Government bets on Grenada's Nutmeg gas field

The new Kamla Persad-Bissessar-led government has abandoned the dragon deal and announced plans to go to Grenada, Guyana and Suriname to fulfill its promise for TT energy security.

Among those plans, the TT Government is eyeing the Nutmeg field, a relatively unexplored oil and gas reserve discovered about 100 km south west of the island just inside the Grenadian border, in 2017.

The Nutmeg field was located at a shallow depth, about 180m, by the Nutmeg 2, an exploration well that was sidetracked from the Nutmeg 1. The reserves are believed to have gas trapped in the Miocene reservoirs – a rock formation made of sandstone and carbonate rocks.

The same year the field was discovered, Grenada sought to incentivise foreign investment by passing hydrocarbon incentive laws.

This isn’t the first time the government and state-owned enterprises have engaged with Grenada on the possibility of collaboration in regional oil and gas.

In 2012, during the People's Partnership administration, TT and Grenada signed an memorandum of understanding to advance joint exploration and exploitation of hydrocarbons in the maritime areas between the two countries.

Then TT energy minister Kevin Ramnarine and Grenadian finance and planning minister Nazim Burke signed that agreement. The agreement would have seen collaboration on development and implementation of technical programmes, projects and activities between the two islands, as well as joint seismic surveys, joint exploration projects, joint development plans for unitisation of hydrocarbon reservoirs and joint bid rounds.

In 2018 under the PNM-led government, the National Gas Company (NGC) finalised a commercial agreement with the sole operator of the Nutmeg gas field, Russian-based Global Petroleum Group (GPG).

The deal would see that NGC has first preference for the purchase of any natural gas discovered in the Nutmeg field. In return, NGC would use its existing infrastructure, similar to what it planned to do for the Dragon gas field, to aggregate and produce natural gas for the downstream.

But, as sweet as the deal sounds, there have been some issues.

In 2017 after GPG made the discovery, the well was plugged and abandoned without testing, which means that there isn’t much information on the actual content, quality or quantity of oil and gas reserves in the field.

GPG ran logs at depths of about 2,742 m and lower, which resulted in the there being indications of gas being found while drilling.

However the Nutmeg 2 was also sidetracked because of technical problems.

In 2019, Grenadian energy minister John Ogiste said a US-based Chinese company had partnered with GPG to develop the infrastructure that would allow for the development of that resource.

Ogiste said in 2019 that the infrastructure for the well had not yet been defined. He said the company would have to drill three more wells to determine where the production well should be positioned.

Last year GPG signed an agreement with Nigerian-based oil and gas company Oceangate. The deal involves a production-sharing arrangement with Grenada’s government for 38 years. The deal covers about 7,500 square km of offshore zones.