BHP finds hydrocarbons

BHP encountered hydrocarbons in its Bélé-1 exploration well offshore Trinidad & Tobago.

The Bélé-1 exploration well is located in Block 23(a), where BHP is the operator with a 70% interest. Water depth at the site is 2,102 meters.

In an operational review BHP said that, during the March 2019 quarter, the Transocean-owned Deepwater Invictus drillship had mobilized to Trinidad and Tobago for Phase 3 of the company’s deepwater drilling campaign.

This includes three wells testing three prospects in the Northern licenses around the Bongos discovery, which is located in Block TTDAA 14.

Bélé-1, the first of these wells, was spud on March 2, 2019, and encountered hydrocarbons. Drilling is still in progress and assessment is ongoing. Total well depth is expected to be 3,693 meters.

According to Transocean’s latest fleet status report in February, the Deepwater Invictus ultra-deepwater drillship contract with BHP off Trinidad is set to end in May 2019. After that, the rig is scheduled to work for BHP in Mexico until October 2019. Later, the rig will move to the U.S. Gulf of Mexico for more work with BHP, which is scheduled to end in May 2020.

Phase 2 of deepwater exploration drilling campaign off Trinidad & Tobago included drilling the Victoria-1 exploration well, which further assessed the commercial potential of the Magellan play in the Southern license area in Trinidad and Tobago, encountered gas and was plugged and abandoned on July 18, 2018.

Following the Victoria-1 well, the Bongos-1 exploration well was spud on July 20, 2018, and experienced mechanical difficulty shortly after spud. The Bongos-2 exploration well was spud on July 22, 2018 and encountered hydrocarbons.

The Bongos-2 and Bongos-1 wells were plugged and abandoned on September 23, 2018, and September 26, 2018, respectively. Following the Bongos-2 well, the Concepcion-1 well was spud on September 30, 2018, to further test the Magellan play and is currently drilling ahead.

Offshore Energy Today Staff

Heritage makes half billion in four months

The com­pa­ny told in­vestors that it has been prof­itable up to March 2019, after it lost $25 mil­lion in De­cem­ber 2018, the first month of its op­er­a­tions,

Ac­cord­ing to unau­dit­ed fig­ures, last month alone the com­pa­ny made an af­ter-tax prof­it of $222 mil­lion.

The fig­ures did not in­clude a break­down of the tax­es paid and it is uncer­tain if all tax­es owed to the Gov­ern­ment were paid, in­clud­ing Sup­ple­men­tal Pe­tro­le­um Tax­es(SPT) and Pe­tro­le­um Prof­its Tax (PPT).

The Fi­nance Min­is­ter Colm Im­bert announced that Her­itage was ex­pect­ed to make its first roy­al­ty pay­ment to the Gov­ern­ment and the Chief Ex­ec­u­tive Of­fi­cer Mike Wylie told in­vestors that Her­itage was ex­pect­ed to pro­vide 8.7 per cent of Gov­ern­ment rev­enue.

Wylie said with suf­fi­cient in­vest­ment and prop­er man­age­ment the com­pa­ny will be able to gen­er­ate cash flow to cov­er its bills and re­pay the debt of lega­cy com­pa­ny Petrotrin.

Her­itage has sig­nif­i­cant re­serves and pro­duc­tion, with sig­nif­i­cant up­side po­ten­tial. “As of Sep­tem­ber 30, 2018, lega­cy Petrotrin had 223 mil­lion bar­rels of oil equiv­a­lent in proved and prob­a­ble oil and gas re­serves (2P) this is bro­ken down in­to 143.7 mil­lion bar­rels of oil equiv­a­lent in proved re­serves of which 110.9 boo/e is de­vel­oped and pro­duc­ing and 15.7 mil­lion are de­vel­oped non pro­duc­ing while 17.1 mil­lion bar­rels are un­de­vel­oped,” Wylie re­port­ed.

Based on to­day’s prices and with a dis­count­ed rate of 10 per cent, it is es­ti­mat­ed that the proven re­serves of Her­itage are val­ued at US$1.6 bil­lion while the proved and prob­a­ble re­serves com­bined are worth US$2.3 bil­lion.

Low rates of re­cov­ery are be­low in­dus­try stan­dard and over the years this has left hun­dreds of mil­lions of bar­rels of valu­able crude in the ground.

“Based on our es­ti­mates of Her­itage ex­ist­ing land as­sets we have over 4 bil­lion bar­rels of re­main­ing oil in place. With av­er­age re­cov­ery rates to­day of 20 per cent, we be­lieve these as­sets en­joy sig­nif­i­cant up­side po­ten­tial that can be tapped by cor­rect­ing in­ef­fi­cien­cy in the de­vel­op­ment and pro­duc­tion,” the CEO re­vealed.

The com­pa­ny had ma­ture and high­ly-pre­dictable as­sets that will al­low it to de­vel­op more re­serves with the rel­a­tive­ly low cap­i­tal re­quire­ment. It had tak­en ma­jor steps to im­prove its ef­fi­cien­cy and was ex­pect­ing to op­er­ate with a quar­ter of the staff that Petrotrin had in its E&P op­er­a­tions.

