Moonilal: New Heritage board to focus on ramping up production

ONCE appointed, the new board of directors at Heritage Petroleum Company Ltd will be instructed to ramp up production according to Energy Minister Dr Roodal Moonilal.

Delivering welcome remarks at the Society of Petroleum Engineers' Mature Basins Symposium at Cara Suites Hotel, Claxton Bay on July 1, Moonilal lamented the country's oil production had fallen since Petrotrin was shut down.

Comparing the figures, he said onshore and offshore production went from 21,387 barrels per day (bpd) and 21,468 bpd in 2015, respectively, to 9,667 bpd and 17,226 bpd in 2025.

"This trend needs to be reversed, and accordingly, the new Heritage board of directors will be mandated to develop a strategy for increasing oil production within the earliest timeframe."

He did not say when the new board will be appointed.

He said the state-owned oil and gas company Heritage, which has the largest onshore acreage, was responsible for the majority of the decline in onshore production.

"Heritage needs to make better use of its acreage, and one policy consideration would be a reassessment of how they partner with the lease operators and farmout companies."

Speaking to reporters after delivering his remarks, Moonilal said the lease operators and farmout companies can produce more oil but are being hindered by Heritage.

"One of the issues that has arisen is acreage that the lease operators, even at this early stage, they make the claim that they need more wells, they need more acreage. If you need more oil, you need more acreage and what has happened over the years, for some reason or another, and we'd look at that, Heritage has been reluctant to release acreage to the lease operators and farmout community and that is something that we'd ask the new board to look at.

"We believe if you drill more, you'd get more. We know the risk associated with it as well. It's risky business, but the more you drill, the more chance you have of finding oil on land. So we are exploring that. There are companies like Touchstone, for example, that are involved on land. We are hoping this would reap some benefits in the near term."

Newsday was unable to get a comment from the company on the minister's statements.

During his address, Moonilal said one of the measures proposed by Heritage to improve oil production, is the targeting of deeper horizons in its land acreage which was not previously possible because the company did not have deep rights for its onshore blocks: Cruze Horizon Block, Guapo Oropouche Brighton Horizon Block, Herrera Horizon Block and MayaroGuayaguayare Horizon Block.

He said the ministry was amending these licences following a meeting with the company to include Heritage’s right to the deeper horizons.

In return, he said, Heritage has committed to the drilling of one exploration well in each of the blocks, ranging in depth from 5,500 feet true vertical depth (TVD) to 13,500 feet TVD over the next three years.

"The targeting by Heritage of the deeper horizons will resuscitate oil exploration on land and, with success, would open up a new chapter in onshore oil exploration. This will encourage onshore operators in newly licensed acreage, as well as already licensed areas, to drill deeper targets to optimise the basins' potential."

The government's intent to increase production is why, Moonilal said, the cabinet decided to extend the deadline for the 2025 deep-water competitive bidding round from July to September 17.

Moonilal lamented what he believed was the country's failure to facilitate a diversity of operators in the energy sector. He said this has resulted in limited participation in bid rounds, a moderate appetite for risk-taking and the selective application of new technologies in the upstream sector.

"Our aim, therefore, will be to have the widest cross-section of upstream companies participating in our oil and gas industry. Put simply, we need new companies in the upstream side of our industry who would bring new approaches to doing things."

To help encourage investment, Moonilal said the government intends to re-examine various regulatory policies and taxes to create a more inviting environment for operators.

"We will work with the upstreamers to ensure that at the end of the day there is a return to their risk and the country benefits by way of greater taxes, royalties, duties and payments."