

Canadian-headquartered petrochemical icon Nutrien announced “the indefinite closure” of one of its four ammonia plants, PCS 03.

• 50 workers expect to lose jobs, effective October 30. Suspension of operations is in response to market conditions and lower global prices for ammonia, the company said on its website.

Nutrien said the first adjustment will be offer of a voluntary separation package to workers, to be settled by October. If necessary, the company may consider involuntary separation.

“This is a very difficult time but right now we are looking at the long term sustainability of the company.” There will be no transfers or absorption of workers within other parts of the organisation at this time but the company is working on a suitable VSEP package and will try to assist in any way to make the transition as smooth as possible.

The company’s other two plants and the associated urea facility will continue to operate at maximum capacity. The other plant, PCS 02, was taken offline in May due to market conditions and is expected to come back online as conditions improve.

“Market conditions have pressed the need for the closure of the plant, which will result in a 15 per cent reduction in the workforce effective October 30. These changes will enable the facility to operate more efficiently, competitively and sustainably into the future.”

They will ensure customers are supported and there are no changes to existing supplier contractual agreements.

Degeneration of Point Lisas Industrial Estate continues but Proman Group, the second largest methanol company in the world, announced the temporary restart of one of its methanol plants that had been idled.

Energy Chamber

Dwight Mahabir replaces Eugene Tiah as chairman of the Energy Chamber.

New fiscal measures announced during presentation of the national budget which will affect the energy sector include:

• Changes to Supplemental Petroleum Tax (SPT)
• Liberalization of the fuel market
• Removal of subsidies
• Changes to the incentive regime around import of vehicles

Minister of Energy, Senator Franklin Khan delivered a feature address and update on the energy sector at the Energy Chamber’s Post AGM Event. The Minister participated in a Q&A with attendees .

During the Energy Chamber’s virtual post- annual general meeting forum, Energy Minister Khan was asked whether the United Independent Petroleum Marketing Company Limited, NP’s closest competitor, would be allowed to purchase gas stations that are up for sale. Khan said no decision was made on whether Unipet will be able to purchase gas stations when they eventually go up for sale,

“There are several types of gas stations, there are gas station which are company owned and company operated, where they own the gas stations and they operate the gas stations through a franchise. Then there are NP owned and dealer operated, the dealer has the retail margin but it is NP owned. Then there are dealer owned and dealer operated which is still flying an NP flag, NP will have no say in that because the dealer owns it, the dealer operates it. For the NP owned and dealer operated the dealer would have the first right of purchase, we will define the terms and hopefully a lot of them will be able to purchase, if not it goes into the open market. And the company owned gas stations which are NP owned and NP operated, NP will be mandated to sell those stations to a commercial operator. Now whether Unipet will be allowed to purchase NP gas stations we have not really made a final decision on that.”

For 25 years the gas station business was conducted exclusively by the State. In 1996 the Government appointed a Petroleum Retail Committee and it recommended a phased de-monopolisation of the industry.

A group of independent owner dealers formed themselves into Unipet and applied for a wholesale marketing license which was granted in July 1999.

Unipet now has 24 service stations located throughout the country.

Khan was asked what the sale of gas stations would mean for the future of NP.
“NP will be a wholesaler so for the time being there will be two brands flying. So stations will still be under two names either Unipet or NP at least in the short term but the retail margin will now belong to the dealer.”

The overdue decision to liberalise the fuel market was taken because of the current low energy price environment to minimise the impact of the removal of the subsidy.
“This move is also in keeping with the need to nudge our citizenry into more responsible and sustainable behaviour when it comes to the consumption of resources.”

Khan expects the de-regularisation of the fuel market will encourage competition.
“For the record, based on current crude prices while we haven’t worked out the details of some of the formulae as yet I can assure you that the price of premium and super should fall and the price of diesel should remain about the same.”

