I read with interest a recent newspaper article which reported on Petrotrin's desire, as stated by its president, Khalid Hassanali, to explore for oil in Guyana and French Guiana. The article also quoted former energy minister Conrad Enill as saying that Petrotrin should put its house in order locally before branching out and that then it should look at Ghana, not Guyana and French Guiana, as Ghana offered more opportunities than the other two countries.
I do not want to go into the merits or demerits of what these two gentlemen have said. Rather, I want to suggest that just looking at what Petrotrin alone would like to do is like standing too close to the trees to see the forest. We must stand back to look at the whole picture. How do we do that?
First there are a few questions we must ask ourselves as a country. They are as follows:
• Should we consider investing in oil and gas opportunities outside of Trinidad and Tobago?
• Should we increase our investments in oil and gas opportunities within T&T other than within the current Petrotrin acreages?
If the answer is yes to one or the other or to both (I firmly believe it should be both), then we need to ask ourselves what our goals are and how we can set about achieving those goals as a country.
After we set goals we can look at the opportunities and/or potential opportunities. What should our goals be regarding further investments in the oil industry? Perhaps we could set a production or reserve goal within a certain time frame. For instance, we could say we need to acquire or find reserves of one billion barrels of oil and/or ten TCF of gas in (or every) five years. We can then look at finding/purchasing benchmarks and use those to set our budgets.
We also need to look at both domestic and international theatres and decide strategically where we should invest and why.
Where should we look?
Are there opportunities locally?
The answer is yes, from time to time.
We do not need to look at exploration as Petrotrin, as a matter of course, is granted a carried interest by the state in most production-sharing contracts.
Sometimes opportunities arise to purchase producing assets. These are low hanging fruit that ought to be picked. For example Total, the French multinational, announced earlier this year that it was selling its assets in T&T.
These assets include a 30 per cent stake in the Angostura Field which currently produces 12,205 bopd and 232 MMCFGD (October 2012).
I believe it makes absolute sense for T&T strategically to seek to acquire these assets from Total. (I understand the state through NGC has in fact made a bid for the Total assets. I wish them/us luck.)
Opportunities also arise outside of T&T. And they are not restricted to exploration. From time to time opportunities arise to purchase producing fields or interests in new discoveries. (For example, Premier Oil just purchased a majority interest in a 1.2-billion barrel oil discovery in the Falklands)
There are also almost always exploration opportunities.
Mr Hassanali has suggested Guyana and French Guiana as exploration areas. Mr Enill suggested Ghana as opposed to Guyana and French Guiana and gave reasons.
My belief is we should look at all three. But I also suggest that we should not limit ourselves to these three. We should look at all areas worldwide, choose those in our best strategic interests and look there for opportunities.
And there are opportunities out there. For example, huge quantities of gas (some 150 TCF) have been found in Mozambique and Tanzania. These countries have ambitions to do just what we have done with our natural gas.
Is there an opportunity there to buy into those assets and then help these countries to monetise them? I suggest we develop a strategic plan to look at these and other opportunities, choose an executing agency, give them the resources and the authority to execute and set them loose.