(Trinidad Express, 15.Nov.2018) — Venezuela’s minister of energy, Manuel Quevedo, said yesterday that his country’s state-owned oil giant PDVSA expects to start sending natural gas to Trinidad from the Dragon field, off this country’s north-west coast, within two years.
Speaking at a news conference following the 20th ministerial meeting of the Gas Exporting Countries Forum (GECF), which was held at the Hyatt yesterday, Quevedo described the Dragon agreements as an important example of cooperation between neighbouring countries.
(Loop News, 14.Nov.2018) — Minister of Energy and Energy Industries and President of the Gas Exporting Countries Forum, Franklin Khan, said the natural gas industry is forecast to grow within the coming year, a good indicator for Trinidad and Tobago.
Speaking at a media briefing after the second session of the 20th Gas Exporting Countries Forum (GECF) which was held in Trinidad and Tobago from November 13-14, 2018, Khan said gas producing countries stand to benefit from these aligned interests and growing markets.
“The Chinese market has grown phenomenally. China still produces 70 to 74 percent of its power from coal. China has made the decision that it needs to move away from coal.”
“If China drops its coal usage from 75 to 40 percent or 50 percent, this would be a whole new market which would have opened up. There is always a robust market in Asia, it is just how we work together as producers and exporters. The common bond of the GECF is assisting in extracting the best economic wealth for various countries based on their natural resources,” he said.
However, Khan acknowledged that two of the world’s major LNG producers, the US and Australia, are not members of the GCEF, which he said is their choice.
“There are two major gas players who, for reasons best known to them, have not attempted to join the group – the USA and Australia. In fact, Australia is on a massive gas expansion as we speak.”
During the Forum, members discussed current and future energy trends and the role of gas as outlined in the 2018 GECF Global Gas Outlook 2040 and the Annual Statistical Bulletin both scheduled to be released in December 2018.
Khan said there is also a focus on Africa and its emerging markets, such as Angola and Mozambique.
“Natural gas is the only fossil fuel that is planned for growth in terms of production and utilisation for the next decade,” he said.
Also present at the media briefing was HE Yury Sentyurin, Secretary General of the GECF, Energy Minister of Equatorial Guinea, Gabriel Lima, and Manuel Quevedo, Energy Minister of Venezuela.
The GCEF includes among its members Peru, Oman, Norway, the Netherlands, Kazakhstan, Azerbaijan, Iraq, Venezuela, the United Arab Emirates (UAE), Russia, Qatar, Nigeria, Libya, Iran, Equatorial Guinea, Egypt, Bolivia and Algeria.
The GCEF controls about 67 percent of the world proven natural gas reserves, 65 percent of the LNG trade and 63 percent of pipeline trade of natural gas.
The next session of the GECF will be held in Equatorial Guinea.
(Reuters, 13.Nov.2018) — Trinidad and Tobago’s Prime Minister Keith Rowley on Tuesday called on the Gas Exporting Countries Forum (GECF) to develop and implement a gas pricing index to ensure members receive adequate returns on the sale of the hydrocarbon.
As gas supplies become increasingly available for consuming countries through Liquefied Natural Gas (LNG) imports, producers aim to secure revenue from exports by encouraging what they consider to be fair pricing.
In a meeting in Bolivia last year, members of the GECF including prominent producer Qatar called for greater competition in the gas market and held talks with producing company chief executives to discuss pricing methodologies.
“Now more than ever, the need for such a global reference price is evident, in order to protect both producers and consumers alike,” Rowley said at the opening of GECF’s 20th Ministerial Meeting in Port of Spain.
Natural gas consumption grew 3 percent to 3.67 trillion cubic meters last year, pushed by bigger demand in Europe, the Middle East, Africa and Asia-Pacific, according to BP’s Statistical Review of World Energy.
But production increased at a higher rate, underlining a buyers’ market that continues stopping prices indexed to the U.S. Henry Hub from growing to levels acceptable to producers.
Prices at the Henry Hub have recently recovered from levels below $3 per million British Thermal Unit (BTU) in the last four years to surpass $4 per million BTU in November. But the U.S. Energy Information Administration last week forecast downward pressure on prices to an average of $2.98 per million BTU in 2019.
Trinidad and Tobago, where gas production has declined since 2010 to nearly 34 billion cubic meters last year, has been suffering “leakage of value” of its gas exports as traders take advantage of relatively low price benchmarks, Rowley said.
“Very little of the returns from high global LNG prices makes its way back to Trinidad and Tobago. This cannot be allowed to continue and as such. The current system must be reviewed,” Rowley added.
(Trinidad Express, Sandhya Santoo, 7.Nov.2018) — Is super gasoline burning faster?
This is the claim by some motorists who are insisting that the fuel is burning faster, leading to lower mileage per litre and higher costs.
And many taxi drivers say that the Super gasoline is causing economic hardship. Some want the State to subsidize taxi drivers.
At the pumps, car owners would pay $4.97 for super gas, $5.75 for premium gas, and 3.41 for diesel fuel.
Vice president of the St Croix/ Barrackpore Taxi Drivers Association Narine Lochan said the fuel seems to be burning faster.
He said given the higher cost of super gas and premium, using regular fuel has become a preferred choice, despite the car manual recommendation that a certain octane of fuel be used.
“Super is burning out like water and we have to mix using regular gas because the cost is too much. We can’t get the distance we cover with the super now. What we need is for the government to subsidise taxi drivers. The gas is causing havoc to the taxi industry,” he said.
Lochan said the poor road conditions was adding to the woes.
He said many drivers have fewer passengers and attributed this to an increase in unemployment.
He said: “We seeing less people travelling because they are losing their jobs. Where we could get a lot of passengers during peak times, we seeing less and it’s not because there are new taxi drivers or “ph” drivers but it is because they are not travelling like they used to.”
Lochan said the use of Compressed Natural Gas (CNG) is not suitable for taxi drivers of the association given that there are limited CNG fuelling stations in south Trinidad.
“ By the time we go to fill our tanks with CNG and run a trip, we have to keep coming back to fill the tanks. You cannot keep running to the gas station three or four times a day. There isn’t enough stations that is even close for us to use and so you will not see many taxi drivers for our route using CNG,” he said.
The fuel being used at the pump was imported by State-owned oil refinery, Petrotrin, which received its first shipment of refiner fuel on October 27.
Sixteen shipments will be delivered over the next four months under an agreement with BP’s Latin America Integrated Sales and Trading Group.
Petrotrin Chairman Wilfred Espinet in a television interview this week said, “we do know for a fact that the fuels we imported are consistent in terms of the specifications of what we were producing in Trinidad and Tobago so there should be no effect”.
Espinet said the fuel brought in was a shipment of diesel.
Espinet said the fuel goes into an inventory and “although we may be transferring from tanks, there are times you are going to get residual in tanks that are going to mix with each other.”
President of the Petroleum Dealers Association Robin Naraynsingh said the statements being made are done so with limited and uninformed knowledge.
He said drivers must be cognizant of the size of the gas tanks, the millage and ensure that there is proper maintence of vehicles.
“They are saying things they don’t know. Every manufacture of a vehicle will tell you how much miles per gallon of fuel you get. They have to know what is the fuel consumption of their vehicles. If you say its burning out faster, are you doing city driving or highway driving? This thing is science, it’s not something you can just ‘feel’. Its burning faster, but faster to what?
People who are saying this have to be cognizant of what they are saying. What is their fuel consumption? How long you burn the engine for, the mileage.
Do proper maintenance, read the manual to car and learn about the fuel consumption of your vehicle.
The consuming public have to be more aware. Check vehicles if they are working properly, know that you are using the right octane level. If you buy regular you are using more,” he said.
(Energy Analytics Institute, Piero Stewart, 4.Nov.2018) — EOG Resources, Inc. (EOG) reported a 20% collapse in natural gas production in Trinidad in the third quarter of 2018 (3Q:18). Looking forward to the next quarter, the scenario doesn’t look promising.
Gas production in Trinidad was 260 million cubic feet per day (MMcf/d) in 3Q:18, down 63 MMcf/d or 20% compared to 3Q:17, while crude oil production remained flat at 0.8 thousand barrels per day (Mb/d), the company reported in an official statement. On an equivalent basis, total gas and oil production in Trinidad was 44.1 thousand barrels of oil equivalents per day (Mboe/d) in 3Q:18, down 10.5 Mboe/d or 19% compared to 54.6 Mboe/d in 3Q:17.
In terms of prices, gas averaged $2.88 per thousand cubic feet (Mcf) and oil averaged $61.71 per barrel ($/bbl) in 3Q:18, up $0.84/Mcf and $22.29/bbl, or 41% and 57%, respectively.
Chart 1: Operational Update
Chart 2: Footnotes
Looking forward to 4Q:18, EOG expects gas and oil production to average between 220-250 MMcf/d and 0.5-0.7 Mb/d, respectively. On an equivalent basis, gas and oil production is expected to average between 37.2-42.4 Mboe/d, the company reported.
(Energy Analytics Institute, Jared Yamin, 2.Nov.2018) — BP has extended its contract with the Joe Douglas in Trinidad by one well with an expected duration of 76 days. The extension includes one additional two-well option at then market rates, Rowan Companies plc announced in an official statement.
(Proman and CEL, 2.Nov.2018) — Consolidated Energy Limited (CEL) and OCI N.V. announced that their subsidiary Natgasoline LLC, the largest methanol production facility in the United States and one of the largest globally, has priced around $900 million of new senior secured debt financing, including a $565 million Term Loan B facility and $336 million of bonds in the US tax-exempt market to be issued by the Mission Economic Development Corporation, the proceeds of which will be loaned to the company. As part of the revised financing structure, Natgasoline has also secured a $60 million revolving credit facility that will not be drawn at closing.
Proceeds will be used to refinance the existing $252 million of tax-exempt bonds issued in 2016 and existing shareholder and contingency loans, as well as funding working capital and financing costs. The Term Loan B is priced at LIBOR+350 bps with maturity in 2025, a material saving compared to the 9% and 10% shareholder and contingency PIK notes it will replace. The coupon for the tax exempt bond was priced at 4.625%, with maturity in 2031 and a final yield of 4.72%, compared to a coupon of 5.75% for the bonds being refinanced.
The completion of the refinancing will therefore result in significant interest savings and a move to a long-term capital structure that is reflective of the expected strong cash generation and profitability profile of Natgasoline, which has been consistently running above nameplate capacity in recent months. It also provides a financing structure that allows for more flexibility in Natgasoline’s distributions to the joint venture sponsors.
CEL, a global leader in methanol, is a subsidiary of Proman Holding AG and Helm AG.
Proman is an integrated industrial group and global leader in natural gas derived products and services. Headquartered in Switzerland, with assets in the United States, Trinidad and Oman, and ongoing expansion into Mexico, Proman is the world’s second largest methanol producer and one of the ten leading fertilizer companies via, in part, its controlling stake in CEL.
David Cassidy, Chief Executive of Proman and Chairman of CEL and Natgasoline said, “Having made our initial investment in Natgasoline in early 2016, we are very pleased to have completed construction of the plant, delivered ramp-up to nameplate production, and established stable methanol production and sales in recent months. The Natgasoline team has done an outstanding job in delivering the successful start-up of what is now the United States’ largest methanol production facility. The strong support received for the asset from investors through this $900 million refinancing echoes our own belief in the operational and the financial strength of this world class methanol plant, which we believe will continue to be demonstrated over the coming decades, and in the importance for Consolidated Energy to have onshore US based production as part of our production base.”
“We are pleased to have received strong interest in these offerings from the capital markets,” said Nassef Sawiris, Chief Executive Officer of OCI N.V. “Optimizing our capital structure through lowering our cost of debt and extending maturities has been a primary objective for OCI in 2018 and these two transactions at Natgasoline fit well in this strategy. Securing the lower cost of capital further strengthens Natgasoline’s industry-leading low-cost profile, which will position the company well for generating strong free cash flows throughout methanol cycles.”
The closing of the Term Loan B Facility and the tax exempt bonds is expected to occur on 14 November 2018 and is subject to customary closing conditions. The commitments with respect to the Term Loan B Facility and the terms and conditions thereof (including the applicable interest rates) remain subject to the execution of the definitive documentation.
The tax exempt bond and Term Loan B have received a preliminarily project finance rating of BB- by Standard & Poor’s and the Term Loan B is rated Ba3 by Moody’s.
The tax exempt transaction was underwritten by Citigroup Global Markets and Morgan Stanley. Citigroup served as the bookrunner. J.P. Morgan served as Left Lead Arranger and Bookrunner on the Term Loan B; Goldman Sachs served as Joint Lead Arranger and Bookrunner.
The state-owned refinery is expcted to cease operations on November 30, and transfer its assets into new companies being set up.
Even as it does so, it now faces an onslaught from people attempting to illegally occupy its lands.
Newsday understands that patrols are expected to begin today, and illegal structures will be demolished.
Tomorrow, Petrotrin officials will go out with the company’s police to erect eviction signs.
Expected to be evicted is the Church of God of Prophecy, at Mussarapp Trace, Barrackpore. Also expected to receive an eviction notices are a Hindu temple at Mussarapp Trace and the million-dollar Point Fortin Early Learning Centre (ELC).
Both buildings are on the company’s lands and are close to oil wells.
Petrotrin recently served demolition notices to the pastor of Church of God of Prophecy, who was asked to stop holding prayer services at the church.
The church building is within 100 feet of an oil well and poses a serious safety risk.
Attorneys for the church and oil company have been engaged in a legal battle over rights to the land. The church’s pastor is contending they had been in occupation of the lands for more than 17 years.
Tomorrow’s demolition notice will be the final legal step to demolish the structure which will take place 14 days after.
Petrotrin also wrote to a woman, named Leion Howard, about the erection of the ELC at Bryce Road, Point Fortin.
In the letter, Petrotrin’s manager of Lands and Service, Gerard Lewis, accused Howard of unlawfully entering the lands at Bryce Road, east of oil well FW257 and west of oil well FW 191.
The letter alleges Howard cleared the land and began construction on it.
The building, constructed of steal beams and concrete blocks, has cost about $1.5 million so far.
Petrotrin’s letter also informed Howard that she refused to obey previous notices to cease construction.
The letter said a safety risk existed because of the proximity to its active wells. I
“Petrotrin hereby gives you notice to immediately deconstruct and remove the aforementioned concrete structure from upon the lands. Please further be advised that failure to acede to this request will leave us with no alternative but to vigorously seek to protect our interest in the lands,” the letter said.
Howard was also told to demolish the building within 21 days.
Contacted in Barbados yesterday, Petrotrin’s chairman Wilfred Espinet said people’s need for housing must not be at the expense of putting their lives at risk by constructing churches and schools near oil wells.
He said the company has embarked on a hectic campaign against invasion of its lands.
“We appreciate people need for housing, but we must strive to become a rule-based society in which each and everyone must not do things to suit themselves. It is unfortunate, but we have to do the right thing because you cannot put people lives at stake.”
(CMC, 3.Oct.2018) — The Trinidad and Tobago government Monday reiterated its position that it was necessary to close down the refinery of the state-owned oil company, Petrotrin, insisting that the company was losing billions of dollars (One TT dollar=US$0.16 cents) annually.
Finance Minister Colm Imbert, delivering the TT$51.7 billion budget to Parliament, said that the Keith Rowley administration had agreed following a “comprehensive assessment and analytical review of its operations” to shut down the refining and marketing business unit of Petrotrin.
