Trinidad and Tobago has been involved in the petroleum sector for over 100 years and is the largest oil and natural gas producer in the Caribbean.
However, by the early 1990s its hydrocarbon sector moved from being primarily an oil-based economy to a mostly natural gas-based sector with the construction of the LNG trains at Point Fortin.
The energy sector accounts for around 32 per cent of the country’s gross domestic product (GDP).
In Finance Minister Colm Imbert’s October 2, 2017 budget he said, “Despite the challenges posed by the low price environment, the energy sector faces a very positive outlook based on a number of new gas projects which are scheduled to start production over the next two to three years.”
He said a new tax regime would also be introduced to provide incentives for increased exploration and production that should set the stage for increased oil and gas output.
Oil production for the first five months of 2017 had levelled off at 73,500 barrels per day (bpd), the minister had said, as compared with 73,800 bpd for the corresponding period of 2016, although this amount was well below the rate of 100,851 bpd in May 2010.
The 2018 budget was pegged on an oil price of US$52 and a gas price of US$2.75 per mmbtu.
On May 8, Bloomberg was reporting that Brent crude, the main international benchmark, was trading at US$73.44 while WTI crude, TT's benchmark, was trading at US$68.29. Natural gas was down slightly to US$2.72 mmbtu.
Five months into the 2018 fiscal year, Energy Minister Franklin Khan presented the first public account of the energy sector at the Hyatt Regency, Port of Spain on March 14. His presentation was themed Our Oil, Our Gas, Our Future.
He said TT continued to be an important oil and gas producing hub and cited the major multinational energy giants which continued to maintain a presence in the country, such as bpTT, Shell, BHP, EOG Resources and Perenco.
He said the upstream companies had committed to spend over US$10 billion in exploration and development activities over the next five years, with the effects already being felt as of December 2017. Natural gas production, which had fallen to 3.2 bcf/d per day had reached a daily production of 3.8 bcf/d.
The US$10 billion is expected to be spent on capital goods such as rigs, sub-sea equipment, seismic equipment, platforms, turbines and pipes with the exception of platforms.
The investments include the BP Angelin project, which is due to come on-stream in 2019 and is expected to provide in excess of 550 mmscf/d.
The other projects include De Novo energy exploration of Block 1 (a) off Trinidad’s west coast; the East Coast and North East Coast development projects of Shell, such are Starfish, Dolphin, Dolphin Deep, Endeavour and Bounty fields, and the Cassra and Orchid on the North East Coast.
BHP has also announced a deep-water natural gas discovery in Block 5 on the East Coast, with preliminary assessments indicating between five to ten tcf of gas with a high probability of oil.
Approximately nine exploration wells are expected to be drilled, including three deep-water wells.
Khan said TT’s gas reserves, based on the last Scott Reserves audit, were 22.7 tcf and gas resources were estimated at 43.7 tcf.
He said the audit information did not include the gas finds of the BHP discovery in Block 5 or the BP Savannah and Macadamia fields of 2 tcf.
“Our gas reserves are consumed at the rate currently estimated at 3.5bcf/d or 1.2 to 1.4 tcf per annum,” he said, adding this was divided between LNG production (60 per cent) and the downstream industries including power generation, which consumed 40 per cent of the gas supply.
Currently 99.8 per cent of power generation is fuelled by natural gas and 0.2 per cent by diesel.
He said data from the Ministry of Energy and Energy Industries and the Ministry of Finance reveal that taxes and royalties collected from the sector have been on a downward trend.
He said energy sector revenue, which peaked at $28 billion in 2008, fell to $1 billion in 2017 and cited falling energy prices as playing a part for the reduced revenue.
According to the Ministry of Energy, TT’s 2017 crude oil production stood at 71,824 bpd while its refinery output at Pointe-a-Pierre is 135,000 bpd.
The country’s proven oil reserves is 199.54 million barrels, while probable reserves are 85.46 million barrels and possible reserves are 124.77 million barrels.
Natural gas production is currently 3.4 bcf/d with proven reserves standing at 43.45 million barrels; probable reserves at 24.39 million barrels and possible reserves at 30.83 million barrels.
Meanwhile, State-owned oil company Petrotrin has identified the South West Soldado Field Development as one of the most immediate opportunities for increasing indigenous crude oil production.
The project, which is divided into three phases, is currently in its first phase of execution, which includes the installation of a temporary compression and production facility, drilling of eight new wells and the reactivation and workover of inactive wells.
The first phase also includes the installation of a new gas sales pipeline; installation of additional infrastructure and submarine pipelines to accommodate the increased production of fluids (inclusive of gas lifting capability for the reactivated wells) and the installation of replacement main oil bulk line from RP10 to RP1.