Her­itage will im­ple­ment glob­al best prac­tices to en­sure it achieves its goal as a ma­ture field, low-cost pro­duc­er.

He point­ed to a num­ber of mea­sures that will quick­ly boost pro­duc­tion and re­serves. There was a need for greater field de­ple­tion plan­ning on the part of Her­itage, which will lead to the bet­ter use of mon­ey and the abil­i­ty to re­cov­er more oil and gas.

He said: “We be­lieve that field de­ple­tion plan­ning will re­sult in both an in­crease in cap­i­tal ef­fi­cien­cy and re­source re­cov­ery.”

With re­spect to work over pro­grammes, Wylie is promis­ing an in­crease which will im­prove pro­duc­tion rates by 10 to 20 per cent by re­duc­ing scant and clean­ing out well bores on pre­vi­ous­ly iden­ti­fied high op­por­tu­ni­ty wells.

This should lead to more ac­tiv­i­ty in the south of the coun­try which has been hit hard by the clo­sure of Petrotrin.

Re­cov­ery rates in oth­er ju­ris­dic­tions have been as high as be­tween 40 and 60 per cent when com­pared with the low of 20 per cent in T&T. With this in mind, the Her­itage CEO told in­vestors the pro­duc­tion po­ten­tial was sig­nif­i­cant.

“Through state of the art tech­nolo­gies, we be­lieve we can im­prove the yield. Her­itage will ap­ply a num­ber of tech­nolo­gies to en­hance yield, along with a more-dis­ci­plined cap­i­tal al­lo­ca­tion to fur­ther en­hance pro­duc­tion.”

3D seis­mic will be­come the norm and will help op­ti­mise in­fill drilling pro­grammes to max­imise re­cov­er­ies and in­crease re­cov­er­able re­serves. It will al­so re­duce risk in ex­plo­ration and de­vel­op­ment drilling.

En­hanced oil re­cov­ery is al­so part of the strat­e­gy with the use of wa­ter flood­ing. He es­ti­mat­ed that can in­crease re­serves by about 100 mil­lion bar­rels and re­cov­ery fac­tors by up to 35 per cent. Wa­ter flood­ing will be pri­mar­i­ly used in what used to be the Trin­mar as­set.

On the land fields, Her­itage plans to use steam in­jec­tion or wa­ter and chem­i­cal flood­ing. This would in­crease re­serves by be­tween 800 mil­lion bar­rels and 1.6 bil­lion bar­rels. To in­crease flow rates hor­i­zon­tal drilling will be done on land.

Last year’s earth­quake dam­aged some of the fa­cil­i­ties off­shore and the com­pa­ny is de­fer­ring ap­prox­i­mate­ly 2300 bar­rels of oil per day but work is underway to bring back up that pro­duc­tion.

He called for the use of best prac­tice in pro­cure­ment, in­clud­ing the use of in­ter­na­tion­al ten­ders and max­imis­ing the sale of its in­ven­to­ry, which he felt will im­prove.

One of the changes Wylie wants to see is a low­er lev­el on in­ven­to­ry which would free up work­ing cap­i­tal. The in­ven­to­ry of 1.6 mil­lion bar­rels was too high.

To re­duce debt and short term bor­row­ing, Wylie said Trinidad Pe­tro­le­um Hold­ings Lim­it­ed may sell sev­er­al as­sets, in­clud­ing de­vel­oped and un­de­vel­oped land, sports club, a golf course, and a hos­pi­tal.

Highest gas supply

National Gas Company (NGC) chairman told a TT NGL annual general meeting that GAS supply has improved considerably.

From 2013 to 2015, gas production diminished from 4.4 billon cubic feet (bcf) to 2.2 bcf and was “falling precipituously.” NGC was able to stem this decline by collaborating with upstream producers.

This resulted in 2018 being the highest year for provision of natural gas since 2013. Trinidad Onshore Compression Project, Juniper, Starfish and DeNovo fields played a role in exiting that trough. When bpTT’s Angelin field comes onstream later this year, , “That will help us in terms of replenishment and improvement.” The objective is to get gas production up to four bcf and then 4.2 bcf.

The latter figure is the level required for the LNG and petrochemical sector. NGC’s memorandum of understanding with Beijing Rheingau Investment Corporation provides a springboard for further energy collaborations in China, a market which has seen growth in LNG demands and imports.

Guyana has become a sweet spot for energy collaboration. By 2024, Guyana’s oil production could reach as high as 50,000 barrels of oil per day. Against this background, NGC felt it was important to leverage its expertise in Guyana. NGC is helping local energy service companies to establish operations in Guyana. Benefits of this initiative include “work for our own nationals and repatriation of our own income.”

Cuba and Suriname are other Caricom countries where NGC is exploring opportunities. Phoenix Park Gas Proccessors Limited’s (PPGPL) earnings grew by 12 per cent year on year with a profit after tax of US$92.1 million in 2018. PPGPL recorded an after tax profit of US$82.2 million in 2017.

TT NGL’s board of directors approved a final dividend of $1.00 per share, bringing the total dividend for 2018 to $1.50 per share. Discussions are ongoing with the Finance Minister for the dividend to be paid in US dollars.

National Energy signs agreement with Curacao agency