“We are repurposing Petrotrin which would now focus on the full exploitation of its exploration and production activities and on a new terminalling business through which imports will now meet the demand of Trinidad and Tobago and the Caricom region for the refined products previously produced by the refinery,” Imbert said.
He said these would include motor gasoline, diesel, aviation fuel, liquefied petroleum gas and other derived and refined products.
He said in 1985 when a former people’s National Movement (PNM) had decided to purchase the failing refinery assets from the international private sector in a bid to save jobs, the situation has changed.
“Since that time, the refinery economics have further deteriorated as the refinery has failed to adapt to the changing fuel environment which demanded cleaner standards for fuel technologies in local and foreign markets.
“The continuing efforts over time by the managerial, technical and governance personnel to improve the efficiency of the refinery to meet the standards for the internationally marketable products fell short of requirements.”
Imbert said that all the major plant upgrades failed – from the gas optimisation plant to the ultra-low sulphur diesel complex and the gas-to-liquids plant – all experiencing substantial cost overruns in the process.
He said the cost of these upgrades has loaded the company with an unsustainable debt burden estimated at TT$12 billion of which TT$5.780 billion is due in August 2019.
“While the company continued to incur persistent losses, the gasoline optimisation programme saw its cost rise from TT$2.45 billion in 2005 to TT$12.6 billion when it was completed in 2013, the cost of the unfinished gas-to-liquids plant rose from TT$1.55 billion to TT$3.15 billion and that the cost of the ultra-low sulphur diesel complex rose from TT$791 million to $2.89 billion “
He said while the project is 98 per cent mechanically completed, it cannot be operated because the structural specifications were not followed, meaning that the foundation is faulty and cannot be used. It would take TT$2.5 billion to rectify the defects, Imbert added.
He said in the context of these managerial failures, the size of the employee-base at Petrotrin remained in the vicinity of 5,000, divided between the refining and marketing business unit and the exploration and production business unit.
“In addition, the monthly wage bill amounted to TT$183 million per month or TT$2.2 billion on an annual basis. Coupled with this wage bill, the medical plan was running at an annual cost to Petrotrin of approximately TT$245.0 million per year but with very low contribution rates by the employees ranging from TT$50 to TT $80 per month.”
Imbert said what is interesting about this TT$245 million, medical plan is that it currently covers 21,000 present and past employees and their unmarried family members under the age of 21 or under the age of 23 if still in school.
“It effectively covered a Petrotrin employee and spouse until death. This has to be one of the most generous medical plans in Trinidad and Tobago, if not in the entire Caribbean region,’ Imbert told legislators.
He said the survival of the company was only possible through the non-payment of TT$3.5 billion in taxes and royalties, in breach of the law, and the procuring of government guarantees in the amount of TT$1.5 billion for loans from financial institutions which have significantly increased the public debt.
“This has placed a severe burden on the Treasury and on taxpayers, especially in view of the fact that Petrotrin extracts 40,000 barrels per day of taxpayers’ oil, at a value of six billion dollars per year, for which taxpayers receive no benefit.”
Imbert said that despite the fact that Petrotrin is tottering on the brink, as recently as last month, it approached the Ministry of Finance for financial support by way of another government guarantee in the amount of US$56 million to purchase a cargo of crude oil, since the shipper refused to discharge the cargo without a guaranteed letter of credit.
“And just last week, Petrotrin approached the Ministry of Finance for more financial support to refinance debt instruments totalling a further US$180 million as they become due for payment,” Imbert said, telling legislators that in its current form the company “remains unprofitable and whatever scenario is analysed, it cannot generate a profit without drastic restructuring.
“The financials generated by independent consultants, both local and foreign, provide a grim outlook of a deteriorating financial situation which cannot be improved even if billions of dollars in capital are injected into the company, which capital is simply not available.”
He said the latest financials for the company are illustrative of a looming crisis which if left unresolved would have a serious impact on the national economy.
Imbert said the government will do all that it can to assist displaced workers at Petrotrin to transition to their new circumstances.
“We will provide all available support at our disposal. And we will work with the company to ensure that adequate funds are available to pay termination benefits on time and in full,” he said, adding ‘we are confident that the reinvented Petrotrin will resume its rightful place as a leader in the oil and gas sector of Trinidad and Tobago and will become a profitable and efficient entity that makes a positive contribution to the Treasury.
“May I also point out that the company has advised that it will continue to be a significant earner of foreign exchange, in the vicinity of US$200 million-plus per year, after it completes the transition to its new business model,” Imbert added.
(Energy Analytics Institute, Aaron Simonsky, 1.Oct.2018) — Trinidad and Tobago will use a $65 per barrel oil price to calculate its 2019 budget.
Other key highlights related to the 2018/2019 budget were outlined by Finance Minister Colm Imbert in a report titled: “A Genuine Economic Turnaround,” and published by CNC3.
The key highlights include:
Estimated Revenue: $47.724 billion
Estimated Expenditure: $51.776 billion
Estimated oil price: US$65/barrel
Estimated gas price: US2.75/mmbtu
Tobago: $2.229 billion. This represents $1.97 billion for recurrent expenditure, $231.63 million for capital expenditure and $18 million for URP.
Fuel: The cost of super gasoline will rise from $3.97/litre to $4.97/litre. Diesel will remain at $3.41 and premium will also be unaffected.
Pension: Public service pension will rise to a minimum of $3500/month to public servants upon retirement. Cap on senior citizen pensions being raised to $6,000, allowing person in receipt of both NIS and and Senior Citizen Grant to receive up to $3,000 from both.
Crime: Reward from crime stoppers up to $100,000 for information on 25 most wanted criminals, particularly for crimes of murder and kidnapping.
Health: Three rural health centres in Grand Riviere, Blanchissuese and Cedros to remain open on 24/7 basis.
Child Protection: 100 percent increase in all fines in relation to cruelty to children effective January 1st, 2019.
Environment: Penalties under litter act to increase 100 percent.
Tax evasion: Penalty fines go up from $3,000 to $10,000 for submission of incorrect information TD1s. Penalty with regard to tax fraud goes up from $50,000 to $250,000.
Social: Value of food cards to increase by $100 effective January 1st, 2019.
Disabilities: Disability grant’s age eligibility being removed to accommodate children under age of 18. Their grants will go from $800- $1500 and for those over 18 years old, it will increase from $1800-$2000 for January 1st. Public assistance grant to increase by $150.
* Introduction of new Housing Bond scheme for construction of houses. Citizens who invest in housing bonds will be given preference in new HDC housing units and be able to transfer full amount of bonds towards housing units.
* Greater emphasis on electronic and cyber-crime. New-look Police Service will be more computerised. In process of establishing TT Police Service Operational Command Centre. It will manage all major national events and be staffed 24 hours. Current operational system being reviewed. Police will make more use of drone technology. GPS in vehicles, dashboard cameras, laptops in all vehicles, body cameras for police officers. Government will make necessary changes to ensure use of non-lethal weapons by police officers. Change of uniforms to be harder to counterfeit and more climate-friendly.
(LoopTT, Darlisa Ghouralal, 1.Oct.2018) — Severance packages for retrenched Petrotrin workers are expected to cost the State in the region of $2.6 billion.
Finance Minister Colm Imbert made the announcement based on initial estimates as he delivered the 2018/2019 fiscal package in Parliament on Monday.
State-owned oil company Petrotrin began its phased exit of the refining business on October 1.
This transition process is expected to be completed on November 30.
Approximately 4700 employees – 3500 permanent workers and approximately 1200 non-permanent workers – are expected to be affected in this restructuring exercise.
The Minister said 1400 employees are eligible for retirement packages in the closure of the Pointe-a-Pierre refinery, with some 800 workers to be recruited in Exploration and Production and 200 workers for the terminaling business unit.
He gave the assurance that support will be provided to the retrenched workers to ensure they make the transition to their new circumstances, as he expressed confidence that the transition will bring the Company back to a position of profitability.
“We are confident that the reinvented Petrotrin will assume its rightful place in the economy and positively contribute to the Treasury.”
The termination benefits will be paid on time, and in full, he continued.
Imbert added that Government remains open to any alternative proposal to the refinery, stating that the majority representative union, the Oilfields Workers Trade Union still has the first option to operate the refinery.
The Minister stressed that the closure of the refinery was a hard decision that had to be taken as it has been consistently losing over $2 billion over a number of years and, if left, unchecked will have a negative impact on Trinidad and Tobago’s economy.
(Energy Analytics Institute, Aaron Simonsky, 30.Sep.2018) — Members of the Energy Chamber of Trinidad & Tobago and a Petrotrin transition team meet to discuss issues related to closure of the Petrotrin refinery, among others energy related issues.
The officials discussed the impending closure of the Petrotrin refinery, located Pointe-à-Pierre, and new opportunities with the refocused exploration and production company and the terminal operations, announced the Chamber in an official emailed statement.
During the meetings, Petrotrin provided an overview of planned activities over the coming two to three months, including how the company would settle all outstanding valid contractual obligations.
(Trinidad and Tobago Newsday, Julien Neaves, 26.Sep.2018) — Energy Minister Franklin Khan has assured there would be no disruption in fuel supply to the travelling public with the closure of the Petrotrin Refinery next Monday.
Khan was responding to a question in the House yesterday from Pointe-a-Pierre MP David Lee on the strategic steps to ensure the supply of fuel was not disrupted with the closure of the Petrotrin Refinery on October 1, in a phased manner.
Khan reported the country consumes 25,000 barrels of liquid fuel per day or 3.9 million litres, comprising of aviation fuel, diesel, super and premium gasoline and small amounts of regular.
He said the refinery would be closed on a phased basis in October and upon its closure there would be a 20-day supply of fuel from stock. Khan said steps are currently being put in place for the importation of fuel from international traders and request for proposals from 13 reputable international suppliers and traders were currently out.
Prime Minister Dr Keith Rowley also responded to a question from Lee that given Government’s offer to the Oilfield Workers’ Trade Union (OWTU) of a preferential option to purchase the Petrotrin refinery if the Prime Minister could indicate the other options Government intends to pursue if this offer is not accepted by the OWTU. Rowley said it was Government’s position the refinery would be excised as a separate entity from the rest of Petrotrin’s business and be an independent asset. He said at that stage if OWTU puts forward a proposal to Government, the union would be given the first option. “They have indicated some interest is being shown pertaining to that.”
Lee asked if there were any other proposals but Rowley said he was not aware Petrotrin was in receipt of other proposals but interests have been expressed if the asset becomes available.
(Trinidad and Tobago Newsday, Yvonne Webb, 20.Sep.2018) — Days before Petrotrin’s refining operation ceases and workers are retrenched, a member of the board who would have participated in the restructuring exercise, has become the first casualty of the plan.
An internal circular from the company to all employees confirmed board member Randhir Rampersad has ceased to be a member of the board of directors. No reason was given for his departure, causing speculation among some workers.
The memo, signed by Sharon Morris-Cummings, advised employees to amend the director listing on the company’s letterheads to only reflect the remaining members – chairman Wilfred Espinet, deputy Reynold Ajodhasingh, Anthony Chan Tack, Nigel Edwards, Joel Harding, Selwyn Lashley, Eustace Nancis and Linda Rajpaul.
The Oilfield Workers Trade Union (OWTU), which also received a copy of the memo yesterday, said this warrants a probe. A spokesman said it is unusual at this point in the process of restructuring, for a Board member to leave without a reason. The trade union said it raises a lot of questions as to whether Rampersad was fired or if he resigned; and why.
(Energy Analytics Institute, Ian Silverman, 20.Sep.2018) — The Energy Chamber of Trinidad and Tobago announced its agreement with an Memorandum of Understanding (MOU) signed between the governments of Guyana and Trinidad and Tobago.
The MOU recognizes development of the energy sector contributes significantly to strengthening of economic and social development while improving the quality of life of the citizens of both countries. It also commits both governments to continue the development of cooperation mechanisms to foster the creation of an environment conducive to energy integration, on the basis of the principles of reciprocity, solidarity and respect for sovereignty, the chamber announced in an official statement.
Over the past decade and more, the Energy Chamber has engaged the government and the private sector in Guyana on numerous visits and in various bilateral and regional meetings. This engagement pre-dates the discovery of oil in Guyana and many of the chamber’s member companies have operations in Guyana going back many decades. Since the discovery of oil, this engagement has accelerated, as the chamber has sought to create mutually beneficial relationships between the private-sector of both countries, according to the statement.
(CMC, 19.Sep.2018) — The Trinidad and Tobago g overnment Monday said the compensation package for workers being laid off by the closure of the oil refinery of the s tate-owned company, Petrotrin could be more than TT$1 billion (one TT dollar=US$0.16 cents).
But energy minister, speaking in the Senate, said while he would not want to provide an accurate figure, the workers’ representatives, the Oilfields Workers Trade Union and the Petrotrin board of directors will meet on Tuesday to discuss termination packages for the affected workers.
“I personally said the packages will cost upward of one billion dollars and if you take the collective agreement and you do some basic calculations, it is obviously more than one billion.
“But the government and the board of Petrotrin are willing to sit down with the union and go through all the numbers and possibly offer some enhancement to that package,” he told legislators.
Last month, the government announced that it would be closing down the oil refinery after indicating that it was losing an estimated two billion dollars annually.
The Keith Rowley administration said that more than 2,500 workers would be laid off as a result and Khan told the Senate that the figure was 4,700.
“The termination packages and the benefits therein are currently being negotiated by the board of Petrotrin and the Oilfield Workers Trade Union, and a meeting is carded for tomorrow. So, in a sense, I wouldn’t want to pre-empt or prejudge what package they will come up with.
“As to the number of employees that will be impacted, the total number of permanent employees that will be impacted from the Petrotrin restructuring is approximately 3,500 permanent workers and approximately 1200 non-permanent workers,” he told the Senate.
(Trinidad Express, 17.Sep.2018) — Former Director of Energy Industries at Industrial, Jim Catterson, says closure of the Petrotrin refinery makes no economic sense. He said the closure would decimate south Trinidad.
Catterson said unemployment would rise and poverty would spread across the nation.
Speaking at a press conference at the Oilfield Workers Trade Union (OWTU) headquarters in San Fernando, Catterson said the Government must consider the proposal presented by the OWTU last week.
“Tens of thousands of people would be unemployed. These people would no longer contribute to the national economy through taxes. They would no longer contribute to the national economy. There would be a downward spiral of the economy into poverty,” he said.
Catterson said it was important that the government have further discussion with the OWTU and Petrotrin management.
“Get around the table and discuss the future of this industry and economy. It is the only way to resolve this situation. Find a way for the country to survive,” he said.
Catterson questioned why a government wanted to close the refinery and import petroleum products.
“Where would you get the foreign exchange to buy the things you need? And when you can produce these products yourself,” he said.
Catterson said oil workers were highly skilled, educated and knowledgeable and should be paid accordingly.
But he dismissed reports by Energy Minister Franklin Khan that salary and wages totalled 52 per cent of Petrotrin’s operating cost.
He said, “Salary and wages is under 10 per cent of the company’s operating cost. Oil workers are highly skilled, educated and handles equipment worth millions and potentially dangerous. So they should be highly paid.”
IndustriALL Global Union is a global union federation representing more than 50 million working people in more than 140 countries, working across the supply chains in mining, energy and manufacturing sectors at the global level.