Chamber of Commerce response to budget

. Government plans to privatise the operations of the port. – PHOTO BY JEFF MAYERS

Trinidad and Tobago Chamber of Industry and Commerce acknowledges the unprecedented economic challenges which impacted formulation of the national budget for fiscal 2020/2021 With main revenue streams still dependent on gas and oil – commodities which are not enjoying high prices globally – the projected prices of US$45 per barrel for oil, and gas at US$3 per mmbtu, appears reasonable.

The Finance Minister acknowledged the challenges faced by the Gas Value Chain and the need to become competitive. Long term sustainability of the sector will be dependent on how fast work being performed on the gas value chain is completed.

The positive adjustment to the supplemental petroleum tax (SPT) regime will have a significant impact on small producers, where we expect increased activity. We are also encouraged by the statement that the Petroleum Act will be reviewed. Hopefully this can be done sooner rather than later.

Overall, the push to start the energy transition is encouraging but greater focus must be placed on energy conservation and reducing wastage. With a proper plan, this could be done successfully and opportunities created for investment.

However, there are high expectations from non-energy sectors which feed into the projected revenue of $41.361 billion, and expenditure $49.573 billion with a fiscal deficit of $8.209 billion. In our opinion, not enough was done to close the deficit, and more details about the contribution from the non-energy sector should be shared.

We have consistently advocated for an enabling environment to develop our business sector, particularly manufacturing, as a crucial part of our foreign exchange earnings and diversification. The continued digitalisation of government services will be critical to improve the efficiency and the ease of doing business. We welcome the announcement of the electronic funds transfer window to pay taxes and customs duties online. We call on the Opposition to support the establishment of the TTRA, failing which priority must be placed on alternative mechanisms to widen the tax net. Specifically relating to property taxes, the chamber has continuously advocated for the six per cent tax to apply strictly to physical property and not on installed plant, machinery and equipment.

Although we recognise the need for social support for Tobago we are disappointed that our recommendation to repeal the Foreign Investment Tobago Land Acquisition Order was not accepted. This will continue to affect almost every facet of life of the island’s tourism-dependent economy. It particularly stymies construction and related employment, further hindering recovery efforts. Perhaps the effective implementation of the promised special government-guaranteed window in the commercial banks could still have a positive impact

On the other hand, we were pleased that our recommendation to increase the corporation tax holiday for SMEs which list on the SME Stock Exchange was accepted. This, along with the measure to allocate 20 per cent of government housing construction to SME contractors, is a positive step.

Measures to stimulate economic activity such as the incentives to drive activity in the construction sector and the increase in the personal tax allowance are positive steps, since they will provide more disposable income and create aggregate demand. The liberalisation of the retail fuel market and the privatisation of operations of the Port of Port of Spain are also progressive steps which will encourage more public-private partnerships and improve efficiencies.

Although more information is needed to evaluate the measures, we recognise steps had to be taken to dampen demand for foreign currency. Incentives to encourage local farming and consumption will, if implemented properly, have a positive effect.

The time is right for Government to play a more facilitative role for the business sector to put our country on a more sustainable path. The chamber now looks forward to the details which will emerge during the budget debate.

TTMA gains $50m for exports

Finance Minister Colm Imbert surprised manufacturers with a new $50 million facility specifically geared to increase exports. He told TT Manufacturers’ Association (TTMA) post-budget forum that during the planning of the budget, he received a request from the Ministry of Trade for funds to assist exporters in growing foreign markets.

“I can tell you now we’ve put $50 million into the Ministry of Trade’s allocation specifically for that for overseas market development and export promotion. This is purely for manufacturers.”

The ministry will determine the best way to invest the money, including ways to assist local manufacturers with crossing non-tariff barriers and even putting people on the ground in foreign countries to lobby on TT’s behalf. Manufacturing was the engine of the economy.

“We are depending on the manufacturing sector to pull us out of the current situation.”

President Franka Costelloe said the $50 million facility “is a true reflection of Government’s genuine collaboration with business in pushing out export. (Increasing markets) is critical to diversification and the transformation of the economy. It shows support and confidence in the sector and it’s our responsibility now to take this and make the most of it.”

