Heritage, EOG sign Gulf of Paria oil exploration deal

HAILING a new deal for EOG Resources to explore for oil in the Gulf of Paria in a 14,000 hectare area owned by the State-run Heritage Petroleum Company, the Prime Minister urged more drilling in both sea and land areas so as to boost the national coffers. Dr Rowley addressed the signing ceremony between EOG and Heritage on Wednesday at the latter's office in Port of Spain.

The area is in the southern part of the 97,000 hectare Trinidad Northern Areas (TNA) Block which the Ministry of Energy last month licensed to Heritage, which has a 35 per cent participating interest, while EOG has 65 per cent, according to a Heritage statement. The first exploratory well is expected this year.

Rowley said the TNA is still prospective, although its Main Field production fell from 43,000 barrels per day (bpd) in 1963 to 3,600 bpd today.

With East and North Soldado respectively producing 5,300 bpd and 5,200 bpd, he said the Jubilee, Central Soldado, South West Soldado and Chilaca Fields have much potential, based on the TNA's rich dataset of 984 wells and much past seismic exploration.

Rowley lamented the 2012 iteration of the South West Soldado project under a past administration where a contract was improperly awarded to a Mexican firm, with US$1.25 million paid for a vessel that never materialised. The taxpayer lost US$750,000, which allegedly turned up in two private bank accounts in Maraval, putting a financial strain on Petrotrin.

With the project revived last year, he said production had risen from 1,663 bpd in 2018, to 2,927 bpd last year, and was set to rise to 3,323 bpd next year.

Rowley said the fact oil was still produced and that acreage remains to be explored were testaments to the size and quality of these oil reservoirs.

"Within the Gulf of Paria, outside of the Soldado Field areas, the Jubilee Field is another area of interest for Heritage, located five kilometres offshore of Point Fortin.

"Heritage is in data room discussions with several potential partners."

He hoped an evaluation of proposals by year-end, would birth another signing ceremony.

"With respect to onshore production, efforts also need to be focused on increasing production on land, because it is onshore production that creates greater levels of employment when compared to offshore production, and generates a product with a higher local value-add.

"In this regard, I would like to see Heritage expand its lease operatorship programme and undertake a land drilling campaign of its own."

Rowley hailed Heritage's stellar performance.

"In its short existence, Heritage was able to increase liquids production to an average of 35,000 bpd in 2020, from Petrotrin’s 2017 production levels of 21,500 bpd.

He said Heritage now spends only US$28 per barrel to extract oil, compared to US$35-38 under Petrotrin.

"With the combination of increased production and reduced costs, it comes as no surprise that Heritage has been able to turn a profit in its first two years of operation, to the tune of $1.4 billion and $884 million for financial years 2019 and 2020 respectively, whilst contributing almost $2 billion in taxes and royalties to the State."

He said Heritage was achieving its vision to be world-class and had found an equally nimble, innovative and resilient partner in EOG.

"Last year, EOG spent just over US$100 million in capital expenditure in TT, and the impact of such expenditure is not lost on us, especially as we witness the changing tides in the energy industry, and the shifting priorities of major international energy companies."

"I wish both parties the greatest success in your joint venture, and given the track records of both Heritage and EOG, I expect no less."