(Jamaica Gleaner, 14.Sep.2018) — Barbados says it is holding discussions with a number of suppliers to replace the energy arrangements it had with oil refinery Petrotrin.
The refinery, based in Trinidad & Tobago, is locking down operations, a measure it blamed on increasing financial losses. The closure has led to the retrenchment of more than 1,700 employees.
In a statement on Wednesday, the Barbados National Oil Company Limited, BNOCL, said it currently imports gasolene from and sells its crude oil to Petrotrin, while diesel and fuel oil are sourced extra-regionally. It said kerosene is imported by the oil companies Sol and Rubis.
BNOCL said that at the time of the Petrotrin announcement regarding the closure of the refinery, it was exporting 260,000 barrels of crude oil annually to the Trinidad refinery and importing 60,000 barrels of gasolene on a monthly basis.
It said the annual contract with Petrotrin entailed the exchange of the crude oil for gasolene, which aided in the reduction of the foreign exchange cost, as the value of the crude offset the outlay for the gasolene.
BNOCL said its storage capacity for gasolene is 80,000 barrels. However, as of Wednesday, September 12, its gasolene stock was at 53,582 barrels, “which is enough inventory for 25 days”.
The inventory is expected to rise to 38 days’ supply, when Petrotrin delivers another 30,000 barrels of gasolene on Saturday, September 15.
BNOCL expects to receive its final shipment from Petron over the period September 24-28 of around 30,000 to 35,000 barrels.
Altogether, assuming the shipments arrive as scheduled, the oil company expects to have enough inventory to supply local needs to November 5, assuming a “usage rate of 2,000 barrels a day.”
The Ministry of Energy and Water Resources said that through BNOCL, it has been in discussion with a number of suppliers with a view to employing a similar arrangement to that with Petrotrin.
“The goal is to ensure that this country has a consistent supply of gasolene at an affordable price, while securing a market for Barbados’ crude oil. BNOCL has never had a stock-out of petroleum products and always has adequate inventory to service Barbados, and is ever mindful of the need to do so, particularly during the hurricane season,” the ministry said.
The Mia Mottley-led government also sought to assure Barbadians that “despite the closure of the Petrotrin refinery, there will be no shortage of gasolene in Barbados,” saying it was keeping on top of the situation.
(Trinidad and Tobago Newsday, Sasha Harrinanan, 12.Sep.2018) — Most everyone knows about the 1,700 workers who will be out of a job once Petrotrin closes its oil refinery in Pointe-a-Pierre. What fewer people know is that when confirmation of this came on August 28, some National Petroleum Marketing Co Ltd (NP) workers feared they too would lose their jobs.
This was revealed by Bernard Mitchell, CEO of NP during an interview with Business Day at St Christopher’s gas station, Wrightson Road, Port of Spain on September 5.
“There was some anxiety because when the story broke, there wasn’t clarity about what the implications would have been for NP. So there was a bit of anxiety but what we’ve done is engage our employees – indicate there’s no need to be concerned – at a staff meeting last week.”
Seated in a conference room on the first floor of the popular NP-branded gas station, Mitchell said NP’s customers too can rest assured the refinery’s closure will not affect their fuel supply.
“Whether it’s using the seabridge to Tobago, your car or your travel internationally, nothing has changed in terms of the delivery of fuel. Based on what Petrotrin has indicated, it’s their intention to purchase fuel and sell to us, (so) nothing really changes. If, however, we do have to purchase fuel ourselves, we might want to use a larger vessel to deliver more fuel to our sufferance wharf, rather than making more frequent trips on a smaller vessel.”
NP’s sufferance wharf – a licensed private wharf where dutiable goods may be kept until the duty is paid – is behind its head office in Sea Lots, Port of Spain.
Petrotrin will begin transitioning out of the refining business on October 1, but it has not said when the refinery is expected to cease operating. This is one of the questions Mitchell will ask Anthony Chan Tack – interim oversight team member and director in charge of refining and marketing at Petrotrin – when the two meet.
“We are one of their primary stakeholders, so Petrotrin would be meeting with us soon to determine whether there’ll be any changes and if we need to do things differently. Mr Chan Tack is my point of interface there because he’s the one overseeing the refinery side, so the delivery of fuel is through his area.”
Mitchell and Chan Tack held an initial conversation shortly after the August 28 meeting between Petrotrin and the Oilfields Workers Trade Union (OWTU) at the company’s corporate headquarters, Southern Main Road, Pointe-a-Pierre.
Chester Beeput – general manager of aviation and marine fuels at NP – joined the interview via speaker phone at one point to answer Business Day’s questions about possible upgrades to the sufferance wharf.
“We use an ocean-going vessel to transport refined fuels from Petrotrin to Sea Lots. It brings in roughly 25,000 barrels of product and (the wharf’s) draft is five metres. Dredging the channel down to seven metres allows you to go from 25,000 to between 30,000 and 35,000 barrels, depending on the vessel. The other element to consider is, if we dredge down to seven metres, we would now be restricted by the length. The current length of our vessel is roughly 100 metres. We can go up to a maximum of 120 metres,” Beeput said.
Mitchell added to this, explaining that if dredging is required, it would fall under the purview of the National Infrastructure Development Co Ltd (NIDCO).
“We have been in contact with NIDCO and they are in the process of looking at the issue…It’s only if the opportunity arises for us to purchase fuel internationally, that there would be some urgency in doing that (dredging). Remember, the model is for Petrotrin to continue supplying us with refined fuel, so there’s no need to dredge at this time.”
The supply of aviation fuel to state-owned Caribbean Airlines Ltd (CAL) and all other airlines which refuel in TT was also discussed.
Beeput said after the announcement, several airlines expressed concern about the possible impact on jet fuel supplies.
“They asked if we anticipated any disruptions. I explained that for all intents and purposes – based on the information we have – there would be no disruption because whether Petrotrin provides fuel via refining or via importation, the net effect on the airlines would be zero.”
Petrotrin sells jet fuel to NP, then NP sells that to airlines from its tanks at Piarco International Airport, Piarco and ANR Robinson International Airport, Crown Point.
Beeput said CAL pays NP in TT dollars while foreign-based airlines/aircraft pay in US dollars.
During his September 2 televised address to the nation, the Prime Minister said the OWTU “will be given the first option to own and operate (the refinery) on the most favourable terms.” Dr Keith Rowley’s offer was rejected the following day by OWTU president general Ancel Roget, who accused the PM of already having a potential buyer for the refinery.
Asked if NP was considering entering into a partnership with another entity to purchase the refinery, Mitchell immediately replied, “No, no, no.”
He later said this was “an unlikely scenario, at this point in time, because we have absolutely no information on that refinery. To make such a decision would involve detailed, in-depth analysis. Also, it’s not part of our core business.”
“We don’t have the expertise, we don’t have the background information and we don’t see what that’s going to do to add value if we change our business model to include (refining),” Mitchell told Business Day.
(Energy Analytics Institute, Jared Yamin, 12.Sep.2018) — The decline is consistent and constant as well as consistently and constantly bad, writes Caracas Capital Market in a research note emailed to clients.
Summary details from the research note follow:
OPEC released the production counts for its member states today and while overall OPEC production was up 278,000 barrels per day (bpd) during the month, Venezuela’s production continued to collapse.
According to OPEC’s August calculations, Venezuela production fell another 36,000 barrels per day (bpd) to 1.235 million bpd. (Venezuela production actually fell 43,000 bpd from the original OPEC July count of 1.278, but OPEC revises their numbers as new data comes in later in the month and moved Venezuela’s July production count down to 1.272 million bpd from the original 1.278 bpd), according to the research note.
“The decline is consistent and constant.”
OPEC calculated that July’s Venezuelan production fall was 42,000 bpd and that June’s fall was 48,000 bpd. In May, Venezuela production fell 43,000; in April, -42,000 bpd; in March, -55,000 bpd; in February -52,000 bpd; in January, -47,000 bpd. Consistently and constantly bad.
In the one year period from August 2017 — when PDVSA was producing 1.918 million bpd — Venezuela has lost 683,000 bpd of production. At the current year average price, that is lost income of $47 million a day and $17.5 billion in a year.
Making this situation worse is that Venezuela’s current 1.235 million bpd production is just a shade more than a third of what the country was producing 20 years ago before Chavez came to power. Hundreds of billions of dollars lost through communism, corruption and incompetence in a country that can ill afford it.
“By the way, we are seeing just one example of how that corruption works in a case playing out before the U.S. Federal District Court in Miami that sucked $1.2 billion from PDVSA in what I label a ‘perpetual money machine for bad guys’ in today’s Miami Herald and El Nuevo Herald, writes Caracas Capital Markets Managing Partner Russ Dallen. “The cast of characters reaches all the way to the top and includes the Derwick boys (especially Francisco Convit), the Boligarch Raul Gorrin (who bought Globovision), the Maduro family (especially the stepsons ‘los chamos’ but also mentions mother Celia Flores and Nicholas Maduro), and a Swiss banker who has copped a deal to tell all (but still had to put up a $5 million bond yesterday).”
Drilling Rigs Fall
Meanwhile, Venezuela’s drilling rig count dropped by one in August, continues the Caracas Capital Market report.
Baker Hughes reports that the number of active drills operating in Venezuela fell to 27 last month, after popping up 2 in July off June’s thirty year low of 26. One of the two drills that was added in July was drilling for gas – the first in over a year. It was still deployed in August.
Having failed to capitalize on its natural gas (much less build the Mariscal Sucre LNG plant) for decades, Venezuela signed a deal last week to link into an already existing gas pipeline at a Shell platform in bordering Trinidad waters and through that pipeline pump gas to Trinidad’s Atlantic LNG plant where it will be converted into LNG for export.
Long time readers will also recall that Rosneft was given a 30 year totally wide-open lease on a gas field in that area last year.
Maduro Goes to China
Finally, as we predicted in our “China Promises Venezuela More Money” Report yesterday and correctly forecast in a Report and Wall Street Journal column in July, Venezuela seems to be making headway in getting help from the Chinese, writes Dallen.
“No one else seems to have been able to accurately uncover and read these Chinese tea leaves, so I am especially proud of our Caracas Capital team. We continue to knock the ball out of the park for our clients,” writes Dallen.
Minister of Oil and PDVSA head Manuel Quevedo is also in Beijing meeting with CNPC and is offering to expand natural gas agreements as well. Yesterday, Venezuela’s oil ministry released a statement touting that the Sinovensa joint venture had increased oil production from 70,000 bpd to 110,000 bpd.
Aside from oil, gas and drilling, we are anticipating some other upcoming ventures in gold mining, coltan and diamond mining, concludes the Caracas Capital Market note.
(Stabroek News, 6.Sep.2018) — The signing of the Memorandum of Understanding (MoU) on Energy Sector Cooperation between the governments of Guyana and Trinidad and Tobago, paving the way for cooperation in oil and gas between the two states, will proceed as planned next week, despite a call by the city chamber of commerce for it to be put on hold.
Meanwhile, the Guyana Oil and Gas Energy Chamber President Manniram Prashad has said that even though it has not seen the MoU, it will support it if it is in the interest of Guyanese businesses and the Guyanese people.
On Wednesday, Prashad’s colleague, President of the Georgetown Chamber of Commerce and Industry (GCCI) Deodat Indar called for government to hold off on the signing until the group has a clear idea of what the MoU entails.
(Trinidad and Tobago Newsday, Melanie Waithe, 5.Sep.2018) — Petrotrin has been in operation for over 97 years, and now our legacy refinery as we know it, will close. Its transition is set to begin next month. The announcement was made on the eve of our 56th anniversary of independence and Ancel Roget, president of the Oilfield Workers’ Trade Union (OWTU) commented that a move to privatise the company would bring the country back to “plantation days.”
I offer the proposition that this decision of the Petrotrin board and Cabinet was not the best option, notwithstanding the massive debt with which the company has found itself burdened, due to decisions taken over the last decade. Unfortunately, the major stakeholders could not find common ground.
However, some experts believe there are wider and deeper economic and social implications that are hinged to this decision. I heard a former energy minister ask a pertinent question: was the decision based on the company’s balance sheet, or did stakeholders consider the effects on the economy. So, what were the other options available to the board?
Joint Trade Union Movement (JTUM) members responded to the news via a press conference and issued a statement in support of the plight of their fellow OWTU members. They took the news as a declaration of war on the trade union movement.
The OWTU had proposed a plan to focus on increased productivity, accountability, and achieving production targets, with employees taking full responsibility for performance. Its plan also addressed quick-win projects yielding an additional 2,000 barrels of oil daily, and multiple other initiatives in land and offshore areas. Increasing refinery efficiencies and reviewing from whom TT imports crude were among aspects of this plan.
OWTU’s education and research officer Ozzie Warwick said the Lashley team, chaired by permanent secretary in the Ministry of Energy Selwyn Lashley agreed with the union’s recommendations and commented, “It’s strange it didn’t recommend closing the refinery. But our plan will ensure Petrotrin’s survivability.”
According to reports, Petrotrin is heavily overstaffed, with deficiencies in technical competencies in key disciplines. Manpower costs accounted for between 47 and 50 per cent of recurrent expenditure. It’s net debt at financial year-end 2017 amounted to $11.4 billion while taxes and royalties owed to Government amounted to $3.1 billion. The company is projected to continue accumulating losses at a rate of about $2 billion a year, and left as is, a $25 billion cash injection is needed to keep Petrotrin afloat. Petrotrin also needs to improve the integrity of its assets, estimated to cost around $7 billion to prevent oil leaks for example. This is indeed a dying company.
An unfortunate circumstance is that now the company is apparently bordering on insolvency, as it has been operational only due to its non-payment of taxes, and the Government’s guarantees of short-term loans.
The Government had commissioned the now termed Lashley Report and a strategic review and transition report from McKinsey and Company Inc. After the Lashley Report was received by the energy sub-committee of the Cabinet, it was passed to the ministries of energy and finance and Petrotrin for deeper reviews and analysis, following which a new board was appointed to come up with a plan to turn the company around.
The Lashley Report recommended splitting the company into three divisions: land-based production; its marine operation, Trinmar; and refining and marketing. Energy Minister Franklin Khan had said no options are off the table, but the report failed to propose staffing cuts and steered clear of privatisation. These were glaring weaknesses in the Lashley recommendations. Is it because Lashley assumed that both options would meet trade union resistance? The restructuring proposal would also prove inconsequential.
In September 2017 Cabinet had agreed that the company engage the recognised majority union to discuss cost reduction and survival strategies.
The Prime Minister claims he had formally invited Roget for discussions in an attempt to work out a way forward but the invitation was declined. The union was also apparently invited to sit on the board, and that too was declined. When Government hosted the Spotlight on the Energy Sector at the Hyatt Regency Trinidad, the union once again declined the Government’s invitation.
I seriously question the union’s motives in its unavailability to consult and participate in good faith in discussions to find workable solutions for such an important state-sector company. Was this the best representation the union could have made in the interest of its members and our citizens? Was there sufficient consultation to generate the best ideas given the real-time situation at Petrotrin?
At the worker level, we all should sympathise and offer our collective support as their lives will be altered due to decisions made by others. Given the vacuum created, and the absence of business suggestions to offer alternative opportunities, we would be left with higher unemployment and affected communities.