The sector now has its work cut out. The budget did reflect several of the organisation’s recommendations on the best way to create an enabling environment.

“The ministry has given us tools. This is a difficult time and a hard budget for the minister but for him to allocate this and other resources shows a strong sense of collaboration between the government and the private sector.”

In the budget the minister noted the poor performance in ease of doing business, ranking 105 out of 190 in the World Bank’s Doing Business Index. He called the impediments, including inordinate lengths of time it takes to access permits and information, “totally unacceptable.”

On implementation, Imbert said it is up to individual ministries to implement but the Ministry of Finance would monitor.

“We’ve highlighted (these shortcomings) and we are now going to drive the process by ensuring that everybody plays their part. The Ministry of Finance announces these things but it’s up to the other ministries to (implement). So, we on the level of the government will be evaluating and monitoring all of the ministries on a regular basis. That’s the only way to get it done. If you leave everything up to one group you will never be done. That’s why I took that initiative.”

Mention in the budget acknowledged there was a problem.

“These are bad things and it does affect ease of doing business… it’s one of the things that inhibits growth in TT. It is so difficult to get licences, permits, to even get an answer from a department. That is why we made the decision in the budget speech to say it is unacceptable and we will go after each one of the departments responsible to make sure it gets done.”

Costelloe said the government’s humility to recognise its responsibility in improving the public sector was “most illuminating. They’re not just saying that it must (be done) but to recognise where the shortfalls are indicated they are measuring and now we have to work with them and let them know what are the new targets to facilitate business.”

Execution and implementation mean clearly tracking against a target of where the country wants to go and the private sector will help Government set and reach those goals.

“Nobody knows it better than we do because that will help facilitate our own businesses. Increasing exports is our responsibility as a private sector. Creating an enabling environment is the responsibility of Government but finding and increasing the exports and that market share is the responsibility of the private sector.”

On this budget and the apparent embrace of the private sector from the government, Imbert said it was a different approach.

“This is not an easy situation we are in at all. The private sector keeps telling us if we give them incentives they will increase investment and growth, so we’ll see. We are trying.”

No gas monopoly

Oct 07 2020

The Minister of Finance announced the liberalisation of the fuel sector as well as the intended sale of all NP service stations, with operators to be given first preference. This sparked fear of a monopoly among private entities and increased costs at the pump for the public. The Prime Minister tried to quell anxiety with assurances that the decision to privatise National Petroleum gas stations will not lead to a monopoly.

“It will be very transparent and.. very open. .. nothing is reserved for anybody. Conglomerate or solitaire. ..we will ensure that there is transparency in what we do… .. Government will have to ensure that whatever we create does not worsen our situation or give any undue advantage or create any disadvantage.”
He downplayed the possibility of runaway prices adversely affecting the wider public, as it placed a level of responsibility on the consumer to manage the market and National Petroleum never controlled the fuel prices.
“That was never NP’s role, fuel prices were a cabinet decision. It will be more of a market situation because of competition in the market, the consumer will now play a bigger role.”
“If the people who are now going to get involved in owning gas stations and they are competing, you wouldn’t go to a gas station where the price is higher would you? And by the same token, if the price of oil goes up and takes the price of fuel up….. you would make a decision as to when you travel, how many people you carry … how often you travel, how much fuel you burn, so you now have the lever .. to .. influence your fuel expense.”

He dismissed complaints from used car dealers, who expect their market to collapse amid removal of tax concessions for imported vehicles and reduction of the age of imported used cars to three years, saying that the import of cars was not a national priority .
“… to the people in the car business,….. if I have a choice to make … I would restrict the expenditure on motorcars. Because .. .. we cannot be short of medicine for the hospital….some countries in situations like this … ban the importation of cars. .. that was an option .. …But we said we will take the next option .. to restrict the importation.”
Being a state asset owned by citizens NP should offer stations at the lowest cost to PDA which can launch a company on the stock exchange to create a shareholding democracy, allowing the public to trade, dispelling fears of profiteering. This can be funded by total divestment of PROFITABLE WITCO and ANGOSTURA.

