Energy giant BHP Billiton has taken a leap of faith in the potential of the country’s largely untested deep water acreages, committing up to investing US$1 billion to exploration.
“BHP Billiton is very optimistic about our business here in Trinidad and Tobago, as it remains an important part of BHP Billiton’s global petroleum portfolio. By entering this new deep water exploration phase, BHP Billiton has committed to over US$500 million for the first exploration phase and about a further US$500 million over the optional phases. We believe deep water, though largely untested in Trinidad and Tobago, has tier 1 potential,” country manager Vincent Pereira said on Day Two of the Energy Conference yesterday at the Hyatt Regency (Trinidad), Port of Spain.
Pereira said the company was banking on its belief in the “world class source rock” comprising the acreage, its relationship to the Orinoco River system and the great possibility that it holds significant traps of hydrocarbons.
He said the company will start its 3D seismic survey later this year, and will likely drill its first well in 2016.
In June 2013, BHP Billiton and the Ministry of Energy had signed production sharing contracts for five deep water blocks off the east coast of Trinidad—four of which (blocks 5, 6, 28 and 29) had been awarded to the company and its consortium in the 2012 Deep Water bid round—and a five-year extension of its existing Block 2 holdings.
Then, Pereira had said the four new blocks BHP Billiton had acquired spanned over 4,100 square kilometres—making its Trinidad holdings among the most significant in the company’s global portfolio.
“We know that there will be much interest about the potential production profile from the deep water acreage here; however, we will of course first need to complete a safe and successful seismic campaign this year.
We also know that there is much interest in confirming whether the deep water acreage is more prospective for oil or gas. We believe that deep water Trinidad and Tobago is a deposition environment similar to the Niger Delta and the Gulf of Mexico and some of the other bigger deltaic basins. However, only time will tell what type of hydrocarbons may exist in the acreage. Whether oil or gas is discovered, we will be looking for sufficient quantities to make any discovery commercially feasible,” Pereira said yesterday.
He added that the Trinidad and Tobago business also continues to feature a high level of focus on efficiency, with production efficiency in the last 12 months has an averaging 97 per cent. Further, since first oil in 2005 to date, the company has produced just over 102 million barrels of oil equivalent, he said.
In December last year, president of BHP’s petroleum and potash unit Tim Cutt, based in Houston, Texas, told US business news agency Bloomberg that the company was “very excited about Trinidad”.
“It’s a deep water play we’ve been watching for some time, but the fiscal terms weren’t very consistent with our ability to make money. The terms now are satisfactory,” he said.
These changes to Trinidad’s fiscal policy were noted by Pereira, who said commended the Government for making the industry more competitive.