The Government has now made a bold poker move by “bluffing” the union when the PM publicly offered to sell Petrotrin’s refining assets to the OWTU. This offer should not have surprised anyone, as all reports dealt with the asset integrity of the company, given that the plant is close to 100 years old and carries little, if any, value on Petrotrin’s books. Mothballing the plant would simply not be a strategic economic option, and therefore its sale to a private operator was always on the cards.
The question then is, if the refinery is sold, would the successor company inherit the terms and conditions of the collective agreements? In other words, would any new refining company be viewed as a legal successor to Petrotrin.
This move I think is a well played one, as it now challenges the union to “put its money where its mouth is”. It also provides the Government with the public relations and politically defensive cover of being worker sensitive, while at the same time putting the union into the space to do what they have been calling on Government to make happen.
What is now very clear is that the Petrotrin refinery is not too big to fail, as we have survived both the dismantling of CL Financial, as well as the closure of Caroni Ltd. This too we will survive.
(Trinidad and Tobago Newsday, Vashtee Achibar, 5.Sep.2018) — Industrial relations consultant Gerard Pinard wants to know whether Government considered every available option before it took the decision to close down the state-owned Petrotrin refinery. He said the decision was not a good one and will hurt the economy and the society because of the important role Petrotrin plays in the country.
Speaking with Business Day, Pinard a former chemical engineer with Trintoc, the predecessor of Petrotrin, said more information should have been made available for such an important development. He cited the announcement by the majority trade union in Petrotrin, Oilfields Workers Trade Union (OWTU) that it had taken them by surprise.
He said while everyone expected something to happen, no one expected it would be as drastic as sending home 2,500 people. He recalled OWTU leader Ancel Roget referring to a memorandum of agreement signed with the Government prior to the last general election, and a joint committee being set up to look into ways and means to make the company viable.
The IR consultant said Petrotrin is duty-bound to consult with the recognised trade unions and must engage them in matters that involve their future. He said the decision to close the refinery cannot be done unilaterally, and if this was the case then the employer (Petrotrin) could be found guilty of an industrial relations offence in the Industrial Court.
“I do not have the information. The union is saying that it came like a thief in the night. If that is so, then it was badly handled. If in fact there were discussions that it was going to happen the union is entitled to put forward alternative options and asked for continued discussions,” he said.
Continuing to press the point that the closure was not handled well, Pinard said it is not only about the workers who are to be sent home.
“There are over 6,000 retirees, over 5,000 contract employees, over 20,000 people who rely on the medical services mostly retirees and former employees and their families. The company runs a hospital and they provide medical benefits at subsidised rates for all these people. We do not know what is going to happen now to them. Will it continue? We don’t know.”
Apart from people directly connected to Petrotrin, Pinard said people in fence line communities of Petrotrin will feel the full impact of the closure.
“Tens of thousands of people from the southern communities, the whole of San Fernando, Pointe-a-Pierre, Marabella, Point Fortin, Santa Flora and Fyzabad depend directly or indirectly on Petrotrin for their livelihood. I don’t know how much thought has gone into that. You have to have job losses but we don’t have the information to say whether this was really the only alternative or the best alternative.”
Pinard said he was puzzled why a bailout, as was done in the case of Clico, was not used. “So my question really is whether TT, as an oil and gas based economy, did not think that our oil industry was strategically important enough to find some ways to save it.” He said Government could have considered writing off part of the debt or taking over part of the debt temporarily as was done in the case of CL Financial.
Pinard said he is not in agreement with Petrotrin chairman Wilfred Espinet that there must be a higher level of oil production to keep the refinery running.
“For the chairman to be talking about we only have 45,000 bpd production and saying the refinery needs 160,000 bpd and therefore you cannot run a refinery profitably, there are countries which have no oil at all and who have refineries operating because they have to import everything to process and refine. So that by itself could never be a reasonable conclusion. We are located right next to the country with the largest oil reserves in the world. Have they considered importing crude from Venezuela?”
He called on Government to explore every available option before taking such a drastic decision to send home workers. He said retrenchment and laying off should always be the last resort.
In an address to the nation on Sunday, Prime Minister Dr Keith Rowley Government had little choice but to close the refinery, stating Petrotrin would need a $25 billion cash bailout to stay alive. Petrotrin loses $2 billion a year, on a recurring debt of $11 billion.
He said the refining assets of would be placed in a new company for potential buyers, including the OWTU, while Petrotrin will focus on extraction and exportation of oil. The Prime Minister is due to meet trade unions, led by the OWTU, today, mostly likely to discuss the state of Petrotrin and the movement’s call for all workers to engage in a day of rest and reflection tomorrow in protest of Government’s economic policies.
(Stabroek News, 2.Sep.2018) — Trinidad Opposition Leader Kamla Persad Bissessar has raised the prospect of Guyana oil being used to rescue the beleaguered Petrotrin refinery but Prime Minister Keith Rowley last evening said the aged facility had no reasonable prospect.
Defending the decision by his government to close the over 100- year-old refinery, Rowley yesterday said he had no choice as the climbing debt was too much to saddle his country’s taxpayers with.
“Petrotrin was overburdened with debt. The net debt at financial year-end 2015 amounted to TT$11.4 billion,” Rowley told the twin-island nation in an address which was live streamed.
According to the Trinidadian Prime Minister, “Left as it is, Petrotrin will require an immediate TT$25 billion cash injection just to stay alive” and “there is no way that the company can find this money” as “no financier will lend it because the company simply will not be able to repay such an additional loan.”
He believes that it would be more feasible for the country to focus on exploration and production and export the 40,000 barrels of oil equivalent per day it produces and import the 25,000 barrels it needs for consumption.
“Today with a refining capacity of 140,000 barrels per day, the local production available for refining is 40,000 barrels. We really depend, mostly, on a daily importation of 100,000 barrels per day, which we refine at a significant loss.”
He would later add, “We consume less than 25,000 (barrels) of refined products. It makes far more sense to export the 40,000 that we produce and import what we need. Each barrel will be sold externally on the open market.”
Last week Tuesday it was announced that Petrotrin’s refining and marketing operations would be shuttered. With TT$8 billion in losses in the past five years and a bullet payment of US$850 million due in 2019, Petrotrin chairman Wilfred Espinet had said that terminating its refining and marketing operations and retrenching 1,700 permanent and casual employees was the only way to save the company after 100 years of operations in the industry. Petrotrin also owes the Trinidad Government more than TT$3 billion in taxes and royalties.
Rowley’s position last evening came even as that country’s former Prime Minister, Persad Bissessar called on him to pursue negotiations with Guyana to refine its oil there in order to save the company.
“I understand Guyana has found another well … can we not group in some way and find a way to work together as a CARICOM where we can help them refine their oil,” she told reporters on Saturday at her Legal Clinic Siparia Constituency Office and which was reported by the Trinidadian newspaper Newsday. Guyana won’t begin pumping oil before 2020.
“I am calling on him to let good sense prevail to be very cautious in making such a drastic and dangerous move, this will have a ripple effect throughout the economy and the country…of course they (Guyana) will build their own refinery but we have one and many of the units in the refinery at Petrotrin are new, so a lot of money has been invested on the refinery side and now they are shutting it down. It is total nonsense,” she added.
Currently, it is still unclear what the Guyana Government would do with its share – 12.5% – of profit oil from 2020 onwards, from its agreement with ExxonMobil but one government official said that several options are being explored.
One Minister yesterday said that it “Is an ongoing discussion and several workshops and engagements have been held. The options are to ask Exxon or to market, do our own marketing or take our share in kind and send it for refining somewhere. Several proposals have been received and the final decision-making process will be guided by the Department of Energy.”
Sources have told this newspaper that it has been suggested to the government that Guyana “takes a stake in the Petrotrin refinery and in this way acquire a strategic asset.” In that way, according to one source, Guyana could have its share of oil from the agreement with ExxonMobil and affiliates refined closer to home and secure jobs for persons in both countries.
But while it is still too early to tell what the Guyana and Trinidad governments will decide, a source said, “Guyana may gain a controlling or sizeable share and develop refining capacity and meet many of the outcomes from having a refinery without having to pay as much. Additionally, we can ensure that a percentage of labour is Guyanese who will have to be trained and also we can address some CARICOM integration goals.”
Last evening, the Trinidad PM made no mention of Guyana or even hinted at restarting the refinery although he said that Petrotrin’s refinery assets would be placed in a separate company.
“We largely operate a business that is largely dependent on foreign oil inputs. All the other refineries in the region that had this same business model, Aruba, Curacao and St Croix have long since closed because they saw it as not a viable business,” Rowley said.
“Our Pointe-à-Pierre refinery is 101 years old and has reached the end of its commercially viable days it is now at a state where it is haemorrhaging cash and the cost of rehabilitating it is way more than its potential to ever be potentially viable, competitive or sustainable. The only commercially sound and viable option is to close the refinery, export Petrotrin’s oil and to import products,” he also noted.
The government of the US Virgin Islands last month approved a proposed US$1.4-billion operating agreement between itself and Arclight Capital Partners LLC, Boston, to restart the former Hovensa Refinery at Limetree Bay, St Croix. The refinery is scheduled for opening by the end of 2019. With an initial crude processing capacity of about 200,000 barrels per day according to the USVI government, the investment is expected to create 1,200 local jobs during construction and as many as 700 permanent jobs upon restarting the facility. The Hovensa refinery was a joint venture between Hess Corporation and Petroleos de Venezuela until it closed in 2012.
Rowley said that the Petrotrin model has outlived its usefulness and it was now time to accept that and equip the company to stand the test of the ever changing global economy.
“Petrotrin’s model has become obsolete and uncompetitive and its operating practices are inefficient. The company was nowhere in line with global industry standards and best practices. In fact the company’s operations are identified as being among the most inefficient in the world. The company if left as it is would continue to operate at a loss at a rate of aboutTT$2B a year. It is not a viable option, to do so is to saddle future generations with a huge debt burden. If not dealt with now, the negative effects will get worst and it simply cannot work. To break even would cost TT$7B and would involve significant staff cuts and an ultra-low sulphur refinery,”
He believed that the “Gross mismanagement of the national patrimony within the last decade” such as many cost overruns and delays in projects for the company was part of the reason government is now saddled with the large debt.
A committee, headed by TT’s former Energy Ministry Permanent Secretary, Selwyn Lashley, had reported on the dismal state of the company since 2016 and the report showed that in addition to receiving huge subsidies from the state, Petrotrin was not paying its fair share of taxes collected to government.
“Taxes and royalties owed to Government amounted to $3.1 billion as at February 28, 2017. The company was not complying with the tax laws and even when it collected taxes from companies that paid their taxes to Petrotrin for onward transmission to the Ministry of Finance, Petrotrin was huffing and utilizing those monies in its own operations.”
“Money that should be turned over to the Ministry of Finance is held within the company and that is illegal,” he added.
(Stabroek News, Marcelle Thomas, 2.Sep.2018) — A long-delayed Memorandum of Understanding (MoU) between Guyana and Trinidad on energy cooperation is expected to be signed in the coming weeks, according to Trinidad and Tobago’s Minister of Energy, Franklin Khan.
“The Government of Trinidad and Tobago is due to sign a memorandum of energy cooperation in the coming weeks, most likely there in Georgetown,” Khan told Sunday Stabroek via telephone.
The minister did not go into the details of the agreement and said that would be disclosed after the signing. He, however, emphasised that his government is willing to offer its assistance as this country prepares for first oil. “When the Government of Trinidad and Tobago is in Guyana, yes we will offer help and advice to the Government of Guyana on your emerging oil and gas sector and obviously seek their concurrence…,” Khan said.
No official from government was available for comment or to give details on what the agreement would contain. Minister of State Joseph Harmon, who is the minister responsible for oil and gas matters, was out of the country and would not be back until next week, his office said. Several calls to the recently-appointed Head of the Department of Energy, Dr Mark Bynoe, went unanswered.
Since 2016, discussions commenced between Guyana and Trinidad on an MoU under which the latter would provide various forms of support to the oil and gas sector in Guyana. Initiated during a visit here in 2016 by a Trinidad and Tobago delegation led by the then Energy Minister Nicole Olivierre, the MoU was expected to be signed at the end of that year but that did not happen. At the time, Minister of Natural Resources Raphael Trotman had said that the pact would see Guyana receiving support in a range of areas, including advanced technical training for local personnel in the industry.
News of the proposed energy cooperation agreement between Georgetown and Port-of-Spain comes days after the Trinidad and Tobago government inked an agreement with Venezuela to import natural gas from the Spanish-speaking country. That agreement would see the twin-island republic purchasing some 150 million standard cubic feet of natural gas per day from Venezuela’s prolific Dragon Field.
Meanwhile, sources told Sunday Stabroek that it has been suggested to government that Guyana “takes a stake in the Petrotrin refinery and in this way acquire a strategic asset.” In that way, according to one source, Guyana could have its share of oil from the agreement with ExxonMobil and affiliates refined closer to home and secure jobs for persons in both countries.
Last Tuesday, it was announced that Petrotrin’s refining and marketing operations would be shuttered. With TT$8 billion in losses in the past five years and a bullet payment of US$850 million due in 2019, Petrotrin chairman Wilfred Espinet had said that terminating its refining and marketing operations and retrenching 1,700 permanent and casual employees was the only way to save the company after 100 years of operations in the industry. Petrotrin also has a TT$12 billion debt and owes the Trinidad Government more than TT$3 billion in taxes and royalties.
According to the Trinidad Guardian newspaper, the Oilfield Workers’ Trade Union (OWTU) leader, Ancel Roget, had warned that the refinery will be sold to private investors, but Espinet had dismissed this, saying, “There is no likelihood of that refinery being sold.”
Khan told Stabroek News that Petrotrin’s closure does “not really” affect the opportunity for Guyana to still look to T&T to refine its oil or look elsewhere. “We have decided to close the refinery because of its present configuration and cost structure. It is losing money and it’s not sustainable in its current form,” he said. “However, other business models could be proposed,” he added.
But while it is still early to tell what the Guyana and Trinidad government will decide, a source said, “Guyana may gain a controlling or sizeable share and develop refining capacity and meet many of the outcomes from having a refinery without having to pay as much. Additionally, we can ensure that a percentage of labour is Guyanese who will have to be trained and also we can address some CARICOM integration goals.”
A government official believes that Guyana has to be mindful of such a move, given the recent agreement Trinidad inked with Venezuela and this country’s longstanding border controversy with Venezuela. “We have to be mindful of a growing relationship between Venezuela and Trinidad and Tobago and won’t want to compromise our energy security by having the asset in a nation where the government grows uncomfortably close with our main detractor…Venezuela may try to influence the [Trinidad and Tobago’s] relationship with Guyana,” the official said.
Khan was asked about possible perceptions and future implications of his country’s agreement with Venezuela but would only say, “We know of all the geopolitics and so on and will answer those questions then.” As to whether the government of Guyana ever discussed acquiring a stake in the now defunct Petrotrin refinery with Port-of-Spain, Khan said neither him nor his government has ever had that discussion.
Currently, it is still unclear what government would do with its share – about 14 percent – of profit oil from 2020 onwards, from its profit sharing agreement with ExxonMobil. As of last year, before the Department of Energy was formed, Trotman had ruled out this country investing in an oil refinery.
“We have done some studies on the feasibility of an oil refinery. We have opened that study for public debate and discussions… Government has concluded that it, as a government, cannot spend US$5 billion dollars in an oil refinery,” he had said.