SOC National Petroleum Marketing Company (NP) will continue to absorb the cost of transporting fuel to Tobago after NP gas stations are privatised.

Minister and senator, Franklin Khan said “NP, as the wholesaler, would absorb the cost for fuel to Tobago. NP will be selling fuel at the same price to retailers in both Trinidad and Tobago.” He will provide further details in the ongoing budget debate in the House of Representatives and in the Senate .

In his budget presentation on October 5, the Finance Minister announced that all NP gas stations will be offered for sale to the private sector, with first preference given to existing dealers and concessionaires. This initiative was part of the strategy to liberalise the local liquid fuel market.

“We are now ensuring that the pricing model will put the retailers on a self-sustaining and profit-oriented basis.”

Chairman Shahid Hosein said NP will follow the government’s instruction to sell the stations and the sale depends on the availability of “reliable retailers.”

NP has no loans and never asked the government to bail it out. The cost of a station is upwards of $15 million in infrastructure alone. There was a major drive to upgrade stations, including CNG, to build new stations and to improve the infrastructure. The company asked the government to liberalise the market to assist NP, because the government fixed margins and fixed prices at the pump,

Opposition leader Kamla Persad-Bissessar, responding to the 2021 Budget, queried if gas station sales spelled closure of NP, which owns 73 of 113 gas stations and whose management amounts to 70 per cent of NP businesses and most of its profits.

Petroleum dealers liberated as State divests

Petroleum Dealers Association (PDA) described the long- overdue divestment of gas stations operated by National Petroleum (NP) as liberation from total dominance of the SOC. President Robin Narayansingh said Government offered assistance to existing occupiers to purchase stations.

“The dealers needed security of tenure.” When NP operated the stations, the title was vested in its name and its executive decided how the operation was run. The dealers made personal and financial sacrifices. “Petroleum dealers now have a vested interest… You have a vested interest when you own something and you can make a proper offering to your community.”

Without a supply agreement binding them to NP, dealers are now in a position to deal with any fuel supplier when they purchase the property.

“So, we’re not sure how this is going to work out and we want to know if NP wants to engage the PDA in ironing out a supply agreement with the dealers. You want stability in the country so people could get fuel to do their business, you want proper agreements, you want clarity in the way business is done.”

The fuel subsidy ends in January, as announced in the budget. Dealers will be able to set their own margins. Current margins on fuel are six per cent, which can be challenging to dealers when financing and labour costs are added.

“We would have to figure out a proper margin but it wouldn’t be more than ten to 25 cents per litre extra, so there’s nothing to say it would be exorbitant, because people have been talking about price gouging, and this might go down depending on what the wholesale price of fuel is…There are good people and bad people. Even with an agreement to the price, each dealer would set their own price point; competition will benefit the consumer.”

Cost of a gas station would vary depending upon whether it was being built from scratch or was an already existing facility.

“If you’re building one from scratch, you have to look at the value of the land, the age and type of equipment being installed, and labour costs for operationalisation. If it’s an existing facility, there are a lot of tanks that need changing, so those would be cheaper; if tanks were changed it would cost more, depends on where we are in value chain and also the location of the gas station.”

Addressing concerns about cartels formed to fix gas prices, Narayansingh said under the Petroleum Act, the energy minister alone can grant a licence for operation of a gas station. The ministry will conduct background checks to decide which applicants were suitable operators of a station. The current licence fee is $4,000 for a large-volume station, $2,000 for a medium-volume station and $1,000 for a small-volume station. Liberalising the fuel market will change the landscape and make dealers more interested in their business.

“They will get more products to offer to the community, it’s a big move for the gas station industry. I want to allay any fears that people may have. Petroleum dealers are responsible people…As long as there is a proper supply of fuel, the gas station dealers will always be there to provide that service to the nation.”

