Young: Talks in final stages on deep-water bid rounds

IN House of Representatives, Energy Minister Stuart Young said on Wednesday that delays in negotiations over the country's deepwater bid rounds were due to changing market conditions and technical factors, some of which were favourable to TT and some not so.

He was replying to a listed question by Pointe-a-Pierre MP David Lee.

Young said on June 2, 2022 at the close of bids for the 2021/2022 deep-water bid round his ministry had received bids from a consortium of BP, EOG and BG (a Shell subsidiary) on four deep-water blocks - 23(b), 25(a), 25(b) and 27.

"Following the evaluation of the bids, an inter-ministerial team was appointed by Cabinet to negotiate with the bidders acceptable terms for the award of production sharing contracts on the four blocks.

"It was projected that the evaluation of the bids would be completed within three months. However, the technical and commercial considerations associated with deep-water exploration and development have led to lengthy negotiations.

"On one hand, improved viability of deep-water and tightening supply-demand gaps are driving the market.

"This is balanced by volatile crude oil prices, instability in the oil and gas industry, and higher challenges in developing deep-water prospects."

Young said in this scenario the parties were seeking to arrive at equitable terms that will accrue to the mutual benefit of Government as resource holder and the bidders as key stakeholders and investors in TT’s deepwater province.

"The negotiations are in the final stages and the report and recommendations of the inter-ministerial team are expected to be submitted shortly for the consideration of Cabinet, following which, an announcement will be made on the outcome of the negotiations."

Lee, in a separate question, asked if the NiQuan plant at Pointe-a-Pierre was operational, whether the company was paying taxes, and how much natural gas it has purchased.

The principle of the gas to liquids process used at NiQuan is to convert natural gas (composed of short carbon chain molecules) into synthetic liquid fuels such as gasoline or diesel (composed of longer carbon chain molecules.)

Young said NiQuan was producing although previously the plant had been down for some time.

"NiQuan’s plant is operational and has produced products for commercial sale. The company has transferred on-spec products to the storage tanks of Paria Fuel Trading Company Limited, NiQuan’s off taker, to make up a cargo for sale by Paria on the international market.

"The NiQuan plant is currently down for works intended to improve plant performance and is expected to be up towards the end of the month as gas is supplied."

He said NiQuan paid no taxes for April 1, 2021 to December 31, 2022 as it generated no revenue during the period.

"The company is currently building up a cargo for sale by Paria on the international market.

"The NiQuan plant was down for one year from April 2021 and recommenced operations on May 28, 2022.

"(Natural) gas purchases during the period May 2022 to February 2023 varied between 129.04 million cubic feet (mmcf) per month to 631.43 mmcf per month."

Lee in a fresh question asked about Young's visit to Caracas in March to negotiate over the Dragon gas field.

Young replied, "The members of the Venezuelan Government who were present at the negotiations included Mr Pedro Rafael Tellechea, president of PDVSA, Mr Juan Santana, PDVSA Gas president and Ms Annabelle Rivas, legal adviser, PDVSA.

"The Government continues to be in active negotiations with the Government of Venezuela on the development of the Dragon gas field."