The US$5 billion sum he referred to was the figure that Director of Advisory Services at Hartree, Pedro Haas, had told government it would cost to build a refinery here. Haas was hired by the David Granger-led APNU+AFC government to carry out a feasibility study for an oil refinery in Guyana. From his analysis, the cost to construct such a facility would be some US$5 billion, with at least half the invested amount lost upon commissioning.
ExxonMobil was asked by this newspaper if it has decided on a refining company to whom it would sell its share of crude. Through its Public and Government Affairs Officer Deedra Moe, the company responded: “We sell crude oil on the open market. ExxonMobil has an equity crude oil marketing group – an integrated operations, logistics and trading team – that operates around the world and is responsible for marketing ExxonMobil’s global production of crude oil and condensates.”
And while Guyana prepares for first oil in 2020, the government of the US Virgin Islands last month approved a proposed US$1.4-billion operating agreement between itself and Arclight Capital Partners LLC, Boston, to restart the former Hovensa Refinery at Limetree Bay, St Croix. The refinery is scheduled for opening by the end of 2019. With an initial crude processing capacity of about 200,000 barrels per day according to the USVI government, the investment is expected to create 1,200 local jobs during construction and as many as 700 permanent jobs upon restarting the facility. The Hovensa refinery was a joint venture between Hess Corporation and Petroleos de Venezuela until it closed in 2012.
Hess is one of the partners in ExxonMobil’s 6.6 million acres Stabroek Block operations, which last week announced its ninth oil discovery.
Moe was asked if ExxonMobil was looking at refining in St. Croix and responded, “I am not aware of anything regarding St. Croix.”
(Trinidad and Tobago Newsday, Carla Bridglal, 31.Aug.2018) — Severance packages for Petrotrin workers will cost upwards of $1 billion, Energy Minister Franklin Khan estimated yesterday. But compared to the Pointe-a-Pierre refinery’s annual loss—estimated at $2 billion—that’s a small price to pay.
Khan said the company was still “crunching the numbers” but will offer early retirement for people over 55, as well as “exit packages” for young workers.
“That formula is still being worked out. The figure will be huge because the base salary at Petrotrin is big.”
While the wages at the refinery aren’t necessarily the highest in the company, he said that department did have the highest overtime bill, but overtime doesn’t come into play in the determination.
Khan acknowledged the human impact of the 101-year-old refinery’s closure, saying as a former employee, he empathised with them.
“The numbers did not stack up, otherwise we would have put the economy at risk. Having said that, no matter what spin you put on it there are approximately 3,000 families affected. I am very much conscious of it, and so is the Prime Minister. My entire career was at Petrotrin. I know most of those workers. I supervised some of them. I have a great deal of empathy for them. That is why we would be working out proper packages. We want a spin-off effect like what happened in Couva and Chaguanas after Caroni (1975) Ltd closed down.” Even if the refinery is closed, there will still be lots of activity in the exploration and production side. “I’m not too concerned about La Brea, Santa Flora and Point Fortin. The South Western peninsula is good. The major challenges are the communities of Marabella and Gasparillo, the catchment areas for the refinery.”
The refinery will initially be transformed into a terminalling facility to import fuel in bulk for onward shipping to the Caricom market.
Khan added that even though the company will have to now import fuel, there will be no change to the fuel subsidy. The fuel subsidy is estimated to be $900 million this fiscal year. There’s also a subsidy on liquefied petroleum gas (LPG) or cooking gas, for about $500 million. Petrotrin absorbs the LPG subsidy, but state-owned fuel distributor, National Petroleum, absorbs the fuel subsidy, so the change at Petrotrin will not impact the current subsidy model.
Khan also defended the government’s reticence to publicly comment on the decision to close the refinery. Dr Rowley is expected to address the nation on Sunday. “The announcement was made by the board of directors. Everybody in this country says it’s political interference that killed Petrotrin, so we empowered the board. We gave them the autonomy to act. They made a proposal, it was approved by Cabinet. We don’t have to be on a ball-by-ball commentary in that regard because the very thing the population is accusing the politicians of is what you are asking me to do.”
(Trinidad and Tobago Newsday, Yvonne Webb, 31.Aug.2018) — Lennox Petroleum Services Ltd has initiated legal action against members of the Oilfield Workers Trade Union (OWTU), one day after they protested inside the company’s Princess Margaret Street, San Fernando office. CEO Wayne Persad has also applied for an injunction to prevent the union from trespassing on his premises or continuing “their illegal actions.”
In a statement, Persad claimed that on Wednesday, about 40 members of the OWTU forcibly entered the compound, assaulted a security officer and then searched the compound. He said they shouted his name and asked him to come out.
Persad said, consistent with their company’s emergency policies and procedures, the police was notified of the “intrusion” and responded within minutes of the report being made.
OWTU’s chief labour relations officer Lyndon Mendoza, who led the demonstration, questioned the large complement of heavily-armed officers who arrived in about six or seven marked police vehicles, when all the workers did was hold hands, pray and sing union songs. He said they went to Lennox Petroleum, an off-shore company, to deliver a letter on behalf of workers who were owed retroactive payment dating back some three years ago. He said collective bargaining arrangements were signed to this effect. He said the union was there to show solidarity with the workers.
In his statement, Persad said the acts committed were extremely unwarranted and were designed to intimidate management and staff.
He explained that by letter, dated August 27, the company was informed by the OWTU that the dispute which gave rise to the protest was reported to the Ministry of Labour. Given that the company was invited by the ministry to meet with the union on September 11, Persad said Wednesday’s action showed disrespect to the Industrial Relations Act and its process. He said the protest action was a clear attempt to circumvent the procedures stipulated under the act.
“At present, our company is in a transitional period as our majority shareholder/director/founder, Pamela Persad passed away on August 18. The timing of the protest less than a week after the burial of Mrs Persad was extremely insensitive.”
Persad also denied that it employs over 250 workers or that any of their workers are members of the OWTU. He said none of the protestors were employees of his company, neither were they authorised to be on the compound.
(Trinidad and Tobago Newsday, Kiran Mathur Mohammed, Camille Moreno, 30.Aug.2018) — The Dragon gas deal signed last Saturday is worth celebrating. The clink of glasses will be heard in boardrooms in both countries. The government deserves it for getting this far, amid the chaos in Venezuela, and the spectre of international sanctions.
At least one senior banker I’ve spoken to noted that the agreement rings hollow for Venezuelans on Maduro’s Twitter feed who mocked the grand signing ceremony, as thousands of hungry and desperate refugees flee to Trinidad. Instability there may still upset the deal’s execution, and could result in costly penalties if supply is ever interrupted. That said, there is much to be hopeful about.
Another energy executive reckons that this could eventually lead to Venezuela exporting its onshore gas (currently being flared off and wasted) to Trinidad: improving efficiency and the environment. It could even lead to discussions on how we can help the refugees coming to TT, and seriously engage with Venezuela on human rights.
We are massively short of gas. It may sound strange, given that we export it and the world is awash with the good stuff. Gas is firstly used in Trinidad to generate power. Then, almost all the rest is liquefied and exported. What remains is used as “feedstock” for the plants in Point Lisas that produce chemicals that are exported, mainly for fertiliser. The energy producers have locked-in contracts that mean that almost all of our gas is exported.
When we were producing enough and earning tax dollars, this was a good deal. But our gas production has been in continual decline. There isn’t enough gas to satisfy local and external demand. Since the multinational energy companies make more money exporting gas than by selling it locally, this means that the plants in Point Lisas end up starved of gas. Some have shut down and sent home hundreds of workers. To help plug this shortage, and boost revenues, the government aims to pipe in gas from the Dragon field in Venezuela’s waters.
The celebration has been earned. But back to work. We won’t see first gas from the Dragon field until 2020. Moreover, as an energy executive pointed out, the gas is coming from Venezuela and will not be directly subject to our petroleum taxes – unlike gas produced from Trinidad waters. No doubt this is one of the reasons the energy companies are so keen to sign up. The Dragon field will also produce just 150 million cubic feet of gas per day, compared to our average current consumption of 3.46 billion cubic feet per day. And this is consumption with a number of mothballed plants. So, what can we do quickly?
It turns out that energy efficiency – once laughed at in a country with gas to burn – could be one additional way forward. Our lumbering power plants, partially owned and operated by multinational corporations, are ripe for investments in efficiency – and the operators have said so themselves. Powergen alone could save up to US$45 million a year in gas if it invested US$80 million to make their plant more efficient. This is according to both the National Gas Company (NGC), and youth-led non-profit IAmMovement’s co-founder Jonathan Barcant. This gas could be freed up for our chemical industry – allowing it to bring back workers. The numbers get even more impressive if renewable energy or LED bulbs are considered as gas saving alternatives.
With numbers like that, why haven’t they done it already?
The answer lies in the incentives embedded in the power-purchase agreements signed between the TT Electricity Commission (TTEC), the government and the international power operators. TTEC pays the generators by capacity (the amount of electricity they are able to produce) instead of by the amount of electricity they actually produce.
At the same time, TTEC guarantees and pays for the gas supply to the power plants. And in practice, TTEC hasn’t actually paid for any of the gas it receives from NGC.
So Powergen doesn’t benefit by investing in more efficient plants, even though the country as a whole would save money.
If an agreement was signed that allowed Powergen to benefit from investments in energy efficiency: this would be a win-win. Powergen would boost its bottom line, have a better operating plant, and (yes) reduce polluting carbon emissions.
Gas would be freed up for the downstream chemical plants, and NGC would benefit by finally getting paid. Most of all, the workers and engineers worried in their houses in Couva and Freeport could breathe just a little easier.
Kiran Mathur Mohammed is a social entrepreneur, economist and businessman. He is a former banker, and a graduate of the University of Edinburgh.
(Trinidad and Tobago Newsday, Carla Bridglal, 30.Aug.2018) — On the eve of the country’s 56th anniversary of Independence, the board of Petrotrin announced it was shutting down the state oil company’s refinery and marketing operations, choosing instead to focus on exploration and production.
Over 2,500 jobs will be affected, and all refining jobs — about 1,700 — will be terminated as the company begins its transition period on October 1.
The tragedy of Petrotrin goes beyond the immediate impact of job losses, though. One of the major casualties of this decision is the 101-year-old Pointe-a-Pierre refinery – once the crown jewel in a collection of state enterprises that has now lost its lustre, a beacon of nationalism whose light is now dulled.
“We are now 101 years old in the refinery business and the purpose of getting into it is no longer relevant, but we are holding on to it because there are emotional ties. And because it is there, what we’ve done now as a board is look at it hard and said, ‘Hey, let’s start from a clean sheet’,” chairman Wilfred Espinet told a media conference on Tuesday.
In the beginning
The Pointe-a-Pierre refinery has had a storied history. First set up in 1917, it was once the biggest in the British Empire. During World War II the refinery was identified as an asset to be “protected at all cost” as a major supplier of aircraft fuel for the Allied forces. In 1940, refining capacity in Trinidad and Tobago was recorded at 28.5 million barrels per year.
In 1956, US company Texaco acquired the refinery, and in 1985, the government, through Trintoc (1974) bought over Texaco’s assets except Trinmar. In 1993, Trintoc and Trintopec were incorporated into Petrotrin. The board had most recently claimed that as part of the restructuring, initiated on March 1, it would split the company’s operations into two arms — exploration and production and refining and marketing. The announcement to shut down the refinery, then, came as a surprise to most.
It’s a bold move, because the nostalgia surrounding Petrotrin and Pointe-a-Pierre is palpable — especially for south Trinidad. The livelihoods of thousands more than 5,000 direct employees of the company are intertwined with the refinery — from restaurants to the technical service providers who have had their base in and around the San Fernando/Marabella area, including Vistabella and Gasparillo.
“It’s a whole domino effect,” said president of the San Fernando Business Association, Daphne Bartlett.
Local historian Prof Brinsley Samaroo has likened the refinery’s end to the closure of Caroni (1975) Ltd, which also had rippling effects throughout local communities of south and central Trinidad.
“The refinery was crucial to the development of Trinidad, from Claxton Bay to San Fernando and beyond. The whole area was developed when the refinery was opened and the opportunities it provided,” he told Business Day.
It’s likely we’ll see a repetition of the economic displacement that happened after Caroni was shut down, and similar areas, like south and central, he said. This time may even be worse though — when Caroni closed, the refinery was still running, providing an economic buffer for the area.
“People in south depend directly on the oil industry. The whole economy hinged on the oil industry since the closure of the sugar factory and we haven’t been able to diversify the economy since then, so we continue to depend on oil. The closure of the refinery is not a good sign and I think we are in for a rough period for the whole country,” Samaroo said.
Many questions to answer
For the wider economy, though, there are still questions that need to be answered. The Petrotrin refinery provided cheap fuel for the local market. Now the country will have to import the equivalent of 25,000 barrels of oil per day to supply the economy, although the amount will hopefully be offset by the how much the company produces — about 40,000 barrels per day. Nonetheless, this will likely require some adjustment, most notably to the fuel subsidy. According to the TT Energy Chamber, over 90 percent of Petrotrin’s sales to the local market have been fuel — 46 per cent is from gasoline, 37 per cent from diesel, and 11 per cent from jet fuel. Five per cent is from liquefied petroleum gas (LPG or cooking gas), but the company has said it will continue to supply this.
“About 20 per cent of the refinery’s output is consumed locally. The refinery is our sole source of gasoline, diesel, and jet fuel. If we don’t have an operational refinery we will of course have to import fuel. Another 17 per cent is exported to Caricom with the main markets being Jamaica, Barbados and Guyana. These countries will have to source fuel extra-regionally,” former energy minster and now consultant and lecturer Kevin Ramnarine said.
He was also concerned about the uncertainty of the subsidy. “The fuel subsidy is based on the ex-refinery price. Since there will be no refinery there will be no ex-refinery price. So, what happens to the subsidy? The country will likely spend about $900 million this year subsidising liquid fuels to the population,” he said.
Rooting out debt ‘cancer’
Petrotrin’s lack of competitiveness has consistently been cited by the board as the fundamental reason for restructuring. In February, during a presentation to a joint select committee of Parliament, the board noted that the company’s key performance indicators, when placed against international benchmarks put the company at the “lowest of the low” in terms of competitiveness.
The refinery has a nameplate capacity of 140,000 barrels of oil per day — it therefore has to import 100,000 barrels a day to remain viable, making it a net consumer of foreign exchange.
“We had a continued programme of looking at all sorts of ways to make this work. We came to the conclusion that if we wanted to be able to pay back the debt, and if we wanted to be able to have a profitable company that could be sustained over time, we would have to take out what was the cancer of the operation and that would have been the refining and marketing.”
And the company has a lot of debt: over $10 billion — including $3 billion to the government. It requires a $25 billion cash injection to stay alive, and next year, a US$850 million bullet payment on a bond issue comes due. In dire tones on Sunday, Energy Minister Franklin Khan said the company had the potential to bankrupt the country.
Even some of the government’s biggest critics have agreed that something needed to be done to get the company back to profitability.
“Things definitely needed to be restructured,” said Bartlett. Ramnarine agreed, especially in the context of the debt burden of the company
Save the refinery
Despite the board’s claims then, that it needed to cut out the “cancer” of the refinery, though, Ramnarine and Bartlett believe the refinery could have been salvaged.