Dealers applaud divestment

Petroleum Dealers Association head Robin Narayansingh confirmed the proposed sell-off of NP service stations will hugely incentivise current franchisees to become owners, to diversify their products and become more committed to their stations.
“This is very welcome news to the petroleum dealers. It took the Finance Minister to do what several people had promised to do many, many years ago. This will bring a certain sense of security to these people. This is such welcome news for the survivability of gas stations. You will see the landscape of TT change in dramatic ways, to see private enterprise at its best.”

He alleged dealers had been treated with contempt by NP and then felt marginalised.

Liberalisation will increase the diversity of products offered across stations. While any group will include rogue elements, in the grand scheme of things the liberalisation was something to look forward to.

“Dealers will welcome this news from the Finance Minister. It will give them more reason to work hard and provide service to their community they serve. They will have property which they will shape into the way they want it for their community. Every gas station has its own peculiarity. If you are in a fishing area in Cedros the items you would want to carry in your station would be different to the one if you were in a station in downtown Port of Spain. Gas stations will want to sell different things to increase their survivability and to become a more community-based organisation. “It will bring more camaraderie to the dealers.”

PDA must immediately launch a company on the Stock Exchange to create a shareholding democracy for the public to trade in an asset citizens own. .

NP chairman Shahid Hosein said its board will follow Government instructions to sell off its stations which will depend on whether reliable retailers exist.

“The minister made the point that throughout the world you have a very liberalised fuel sector. There is already a private company operating, Unipet.”

This sell-off would not be the end of NP, which will still supply LPG cooking gas, ultra fuel, aeroplane fuel and fuel for ships.

“If the physical assets of the gas shops are sold, NP does not cease to exist.”

“That is not something that just dropped out of a hat. It’s part of this whole issue to liberalise the industry and the pricing more in keeping with market pricing.”

The sell-off was tied to the issue of fully removing the fuel subsidy and the price should be affordable for citizens as owners of the state asset.

 

Refinery – gas station on the beach

After a US$700 million bid for the Guaracara Refinery Co Ltd and the Paria Fuel Trading Co Ltd, the Oilfield Workers’ Trade Union won the tender to own and operate the refinery. OWTU intends to create a “gas station on the sea” and reduce the carbon footprint when Patriotic Technologies and Energies Co Ltd acquires the iconic Pointe-a-Pierre refinery.

Government gave Patriotic until the end of October to sign off on the deal or lose it. At the post-budget forum, the union was optimistic about the acquisition. Panellists included economists Dr I. Sagewan, H. Blades, D. Abdulah, United Farmers Association president S. Khan, S. Webb and M.Pierre . Reacting to the ultimatum from the Finance Minister presenting the 2020/2021 budget, the company said it did everything it was required to do. It is up to the government and technical team from the TT Petroleum Holding Company to close the process.

The country was in a state of turmoil, with workers on the breadline, unattractive gas prices causing the shutdown of user plants, the retirement age being reviewed upwards, freezing public sector employment, implementation of the property tax, removal of tax concessions on private vehicles, the sale of service stations and freeing up of gas prices. Patriotic, with the promise of 4,500 jobs, was one of the saving graces. Not only will jobs be created and workers pay taxes, it will be a major foreign-exchange earner. Geographical proximity to the Panama Canal and the passage of international vessels give it this impetus.

“We can become the ‘gas station on the sea,’ where we can sell bunker fuel directly and pay for it in US dollars.”

In 2014, under the People’s Partnership government, when this was done, “Petrotrin used to make US$42 million in foreign exchange every month from bunker fuel sale.”
That can be done again with plans to increase productivity when the refinery is restarted and to reduce the carbon footprint.
“When we start up the plant, it will have no waste. We will recycle all the emissions that come out of the refinery and recycle it back into the refining process.

OWTU and others were disappointed by how the Finance Minister addressed the refinery deal in his budget presentation, blaming Patriotic Energies and Technologies for the delay when they have been appealing for the closure of the deal for months.

