Government awards two shallow-water blocks to EOG

ENERGY Minister Stuart Young signed the award of two production-sharing contracts (PSCs) for two blocks of shallow-water marine acreage for EOG Resources Ltd on January 29 at his ministry at the International Waterfront Centre, Port of Spain.

EOG Resources Inc is one of the largest crude oil and natural gas exploration and production companies in the US (also with proven reserves in TT) and aims to be among the world's "highest return, lowest cost, and lowest emissions" producers.

In a PSC, a company funds the activities of exploration/extraction of oil/natural gas while the Government retains ownership of the field. Revenues earned then pay to reimburse the company's exploration/extraction costs, with remaining profits then shared between the company and the Government.

The Ministry of Energy awarded Blocks NCMA 4(a) and Lower Reverse L to EOG, stemming from the Shallow-Water Competitive Bid Round 2023/2024, which ran from October 2, 2023 to May 27, 2024. This exercise had invited petroleum companies to bid for shallow-water blocks off the north, east and west coasts of Trinidad and the west coast of Tobago. Of the awards, one block is off the north coast of Trinidad and the other off Trinidad's south east coast.

At the signing ceremony, Young declared, “EOG continues to be very important to the fabric of the energy sector here in TT.

"We saw through the results of the shallow-water bid round and the operators are invested in TT."

He said his ministry must continue to ensure the relationship remained as it had been built to be, with open communication, so both parties could proceed to get more done.

In reply, EOG managing director George Vieira thanked the ministry's team for working with the company.

He said, “We appreciate all of the hard work that went into getting this done in a timely manner.

"The last time we signed a PSC was in 2005 so it has been a while – approximately 20 years ago – and we are excited to get this going.”

The ministry said the execution of the PSCs not only signified the potential for increasing TT's hydrocarbon reserves, but also ensured local development and economic growth through the payment of financial obligations by EOG to the Government for research and development, training of nationals and scholarships.

EOG had bid for three blocks – NCMA 4(a) and Lower Reverse L, plus Modified U(c).

The bids were evaluated by the Cabinet-appointed Technical Evaluation Committee and Overview Committee, both comprising senior staff of the ministry, the Office of the Attorney General, and the Ministry of Finance.

Cabinet approved EOG as the preferred bidder for Blocks NCMA 4(a) and Lower Reverse L, with notifications sent to EOG on August 23, 2024.

EOG accepted the ministry’s offer to enter negotiations on August 27, 2024 and talks began on September 11, 2024.

After negotiating mutually beneficial improvements to the PSCs, Cabinet approved the award of these contracts on December 18, 2024.

Block NCMA 4(a) is situated in the North Coast Marine Area (NCMA) in water depths of 100-200 metres.

"Entry into NCMA marks a significant milestone for EOG, as it ventures into an area predominantly operated by other companies," the statement said.

Block Lower Reverse L lies off Trinidad's south east coast of Trinidad in water depths of 80-200 metres. It is close to existing EOG infrastructure and existing producing assets.