“I don’t think Petrotrin would have bankrupted the country. Petrotrin and its refinery are completely redeemable but there is a need to push for efficiency and cost reduction. US refineries are currently experiencing a ‘golden age’ and are running at record levels in response to robust domestic and international demand for gasoline and fuel oil. The paradigm in the refining business is competitiveness. Having said that we need to appreciate that the country spent US$1.6 billion on the refinery in the last decade and we have some relatively new plants there such as the continuous catalytic reforming plant (Cat Cracker), the iso plant and the acid/alkyl plant,” he said.
Bartlett said instead of shutting the refinery, the country should have instead looked towards improving it to take advantage of opportunities in places like Guyana, which is currently experiencing the first waves of an oil boom.
“We know it can be viable because of what’s happening in Guyana. State-owned companies do not belong to politicians. A decision like this should have been made with open discussion. It makes me wonder, did they think this decision through or did they just want to get rid of it?”
(Trinidad and Tobago Newsday, Sasha Harrinanan, 29.Aug.2018) — Former energy ministers Kevin Ramnarine and Carolyn Seepersad-Bachan, both of whom served under the previous administration, are asking if Petrotrin’s board considered the wider impact of closing its refinery.
Ramnarine, in a statement after the board’s announcement yesterday, said “the closure of the refinery has to be considered against the impact it has on the economy, (including) the impact on hundreds of contractors and energy service companies who also employ thousands of people. There is the impact on the fence-line communities of Marabella, Vistabella, Gasparillo and San Fernando.”
Seepersad-Bachan, speaking with Newsday, asked if Petrotrin had “considered the possibility of other job cuts related to the refinery’s closure. What about all the other small contractors and spin-off service operations that support Petrotrin’s refinery at this point in time?” Expressing concern about how meaningful planned consultations can be in such a relatively short period – the refinery’s operations will start being phased out from October 1 – the Congress of the People (COP) political leader said her party will soon hold a series of “national conversations” on the matter.
Ramnarine highlighted the supply impact locally and regionally of the impending closure.
About 20 per cent of the refinery’s output is consumed locally. It is TT’s “sole source of gasoline, diesel, jet fuel et cetera. If we don’t have an operational refinery, we will of course have to import fuel.
(Energy Analytics Institute, Ian Silverman, 29.Aug.2018) — It’s official: Petrotrin or the Petroleum Company of Trinidad and Tobago Limited will cease to operate its lone refinery located at Pointe-a-Pierre.
What follows are details about the company, as per its website.
We are an integrated oil and gas company, engaged in the full range of petroleum operations including the exploration for, development of and production of hydrocarbons, and the manufacturing and marketing of a wide range of petroleum products.
Our position in the energy sector is strengthened by more than 100 years of predecessor experience in crude oil production and manufacturing in this country. (See Our History)
Our organization, Petroleum Company of Trinidad and Tobago Limited (Petrotrin) was incorporated on January 21, 1993 to consolidate and operate the petroleum producing, refining and marketing assets of State-owned enterprises: Trinidad and Tobago Oil Company Limited (Trintoc) and Trinidad and Tobago Petroleum Company Limited (Trintopec). In 2000, these assets were further extended with the acquisition of Trinmar Operations.
As a state-owned Company, Petrotrin is under the direct control of the Minister of Finance acting as Corporation Sole.
The Ministry of Energy and Energy Affairs is the line ministry that provides the specialized technical analyses and statutory approvals for the Company’s operations, while ensuring adherence to the Government’s policy guidelines. (See Governance)
Today, we are Trinidad and Tobago’s largest crude oil producers. We also have an interest in some natural gas production. Our operations and partnerships cover most of the island of Trinidad and much of the waters surrounding the island of Tobago.
We operate Trinidad and Tobago’s only petroleum refinery. Our refinery has a full conversion capacity of up to 168,000 bpd and average throughput of approximately 112, 974 bpd. Our petroleum products are sold locally and as well as to customers across the Caribbean, Latin America and the eastern seaboard of the United States of America. (See Our Operations)
We are one of the largest employers in Trinidad and Tobago with a dedicated workforce of more than 5,000 people. Our team is committed to optimizing our energy resources for the benefit of our stakeholders. As such, we are committed to operational excellence, personal accountability and sustainable practices throughout our operations. (See Sustainable Development)
Together, our people, rich history, extensive operations, sustainable practices, long standing relationships and strategic mid-Atlantic location have strengthened customer confidence in our position as a leading supplier of petroleum products.
Petrotrin’s Board of Directors
FREQUENTLY ASKED QUESTIONS
What is Petrotrin’s main business?
Petroleum Company of Trinidad and Tobago Limited (Petrotrin) is an integrated oil and gas company engaged in the full range of petroleum operations including the exploration for, development of and production of hydrocarbons, and the manufacturing and marketing of a wide range of petroleum products.
When was Petrotrin incorporated?
Petrotrin was incorporated in January 1993, merging selected assets of state owned Trinidad and Tobago Oil Company (TRINTOC) and Trinidad and Tobago Petroleum Company (TRINTOPEC).
Our roots can however be traced to the beginning of commercial oil production in Trinidad and Tobago through predecessors who were listed among the nation’s earliest prospectors in oil and gas.
Who owns Petrotrin?
Petrotrin is a limited liability company, wholly owned by the Government of the Republic of Trinidad and Tobago. The Company is under the direct control of the Minister of Finance as Corporation Sole. The Ministry of Energy and Energy Affairs is the line ministry that provides specialized technical analyses and statutory approvals for our operations while ensuring adherence to Government’s policy guidelines.
How many people are employed by Petrotrin?
Petrotrin has a combined workforce of more than 5,000 employees, the majority of whom are in the core operating areas. Indirect employment is also provided for thousands more.
Where is Petrotrin’s Refinery located?
Our Refinery is located at Pointe-a-Pierre, on the west coast of Trinidad on 2,000 acres of land, approximately 56 kilometres north of San Fernando along the coast of the Gulf of Paria.
What types of products are processed at Petrotrin’s refinery?
Our main refined petroleum products include Liquefied Petroleum Gas, Aviation Fuel, Motor Gasoline, Diesel and Fuel Oil.
Where are Petrotrin’s E&P operations located?
Petrotrin’s E&P operations are spread across the southwestern peninsula of Trinidad. The Company also has E&P operations offshore. Petrotrin operates several E&P offices located at Santa Flora, Point Fortin, Penal, Guayaguayare and Forest Reserve.
Aviation Jet Fuel is a grade of kerosene intended for aircraft powered by turbine engines due to its high flashpoint.
Aviation Gasoline or Avgas is a grade of gasoline used in the internal combustion engines of aircraft. With a higher octane than Motor Gasoline, Avgas is highly refined so that it remains in a liquid state at low pressure in high altitude.
Diesel Heating Oil
Diesel is an important transportation fuel used in diesel engines found in vehicles, heavy machinery, boats and even power generators.
Heavier than diesel, fuel oil is typically used for heating, bunkering and other industrial purposes. Low and medium sulphur fuel oils are available at Petrotrin. Typically, the material is low pour, low metals with less than 8% asphaltenes.
Liquified Petroleum Gas
Liquefied Petroleum Gas or LPG is a group of gases, mainly propane and butane, that have been liquefied under high pressures. LPG is used in a variety of ways including heating, cooking and refrigeration.
At Petrotrin, pelletized sulphur is available for loading in bulk by conveyor belt.
Lighter than Diesel Fuel, Motor Gasoline is the main transportation fuel used in cars and light transportation vehicles. Motor Gasoline has different grades with varying octane numbers that remark on a fuel’s resistance to knock.
We manufacture motor gasolines to customer specifications. We supply the local, regional, Latin American and US Gulf Coast markets.
(Trinidad Express, 28.Aug.2018) — It’s official. Petrotrin’s refinery is to close. And 2,600 workers will be impacted.
The Petrotrin Board of Directors met Tuesday August 28 with its employee representative unions and the Company’s management to announce plans to end Petrotrin’s oil refining operations at Pointe-a-Pierre and to redesign entirely its Exploration and Production business.
According to a statement from Petrotirn, the restructuring exercise is geared to curtail losses at the state owned oil company and get it on a path to sustainable profitability.
Approximately 2,600 permanent jobs will be affected – the redesigned Exploration and Production business will have approximately 800 workers and all 1,700 jobs in refining will be terminated. Petrotrin is committed to cushioning the effects of any fallout that occurs from the planned changes.
The announcement follows months of careful review and analysis by the Company’s Board of Directors, which was appointed last September to identify the problems at Petrotrin and take the steps necessary to make the Company self-sustainable and profitable.
Petrotrin has lost a total of about TT$8 billion in the last five years; is TT$12 billion in debt; and owes the Government of Trinidad and Tobago more than TT$3 billion in taxes and royalties.
The Company currently requires a cash injection of TT$25 billion to stay alive –– to refresh its infrastructure, and to repay its debt –– and even with that, if left as is, it is projected to continue losing about TT$2 billion a year.
Chairman Wilfred Espinet said: “With the termination of the refining operations and the redesign of Exploration and Production, Petrotrin will now be able to independently finance all of its debt and become a sustainable business.”
“Petrotrin is no longer producing enough oil to operate the Pointe-a-Pierre refinery efficiently: We are producing approximately 40,000 barrels of oil a day and the refinery operates at a capacity of 140,000 barrels a day, so we have to go to the market to buy about 100,000 barrels of oil to make up the shortfall. This results in a net loss in foreign exchange.”
The refining of oil will be phased out and the Company will import the refined products (gasoline, diesel, aviation fuels, etc.) that the country needs –– approximately 25,000 barrels of oil equivalent a day. All of the Company’s oil will be exported.
Espinet said: “Our goal is for Petrotrin be an internationally competitive and sustainably profitable leader in the local energy sector; and an employer of choice, that is a source of national pride.”
The period of transition will commence on October 1, 2018.
According to the company, the Board of Directors is taking all requisite steps to facilitate a smooth and efficient period of transition with safety and the security of the country’s fuel supply being its two priorities.
Petrotrin will be meeting with all of its stakeholders during the coming weeks to discuss how the proposed changes may affect them.
(Trinidad Express, Ria Taitt, 28.Aug.2018) — The Government has decided to shut down the refinery of State oil company Petrotrin.
The country can no longer afford to continue to refine oil and lose billions of dollars in this process, a senior Cabinet source told the Express yesterday.
The company will instead be expanding its operations in oil exploration and production, the source said.
The source said Oilfields Workers’ Trade Union (OWTU) president general Ancel Roget was told “in no uncertain terms that the major restructuring at Petrotrin will be that Trinidad and Tobago would be moving out of the refinery business because it does not have oil to refine”.
(Energy Analytics Institute, Ian Silverman, 27.Aug.2018) —Trinidad and Tobago is relying on Russia as its main source of imported crude oil.
Between January and June 2018, the small twin-island country imported over 15 million barrels of crude oil from the [Petrotrin] refinery. Of that, 40% of the crude oil imports came from Russia, 29% from Colombia, 22% from Gabon, 8% from Canada and 1% from Barbados, announced Trinidad and Tobago’s Energy Chamber in a twitter post.
Caribbean Economist Marla Dukharan commented on the situation in the following twitter post.
(Trinidad Guardian, 27.Aug.2018) — Government is giving no details on the pricing structure this country will pay for gas from the Dragon Field under the agreement signed with Venezuela on Saturday, but Energy Minister Franklin Khan is assuring that the pricing structure agreed to was competitive and followed “months of negotiation, serious intervention, serious sharing of information and serious sharing of economic models, to come up with an appropriate gas price”.
Speaking during a press conference at the Hyatt Regency in Port-of-Spain, yesterday, Khan said, “It is no cheap gas. It is competitively priced gas and is obviously no secret Dragon deal.”
Khan said Venezuela has the largest oil reserves in the world, larger than Saudi Arabia, Russia and the United States and has the fifth largest gas reserves in the world, which this country can benefit from.
“It’s a win-win situation, especially since we in Trinidad face challenges on the supply side,” he said.
T&T, he said, also has world-class gas infrastructure through which Venezuela can monetise its gas.
“This provides an ideal opportunity for Trinidad and Venezuela. If I can say so, I think it is a marriage made in heaven,” Khan said.
Khan said he took “umbrage” with the way the media reported on the deal signed in Caracas on Saturday by Prime Minister Dr Keith Rowley and Venezuelan President Nicholas Maduro, as he dismissed a report in another daily newspaper that under the deal the T&T Government would be buying the gas at a mere US$1 per MMBTU. Khan said that was simply trying to create mischief by telegraphing to the Venezuelan people that the government was selling “cheap gas to Trinidad and Tobago”. However, he said the price being paid was substantially more.
Both countries, according to Khan, have benefitted, as T&T could import the gas, process it into LNG and for downstream petrochemicals “and still make a profit and it is a price acceptable to the Venezuelans to get a good monetary return for the resources they own.”
Khan said when Rowley was asked by T&T Guardian journalist Curtis Williams about the price, “Dr Rowley said these gas prices are subject to strict confidentiality clauses. However, he took the liberty to say the prices are very competitive and in some cases lower than what we are paying to domestic upstream producers in Trinidad and Tobago”.
He said it was widely known in the energy sector that “the commercial terms of gas sales agreement are subject to the strictest confidentiality clauses”. As he revealed that he could not even answer a question in the Parliament on pricing when asked some time ago, he said because of the confidentiality clause.
“No government past or present, UNC or PNM, has ever made known to the public any negotiated price of gas,” Khan said.
The PM did, however, reveal that under the agreement the volume of gas to be provided will be 150 million cubic standard feet per day with an option to go to 300 million standard cubic feet per day.
On Saturday, Rowley and Maduro signed two documents – a base term sheet for the Dragon Gas deal which set out the commercial term for the gas sales agreement, including volume and price, which was signed by the Venezuelan state oil company PDVSA, Shell as the private investor and the National Gas Company.
Another agreement was signed where both governments committed to the implementation of the project and to see it to finality. Khan said while it was a cross-border relationship with Shell, PDVSA and NGC, “at its most fundamental level it is a government to government arrangement”. He said the gas deal had the effect of securing “a long-term symbiotic relationship with Venezuela”.
He said it was a pricing model and template to allow them to move forward with other fields, including the Loran Manatee, which was the first cross-border project identified between the two countries more than a decade ago.
The Loran-Manatee field contains in excess of 10 trillion cubic feet of gas with 7.3 TCF on the Venezuela side and 2.7 TCF on the Trinidad and Tobago side of the border. Khan said Maduro suggested and PM Rowley agreed “we should develop agreements for the production of Loran Manatee.”
(Trinidad and Tobago Newsday, Richardson Dhalai, 26.Aug.2018) — The Dragon gas deal may be “public relations and political gimmicks” which may not benefit TT.
That’s the view of Pointe-a-Pierre MP David Lee who, in a media release yesterday, cited the 2016 trade deal between TT and Venezuela saying some local manufacturers had not yet been paid for goods which had been delivered to the South American nation.
On Saturday, Prime Minister Dr Keith Rowley and Venezuela’s President Nicolas Maduro shook hands to seal the deal that will see TT for the first time processing Venezuelan natural gas.
However Lee, in his statement, said recent public statements by the TTMA have indicated that “some manufacturers have not yet been paid for goods delivered to Venezuela which formed part of a trade deal fostered between the governments of our nation and Venezuela in 2016.”
He said this is not only proof of government’s “failed commitment” to the manufacturing sector but also “signs of a government which continues to abandon its responsibility of protecting our nation’s economic framework.”