The Minister said Patriotic has until October 31 to reach an agreement on the sale of the Pointe-a-Pierre refinery.

, “With Heritage Petroleum Ltd focusing on ramping up oil production in a cost-effective manner, the government is currently engaged in protracted discussions and discussions with Patriotic, with a view to satisfyingly concluding a sale and purchase agreement of Pointe-a-Pierre in the interest of all concerned, in particular – the public interest. If a viable or practical agreement cannot be reached by then after giving Patriotic “all possible opportunities to finalise the terms of the agreement,” the deal will be off and the government will consider “other options.”

OWTU asked for the deal to be signed off since July and requested it be closed before the August 10 general election. The Prime Minister described the arrangement as a “beacon of hope.”

OWTU said “It cannot be a Patriotic issue. Back in August… we were ready and wanted to close the process by election. And… the Minister of Energy said they will not be bullied…. they won’t be bullied in August, but now… it sound as though it is a Patriotic issue. If they are having some challenges, then they need to say so. We are ready and we have been ready since before elections. There is no other option.”

There is a disconnect between policymakers “and the material conditions of ordinary-working people on the ground.” Supporters say it was “unfair” to suggest Patriotic was to be blamed. “Who is keeping it back? The government is trying to suggest Patriotic, and I don’t know that to be the case. The issue is really the confusion of what are the problems in concluding the sale.”

OWTU said “We are ready to go…..our foreign consortium partners are also elated that a deadline has been given. We’ve been ready to sign since May, July. … called for the deal to be closed before the August 10 General Election. So we’re glad of the urgency now ..We see the.. announcement in a very positive light and we’re also happy that ..business groups are expressing interest .. since this means it’s recognized this purchase will benefit T&T.”

Patriotic is now awaiting the Assets Purchase Agreement setting conditions for the company to satisfy, including conditions under which the sale will be done. The document will state Government’s agreement on selling. A government team went to work with Patriotic on aspects of the Asset Purchase Agreement. Attorneys for Patriotic and the state were dealing with this. The Energy Ministry confirmed documents were exchanged and the state has to respond to Patriotic on its submissions.
Once the agreement is signed, Patriotic’s international partners are on standby to provide all conditions required by the agreement, and parties can then move to closure in a short space of time….”Having satisfied all conditions which we’re ready to do. We’re on course with our part to ensure it comes through. When that happens we’ll begin mobilization to put people to work in the refurbishment exercise where foreign exchange will be injected via this process even before the refinery starts.”

The refinery has deteriorated over time. “Repairs will be necessary as we have to ensure the refinery is refurbished and provides reliable service to run for some time before the turnaround begins since we have to guarantee local and foreign customers reliable fuel supply.”
Major repairs will cost half a billion US dollars, “And that’s where small, medium and large contractors and other businesses will benefit – scaffolders, engineers, electricians, refurbishment of assets on location. We project 4,500 will be involved in the refurbishment including tank work – we’ll be putting a new face on the old Petrotrin.. part of T&T history.”
“.. 4,500 people will be paying taxes … a boost for the economy. And we’ll be reintroducing an apprenticeship pool to train people also.
The new company will be run by an expert foreign management team – not the union.
“That team has the competency in refinery acquisition and running turnaround operations. There will also be people from Patriotic understudying the system also but the bulk of the workforce – labourers, welders, fabricators, scaffolders etc- will be drawn from local numbers.”