“We in the Opposition were always concerned with this agreement given the economic hardship being experienced by the Venezuelan Government as well as this Government’s track-record of incompetence.” Lee said several questions had been directed to the Trade and Industry Minister Paula Gopee- Scoon in the Parliament but she had “on each occasion would respond by saying that some payments were still being received for shipped goods.”
“It is therefore unacceptable and irresponsible that over one year since these questions were first posed and over two years since goods were first shipped to Venezuela manufacturers have not been adequately compensated.”
He said the trade deal was a “government to government initiative” and questions have to be asked why the minister failed to take a trade delegation to Venezuela to address the issue.
“Did Government, knowing that Venezuela would not be able to keep its financial commitment just use our manufacturers as a bargaining tool to gain access to Venezuelan natural gas? They called the Opposition Members unpatriotic when we questioned these deals however the issues presently surrounding these non-payments demonstrate why the Opposition did so. Therefore our nation must remain vigilante and find no comfort in the signing of the Dragon Gas Deal which took place yesterday in Venezuela as this could be all about Public relations and political gimmicks as was seen with this trade deal.”
(Loop News, 26.Aug.2018) — On August 25, 2018, an historic agreement was made between Prime Minister Dr Keith Rowley and Venezuelan President Nicolás Maduro for access the Venezuela’s Dragon Field.
Here are five things to know about the Dragon field gas deal:
Dragon will produce 150 million cubic feet per day
The Dragon field, part of the Mariscal Sucre offshore gas project, is projected to produce an estimated 150 million cubic feet per day of natural gas from four wells. The Dragon Field contains approximately 2.4 trillion cubic feet of natural gas.
The Mariscal Sucre Dragon and Patao fields, located in water depths between 328-427 feet (100-130 metres), are situated nearly 25 miles north of Venezuela’s Paria peninsula in Sucre state.
It’s expected that production from Venezuela’s four fields which comprise the Mariscal Sucre project – Mejillones, Rio Caribe, Dragon and Patao – will reach 1.2 billion cubic feet per day of natural gas and 28,000 barrels per day of condensates, and will be directed primarily toward export.
Gas to be transported via 30km gas pipeline
The gas will be transported to the Hibiscus platform off the north-west coast of Trinidad, just 18 kilometres from the gas field. Hibiscus is jointly owned by the T&T government and Shell.
The project involves the construction of a 30km gas pipeline – construction of pumping stations, metering systems and related facilities, the laying of gas pipelines, and the installation of safety and control systems.
In March 2017, Shell signed an agreement with NGC and PDVSA to build a 17km pipeline from the Dragon Gas Field to Hibiscus platform.
PM says details ‘confidential’
Details of the deal are ‘confidential’, according to Dr Rowley, but he said the agreed-upon price was ‘competitive’.
Dragon’s gas to be used for T&T products
In the first phase, the gas from the Dragon will boost the country’s gas supply for both the LNG and the petrochemical sectors. T&T plans to expand domestic gas production to 4.14 Bcf/d by the end of 2021.
Dragon project to cost approximately US$100 million
The project will cost an estimated US$100 million, according to media reports. First gas from Dragon is expected in 2020.
(Energy Analytics Institute, Piero Stewart, 25.Aug.2018) — Venezuela will send its Dragón field natural gas to Trinidad for processing.
That’s according to a deal signed today in Caracas between the governments of Trinidad and Tobago and Venezuela, reported Venezuela’s Ministry of Petroleum in a series of tweets. The countries were represented by Prime Minister Dr. Keith Rowley and President Nicolas Maduro, respectively.
#EnVivo 📹 | Palacio de Miraflores | Firma de acuerdos en materia energética entre la República Bolivariana de Venezuela y la República de Trinidad y Tobago, para el desarrollo común y el bienestar de nuestros pueblos. https://t.co/CwJ2jpJjEm
The deal calls for construction, operation and maintenance of a 16-inch diameter submarine gas pipeline that will span 15 kilometers from the Dragón field in Venezuela to the Hibiscus field in Trinidad and Tobago.
Companies involved in the pipeline project include: PDVSA, National Gas Company of Trinidad and Tobago (NGC), and Shell Trinidad and Tobago Limited.
Gas from Venezuela will be used in Trinidad and Tobago to feed the twin-island country’s LNG plant and potentially other industries.
However, it’s still unclear what initial production will look like or when the pipeline will be online.
Venezuela’s National Assembly has not approved the gas agreement. However, under Venezuela’s gas laws, no approval is needed to move forward with negotiations such as those signed today.
(MEEI, 24.Aug.2018) — The Ministry of Energy and Energy Industries (MEEI) has been monitoring the impacts of the 6.9 magnitude earthquake which occurred on Tuesday 21st August, 2018 at 5:31 p.m. that reportedly caused some property damage across the country.
Reports from the energy sector companies have, so far, indicated that there have been no visible structural damage to offshore and onshore infrastructure, although assessments are currently ongoing.
Some companies, such has Shell, opted to shut-in offshore facilities to conduct such assessments.
In particular, with respect to Trinmar, some offshore installations have been minimally impacted, the most serious being structural damage to the Block Station Bridge on Platform 4 in the Main Soldado Field. A team of Construction Engineering personnel has since examined the damage with the aim of developing measures to rectify the situation. Plans for corrective measures to restore workmen facilities and other general utilities are also being finalized.
At the Petrotrin Refinery, there have been no reported disruptions, save and except impacts to the loading arm for loading vessels with petroleum products. As such, there is expected to be delays in loading vessels for the time being.
There have been reported impacts to office buildings in Port of Spain such as Albion Plaza, Shell House, NPMC Sea Lots, and Atlantic.
NP has assured that there is an adequate and available supply of fuel at its service stations.
The National Gas Company (NGC) has indicated that there was no damage to its facilities and infrastructure. Atlantic LNG’s facilities and infrastructure at Point Fortin were not affected and continue to produce.
Further, there have been no reported damage to any of the following organisations/facilities:
— Methanol Holdings Trinidad Ltd
— Point Lisas Nitrogen Ltd
— Yara & TRINGEN
— Caribbean Nitrogen Company & N2000
Natural Gas Liquids Facilities
— Phoenix Park Gas Processors Ltd Power Generation
— Trinity Power Ltd
— Trinidad Generation Unlimited
The Ministry is awaiting responses from other stakeholders. As assessments continue the public will be advised on any further developments accordingly.
(CMC, 24.Aug.2018) — Prime Minister Dr Keith Rowley will lead a delegation to Venezuela tomorrow to sign an agreement for the development of the across border gas from the Venezuelan Dragon Gas Field, according to an official statement issued here.
The statement from the Office of the Prime Minister noted that the signing of the terms of the agreement will be between the National Gas Company (NGC), the Venezuelan NGC, Shell, and the Venezuelan state-owned oil and natural gas company, Petróleos de Venezuela, SA (Petroleum of Venezuela).
The agreement was originally scheduled to have been signed here on Wednesday, but the statement said the accord will be signed in caracas on Saturday.
“This was requested and acceded to due to the concerns about the earthquake,” the statement said, in reference to the 7.0 earthquake that rocked both Venezuela, Trinidad and Tobago, and other Caribbean countries on Tuesday evening.
The Dragon Field is located within Venezuela’s maritime territory, just off the north-west coast of Trinidad. It is close to the Hibiscus platform, jointly owned by the Trinidad and Tobago government and Shell.
Shell is also the operator of Dragon. The deal will hopefully see Venezuelan gas from Dragon transported to Hibiscus and then to Point Fortin, where Atlantic will turn it into liquefied natural gas.
“That’s the plan we’ve been working on for the last three months,” Rowley told reporters here in April.
Shell is also the helping the government develop and process gas from Loran-Manatee, which is off the south-east coast of Trinidad, and spans the maritime borders of Venezuela and Trinidad and Tobago.
The Loran-Manatee field has an estimated 10.25-trillion cubic feet of gas of which roughly 74 per cent belongs to Venezuela, with 26 per cent belonging to Trinidad and Tobago.
(Energy Analytics Institute, Aaron Simonsky, 22.Aug.2018) – The well encountered hydrocarbons in Block TTDAA 14.
Trinidad and Tobago’s former Energy Minister Kevin Ramnarine revealed the details in a tweet.
“I am encouraged by the results of the T&T deepwater campaign. Just received the news that BHP’s 4th well (Bongos 2) encountered hydrocarbons in Block TTDAA 14 for which a production-sharing contract was awarded to BHP in 2012,” wrote Ramnarine, who now works as a Strategic Energy Advisor.
(Energy Analytics Institute, Aaron Simonsky, 22.Aug.2018) – Energy infrastructure on the twin-island nation of Trinidad and Tobago appears to be OK after an earthquake yesterday in Venezuela.
The August 21, 2018 earthquake hit the northern coast of Venezuela, and was felt in neighboring Colombia, Trinidad and Tobago and Guyana.
“Buildings stood up. Industrial plants stood up. Energy infrastructure stood up. Most of the electricity supply, internet services, telecoms, water supply were uninterrupted. No lives lost. No serious injuries. Yes, we had some property damage but lots to be grateful for T&T,” wrote Strategic Energy Advisor Kevin Ramnarine, who is also the Former Energy Minster of Trinidad and Tobago, in a twitter post.
(Trinidad and Tobago Newsday, Carla Bridglal, 21.Aug.2018) – After nearly two years of negotiations between this country and Venezuela the deal that will allow TT to process gas from the Dragon gas field is expected to be finalised tomorrow.
A release from the Office of the Prime Minister (OPM) said the agreement on the final terms for the development of the across the border gas from Venezuela’s Dragon gas field will be signed tomorrow by representatives of the National Gas Company, Venezuela’s state oil company, PDVSA, and Shell, the multinational energy giant with the rights to drill the Dragon field.
OPM said A “high-level Venezuelan delegation” will also participate, along with representatives of the TT Government, to witness this “historic event.”
In late June, Stuart Young, then a Minister of State in the Officer of the Prime Minister, said while discussions were almost complete, price was the main sticking point.
In December 2016, Prime Minister Dr Keith Rowley had visited Venezuela, and along with that country’s President, Nicolas Maduro, signed an agreement that put the plan in motion for TT to process Dragon’s gas.
First gas then was estimated by 2020; that timeline is still on track. Young had given reporters a timeline of 18 months to two years to get first gas here—providing the deal is signed soon.
A special purpose vehicle between multinational energy giant Shell and the National Gas Company (NGC) has been created to lay down the infrastructure; Shell’s pipelines, including those in the North Coast Marine Acreage will be used to transport Dragon’s gas to the Hibiscus platform off the north-west coast of Trinidad and only 18 kilometres away from the gas field.
Hibiscus is jointly owned by the TT government and Shell. The first tranche of Dragon’s production will yield about 150 million standard cubic feet of gas per day (mmscfd), or 26,505 barrel of oil equivalent per day (boed). For comparison,
Petrotrin produces 43,000 barrels of oil per day and 130 mmscfd; bpTT’s Juniper well, which came on stream in the latter half of 2017, produces about 590 mmscfd.
The Dragon field is part of the Mariscal Sucre natural gas complex off the Caribbean coast of Venezuela, north west of Trinidad. That Dragon is just one of the fields in a total acreage reserve of 14.7 trillion cubic feet of gas. Dragon alone contains 2.4 tcf.
(Stabroek News, 21.Aug.2018) – A powerful earthquake has hit the northern coast of Venezuela with a magnitude of 7.3, according to the U.S. Geological Survey. It had been originally reported as a 6.8 event but this has since been upgraded to 7.3.
Reuters reported that the quake, which was centred near the town of Guiria, was felt as far away as the capital, Caracas, where it shook buildings, witnesses said.
According to Reuters, the U.S. Pacific Tsunami Center said the quake, which was fairly deep, could cause small tsunami waves along the coast near the epicenter, 23 miles (37 km) southwest of the town of Carupano.
A magnitude 7.3 quake is considered major and is capable of causing widespread, heavy damage, but the quake was 76.5 miles (123.11 km) deep, which would have dampened the shaking.
The Trinidad Express this afternoon said that reports are beginning to come in of widespread damage and destruction on the twin-island republic
Buildings have sustained structural damage, cars have been flattened by falling concrete and supermarkets are reporting losses, the Express said.
There is also significant loss of telecommunication being reported, the newspaper report added.
Strong tremors were felt in Georgetown and surrounding areas around around 5.30 this afternoon.
Guyanese have begun reporting their experiences with the tremor. There are reports that it was felt severely in the northwest of Guyana which is much closer to the epicentre of the earthquake.
East Bank Demerara residents reported feeling the walls of their homes moving as well as trees and power lines swaying.
In Georgetown, some buildings shook and residents streamed into the streets but there have been no immediate reports of any damage.
Head of the Civil Defence Commission, Kester Craig said on his Facebook page that there is no Tsunami Warning for Guyana at the moment. The Hydrometeorological Service is monitoring and would provide the necessary updates, he said.
“I feel like I’m about to faint. I’m shaking. It was long,” said telemarketing worker Sheny Fuentes, 22, speaking outside her work building in eastern Caracas told Reuters. “I’m relieved that it doesn’t seem like damage was that bad. We would have been even more affected (given Venezuela’s economic crisis) – there are already people eating from the garbage and buildings aren’t well made,” she told Reuters.
(Energy Analytics Institute, Aaron Simonsky, 20.Aug.2018) – Payments by major oil and gas companies to the government of the twin-island nation of Trinidad and Tobago totaled $114.7 billion during 2010-2016.
That’s according to figures posted by Strategic Energy Advisor Kevin Ramnarine, who is also the Former Energy Minster of Trinidad and Tobago.
Ramnarine provided the data in a post on LinkedIn.
The payment amounts by major companies to the Trinidad and Tobago government by company follow:
(Energy Analytics Institute, Piero Stewart, 15.Aug.2018) – If all goes off as planned, by 2025, Guyana will be the 5th largest oil producer in the Latin American and Caribbean region.
That’s according to an analysis of data posted by Trading Economics, and extrapolation of estimates of Guyana’s future oil production, as announced by Kevin Ramnarine, the former Energy Minister of Trinidad and Tobago.
Considering initial production of 120,000 barrels per day in 2020, Guyana will first occupy the spot as the 7th largest oil producer in the LAC region, assuming no drastic changes in the other countries’ production profiles over the next couple of years.
However, in the process, by the time peak production is reached five years latter, Guyana will have surpassed OPEC producer Ecuador, assuming production in that country, as well as others, doesn’t experience a drastic decline, as has been the case in Venezuela in recent years.
(Trinidad Express, Anthony Wilson, 15.Aug.2018) – Upstream energy companies operating in T&T paid $123.5 billion to the Government between 2010 and 2016, according to data compiled by the Trinidad and Tobago Extractive Industries Transparency Initiative (TTEITI).
The organisation provided the information in a written response to the Express Business editorial of August 1, headlined “Who controls T&T’s wealth?” In that commentary, the publication’s editor, Anthony Wilson, questioned whether the TTEITI could validate the sharing of the economic rents by BPTT as outlined by the BP’s new regional president in T&T, Claire Fitzpatrick.
(Trinidad and Tobago Newsday, Yvonne Webb, 10.Aug.2018) – State-owned oil company Petrotrin said a message circulating on social media that the company is on strike is not true.