Patriotic’s foreign partners have factored in the impact on the project of decreased demand for oil/energy supply following the COVID-19 restrictions on global movement.
“There’s still a strong appetite for this project even with reduced demand.. Government should facilitate an amicable closing of this major undertaking which can assist many areas including local business.”
With attorneys handling the process, Government should “stay true to the commitment to make those assets available as per the repeated commitment by Finance and Energy ministers and others – this can work. We’ve satisfied criteria since the process began. Our foreign partners have acquired refineries all over the world. They’re highly competent.”
The consortium is reported to comprise UK , US and other experts in legal, financial, market and refinery acquisition.
National Trade Union Centre said the agreement is “an opportunity to demonstrate that local people can and will be able to operate industries. …. for us as a people to own a big chunk of part of our economy. So every effort should be made to ensure we enter a reasonable deal. … the government came out of the deal with the basis that Petrotrin was losing money… if we understand that … if Petrotrin can be restructured like all the reports say, then it is an opportunity … to show we have the ability.” The budget was one of “economics and numbers” and not people-centred
Plugging the lifeblood of Pointe-a-Pierre, the Petrotrin oil refinery, two years ago destabilised its shaky economic growth and residents anxious await plans for re-development. New infrastructure projects are on hold, including the La Brea drydock, Point Lisas tech park and San Fernando Waterfront which can absorb the excess capacity after closures. Anil Ranjit of Gasparillo Chamber of Commerce recommended that Government pump liquidity into the SMEs in the communities hit with a double blow as recovery seems far-fetched. “… there needed to be some cash injections into the businesses. The problem is that people do not have money…The closure of Petrotrin hit us hard. We are on the verge of being de-industrialised because our last negotiated gas price was exorbitant. We now have serious competition in the market as Guyana and Suriname emerge in the energy sector.”

People dread further decreases in incentives and social help, as well as increases in taxes and the introduction of new taxes such as the property tax. Petrotrin was their lifeline and .. talks about the sale of the refinery to Oilfield Workers’ Trade Union (OWTU), .. seemed to only be an election gimmick. He wished they could restart the refinery. It would save on foreign exchange buying fuel and could generate foreign exchange with sales. It wouldboost incomes and at least 50 per cent of the previous employment load could be re-hired. Something good could happen if it restarts.

From San Fernando to Claxton Bay citizens were highly dependent on the oil refinery, operating for 101 years. It was closed in 2018,with the direct loss of almost 5,500 jobs. Bordered by the Naparimas, Marabella and Gasparillo, livelihoods, including small and medium enterprises from restaurants to energy services companies were devastated. Business relief grants promised in the 2019 budget never materialised.

More incentives are clearly needed in the energy sector to encourage competitiveness, increase exploration, production and downstream growth. Government hired UK firm Gas Strategies to study the gas value chain as the country, now a marginal ammonia and methanol producer must bridge the down cycle to avoid the risk of being rationalised in favour of other producers.
Solutions include Reduction in imports, beginning with cutting food Imports, targeted PPP arrangements for infrastructural development, leveraging of idle capacity in the public sector, activation of . sponsored parks eg E-idcot, Eteck, increase of non-energy earnings using the Exim Bank, ExporTT and other partnerships, rationalisation of transfers and subsidies, focus on innovation and entrepreneurship and immediate divestment of state assets.
“In the longer term, the work that is being led by the Ministry of Energy and Energy Industries (MEEI) and Gas Strategies with the full collaboration of the various players along the Value chain should serve to be transformative to the Energy sector assuring the sustainability of the Sector and that the Chain is investable by all participants along the Value Chain,”
With the Gas Value Chain in peril, competitiveness in the downstream gas sector may be achieved in the following ways-

• seek opportunities in the regional energy market, including small scale LNG, to support the transition from heavy fuel oil and diesel. Atlantic LNG may need Infrastructural changes.

•seek access to and sharing of underutilised common gas transportation and processing infrastructure to optimise costs

• ensure effective management of capacity and gas supply across Trinidad and Tobago.

• continue development of competitive and competent local content.

• explore opportunities to optimise and efficiently process available gas volumes and to reduce GHG emissions, creating value and responding to a changing global regulatory environment

The Refinery a wasting asset, once deemed viable, must be returned to service as quickly as possible. With a potential investor identified, it is in the interest of shareholders and citizens that the deal be concluded. Given that much work has already been completed, the transaction must be executed with urgency. A firm timeline must be established with appropriate milestones. . In the event that the transaction is unable to be closed, an alternate investor should be sought that utilises Private Sector capital to fund the refinery re-opening.