The message which started circulating on WhatsApp and Facebook, from Tuesday evening, stated that Petrotrin is on strike and workers are blocking gas tankers, from leaving the Petrotrin compound.
The messenger advised drivers to fill their gas tanks soon as possible. Petrotrin said the message has no truth and may be meant to panic the public. Officials said they did not know from where the mischief originated or why. Petrotrin speculated it could have been misconstrued after a meeting of the representing Oilfield Workers Trade Union (OWTU) meeting with workers outside the Pointe-a-Pierre compound on Monday evening.
At the meeting, OWTU’s president Ancel Roget told a large gathering of oil workers that their jobs were on the line. He told them they will be heading to the Prime Minister’s official residence at La Fantasie, St Ann’s on August 26, “to pray and parang.”
The union as part of the Joint Trade Union Movement, is also gearing up for a day of rest and reflection on September 7, the third anniversary of the People’s National Movement victory at the polls, to demonstrate its disappoint ment with the present administration.
Education and research officer Ozzi Warwick said the turnout on Tuesday was large and agreed this could have caused a misunderstanding of what was going on with the oil workers.
However, he confirmed, “workers are not on strike. The union has not served any strike notice to Petrotrin. The union is not aware of any worker blocking any tanker from leaving the compound. This is not true.”
(Trinidad Express, Aleem Khan, 7.Aug.2018) – More hints that major discovery on the horizon.
Offshore Trinidad was one of two sites in the world where oil and gas service provider Rowan Companies plc debuted its ultra-harsh environment jack-up rigs, New York Stock Exchange (NYSE) investors heard last week. The other site was in the North Sea, offshore continental Europe.
Rowan president and chief executive officer (CEO) Tom Burke said: “While overall market conditions for offshore drilling remain challenging, demand for rigs has improved year to date. Since the beginning of the second quarter 2018, Rowan has been awarded contracts for both drillships and jack-up rigs.
(Trinidad and Tobago Newsday, Jada Loutoo, 5.Aug.2018) – Some 25 students from across the south-eastern community of Mayaro are set to benefit from a revolutionary new developmental programme sponsored by energy company BP Trinidad and Tobago.
Entitiled “Life-Skills, Entrepreneurship and Problem-Solving (LEAP)”, the two-week programme was launched at the Mayaro Resource Centre on Thursday. Developed by Mayaro-based Business Clinic, it focuses on students between the ages of 12 and 16 and has engaged local non-governmental organisations such as Global Villages, as well as consulted with various community leaders, educators, parents and other stakeholders to ensure success and tangible benefits to the students.
Ronda Francis, Corporate Responsibility Manager, BPTT, gave an overview of the initiative: “BPTT has always been progressive in terms of supporting youth-based development initiatives. This programme is revolutionary and does not fit the mould of the usual ‘vacation camp’. LEAP is seeking to empower young people with entrepreneurial skills, within the direct context of understanding and embracing their roles as future community leaders. At the end of this workshop, we hope to have a cadre of creative problem solvers who embrace leadership roles that encompass the development of Mayaro and the nation as a whole.”
Featured activities in the LEAP workshop will include vision setting, conflict resolution techniques and group discussions on viable and emerging business ideas. The participants will also be engaged in field trips that will encourage them to assess their spaces and communities in order to increase their awareness, expand their ability to deal with dynamic situations and build positive leadership qualities.
As Sherese Chee Mook, one of the LEAP-leaders, explained, “Through practical workshops, creative learning activities, field trips and other activities, we intend to sharpen the participants’ self-awareness. This will serve to connect them with opportunities to assess their natural and physical environment, problem solve and think beyond conventional solutions. LEAP goes to a level where we as a community are becoming masters of our own destiny, and as such, we are empowering our young leaders to take us to a better future.”
The launch was well attended by parents, teachers, local entrepreneurs, and other community stakeholders, including Member of Parliament for Mayaro, Rushton Paray, who pledged his full support for the initiative.
“Let me first recognise the role of BPTT in terms of investing in and supporting initiatives that build up and hold our community together. This is yet another example of their vision for a better Mayaro and it’s good to see so many young people leading this initiative and taking ownership of the future. The perspective of taking the problems affecting our communities and applying entrepreneurial solutions is innovative and worthy of support. If there is anything that I can assist with, I am willing to be a part of this programme that will see Mayaro ‘LEAP’ ahead,” Paray explained.
In recognition of individualism, LEAP was designed to accommodate multiple learning styles to encourage participants’ understanding and maintain their engagement. Following the official launch which served to sensitise parents and other stakeholders about the purpose and structure of the programme, there were smaller one-on-one sessions with the LEAP team that facilitated direct answers and clarification on the initiative.
Lisa Mahabir, mother of 13-year old Guayaguayare Secondary School student, Emily, was enthusiastic about the programme, “This is an excellent initiative and in fact, after today I want to volunteer and help in any way that I can. This is focused on taking charge and heping young people to see and approach things differently so that they can create new opportunities to help build a new Mayaro and a stronger Trinidad and Tobago.”
Emily was also very keen about the opportunity, “My mom always supports me in anything that I want to do to be a better student and a better person overall and that’s why we are here today. I have always dreamt of being a chef and I think that LEAP will give me more ideas on how I can achieve this dream, while also making Mayaro a better place for everyone. I really can’t wait to be a part of this wonderful learning experience and I want to be a role model and leader who makes the world a better place.”
(BPTT, 2.Aug.2018) – BP Trinidad and Tobago announced its Angelin platform has arrived in T&T.
Angelin, which will be BPTT’s 15th offshore platform, was fabricated in Altamira, Mexico. The topside and jacket sailed from Altamira on June 30. Over the next few weeks they will be installed off the south east coast of Trinidad.
The Angelin facility will be located 60 kilometres off the south east coast of Trinidad in water-depth of approximately 65 metres. Angelin was originally discovered by the El Diablo well in 1995 and appraised by La Novia in 2006. The development will include four wells and will have a production capacity of approximately 600 million standard cubic feet a day (mmscfd). Gas from Angelin will flow to the Serrette platform via a new 21-kilometre pipeline.
First gas is expected in the first quarter of 2019.
BPTT Regional President Claire Fitzpatrick said: “Angelin is part of BPTT’s long-term plan to develop its resources in the Columbus Basin and the development underscores BPTT’s commitment to Trinidad and Tobago. The safe arrival of the jacket and topsides is an important milestone and we are now focusing on the next stages of the project as we progress towards first gas in 2019.”
Trinidad and Tobago nationals were involved in the construction of Angelin and BPTT has also sought to share lessons learned during construction of the platform. As part of this effort, the company facilitated a visit to the Altamira fabrication yard by representatives from the Government and private sector.
The Angelin facility will be a Normally Unmanned Installation (NUI)
Angelin was originally discovered by the El Diablo well in 1995 and appraised by La Novia in 2006.
Gas from Angelin will flow to the Serrette platform via a new 21-kilometre pipeline.
(Energy Analytics Institute, Ian Silverman, 31.Jul.2018) – That’s according to reports in a local newspaper.
“The refinery at PetroTrin has a capacity of 140,000 barrels of oil per day (bopd); the company produces about 42,000 bopd – a shortfall of about 100,000 bopd, which must then be imported,” reported the daily newspaper Trinidad and Tobago Newsday.
(The Sterling Report, Yanique Leiba-Ebanks, 29.Jul.2018) – Petroleum Company of Trinidad and Tobago Ltd (affectionately known as Petrotrin) is the state-owned oil company in Trinidad and Tobago. Its crude oilfields are located across the south-western peninsula of Trinidad, off the east coast of Trinidad, and in Point Fortin. The country’s economy primarily emphasises oil and petrochemicals, with oil contributing 40 per cent of GDP.
This is what contributed to Trinidad’s enormous wealth as measured by its Net International Reserves which stand at 9.4 months of imports (Dec. 2017) vs. 19.8 weeks for Jamaica (June 2018).
This also led to the country having “A” rated debt as compared to single “B” for Jamaica.
All this changed when oil prices started to decline and their debt was downgraded to BBB+ which is still investment grade, but after further deterioration of the economy, S&P moved its outlook to negative in April.
WHY DO WE CARE ABOUT PETROTRIN?
Petrotrin issued a US$850-million bond that matures in August 2019. While the company has issued other bonds, this was the most attractive to investors. The bond is/was one of the most popular bonds in the market.
The reasons were simple: firstly, everyone in Jamaica was familiar with Trinidad, secondly, the bond has a very short maturity — it matures in 2019, and thirdly, the coupon rate is fixed at 9.75 per cent.
In many ways it was a no-brainer, and given the importance of oil to Trinidad, it was assumed that it was implicitly guaranteed by the Government.
SO WHAT WENT WRONG?
Investors became jittery when the financials showed that the company recorded a massive loss of TT$2.2 billion in 2017. According to a Moody’s report, the cash flow (as at September 2017) was woefully inadequate for repaying the debt maturing in 2019.
The updated figure shown in the financials as at June 2018 shows approximately US$200 million of cash against total debt of US$1.728 billion and a current ratio that is much less than one.
Furthermore, it was announced that Petrotrin was going to split operations and reorganise in February 2018. This was against the backdrop of a deteriorating economy in Trinidad where real GDP growth contracted by 6.0 per cent in 2016 and 2.6 per cent in 2017.
Real GDP growth (Annual percent change) 2014 2015 2016 2017 2018
Trinidad and Tobago -0.3% 1.5% -6.0% -2.6% 0.2%
Petrotrin has recorded an after-tax profit of TT$85.6 million for the quarter ended June 30, 2018. This compared to a loss of TT$517.5 million in the previous quarter.
Petrotrin was given the green light to terminate contract with A&V Oil amidst a scandal where the company paid $100 million to A&V Drilling, for oil which was not supplied. In addition, findings showed that the reservoir was incapable of producing the volumes in question.
IMF stated that oil output is improving due to exploration and refinery upgrades by Petrotrin. It added that Trinidad & Tobago’s growth may be flat or somewhat negative this year but the economy “may be starting to turn a corner as a result of a projected recovery” in the energy sector.
Local and global banks are already in talks with Petrotrin about restructuring the bonds and general liability management.
As a result investors are concerned about the refinancing options available to Petrotrin, especially in light of a recent announcement that the Government will not be guaranteeing any new debt and low cash flows. However, as listed under the latest developments, talks are underway regarding the restructuring of the bonds.
In addition, Petrotrin is a significant contributor to Trinidad and Tobago’s GDP and as such, it would be financial suicide to let it fail, but if you hold this bond, keep a track of the developments and act accordingly.
Yanique Leiba-Ebanks, CFA, FRM is the AVP, Pensions & Portfolio Investments at Sterling Asset Management. Sterling provides financial advice and instruments in U.S. dollars and other hard currencies to the corporate, individual and institutional investor. Visit our website at www.sterling.com.jm Feedback: If you wish to have Sterling address your investment questions in upcoming articles, e-mail us at: firstname.lastname@example.org
(Trinidad and Tobago Newsday, Carla Bridglal, 26.Jul.2018) – The board of Petrotrin has outlined a plan to reorganise and restructure the state oil company in a bid to make it more competitive and become a viable asset to the people of Trinidad and Tobago. The unions, including the most vocal majority Oilfield Workers’ Trade Union (OWTU) agree that this is the best strategy to move the company into a sustainable future. Yet nearly four months after the board started the restructuring process, and three months after both parties signed a memorandum of agreement that this is the path they must take, together, the process has reached a stalemate. It’s a strange stasis — both parties agree on the fundamental challenges and solutions, but neither is willing to concede to the other in an effort to get the ball rolling on a mutually beneficial outcome.
The union believes the board is reneging on its promise to meet with them. The board insists that the union has not adequately put forward a plan to discuss. The union insists it wants the company divided into four subsets, each with a division head to oversee operations — land exploration, marine exploration, refining and marketing, and the hospital. The board has already split the company into two — upstream (exploration and production) and downstream (refining and marketing). And as far as they are concerned, the union is squabbling over superficial nomenclature. The union, for its part, believes the board lacks the proper expertise to run an oil company.
The board still appears to be going ahead with its 18-month turnaround plan, but if it is to make any material changes to things like staffing, for example, it will need union buy-in.
And while it doesn’t seem like the Board and the union have made any inroads recently, at least for a formal meeting, there was a clash of the titans of sorts, when chairman of Petrotrin, Wilfred Espinet, and OWTU president general Ancel Roget agreed to sit on a panel moderated by journalist and director of the Lloyd Best Institute, Sunity Maharaj last Wednesday, in front of a packed auditorium, filled mostly with a boisterous union crowd, at the Government Campus Plaza Auditorium in Port of Spain.
“Let me make it abundantly clear what they (the unions) are trying to do is make noise of things that are not really important. The important thing is to make the company viable. It has to be competitive and to do that it has to focus on operations as a clear part of the strategy,” Espinet said.
It’s the Board’s mandate to restructure the company so it can become profitable and sustainable, he said. Petrotrin needs to operate like an international company, and think beyond TT oil, he said. Oil is a commodity and to be able to keep operating, the company needs to be able to sell that oil.
The refinery at Petrotrin has a capacity of 140,000 barrels of oil per day (bopd); the company produces about 42,000 bopd — a shortfall of about 100,000 bopd, which must then be imported.
The OWTU agrees. In fact, one of Roget’s major points was that the company needed to be more efficient in hiring skilled personnel to operate and manage the company’s exploration and production activities. There are some sectors, like human resources that are overstaffed, he said, while several technical sections, like marine have several vacancies; the refinery alone has over 100 vacancies for operators, he said. If wages are a significant part of the company’s expenses, it’s only because the shortage of experienced staff meant people had to pull double and even triple shifts.
“We have an overburdened top management structure; the structure we have proposed does not carry all of that ‘fat’ of management because it is not necessary. What is necessary is a management that is focused and accountable,” Roget said.
Time is of the essence, he said, especially if the company is to take advantage of rising commodity prices, and the OWTU wants to begin a process that will move the company forward, with competent management void of politics.
Both men stubbornly stuck to their message, and sometimes tiresome rhetoric. Espinet reiterated the mandate of the Board to go ahead with the reorder regardless, and Roget made veiled threats of “taking a particular course of action to force them to do what they need to do.”
Yet despite the similarities of their arguments, both parties still can’t seem to agree, much to the bemusement of observers like the third panelist, energy consultant Anthony Paul.
“It’s remarkable to me how much convergence I’m hearing and yet we are focusing on the divergence,” Paul said. So while the OWTU and the Board could both agree that governance structures and efficiency in production need to be improved, the one thing that seems to be missing from the equation is a shift in culture. “We know the challenges of getting the right people and competencies; putting in place systems of governance and management for operations. There may be disagreement with numbers and those are easy to fix. But there’s an elephant in the room that is not being addressed yet and I’ll put it out there. It’s about culture. An organisation needs a culture to guide the way they behave and their ethics,” he said, adding that both parties needed to listen to and learn from each other. Petrotrin was facing a precipice, he said, and neither party would fare well if the company went over and for that not to happen, things need to change.
(Trinidad and Tobago Newsday, Carla Bridglal, 26.Jul.2018) – Atlantic CEO Dr Philip Mshelbila and BP’s vice president Group Process Safety Central Rob DiValerio have highlighted the central role of employees in the systems that protect natural gas plants from leaks and other failures.
The two headlined the recently concluded seventh annual Process Safety Week, hosted by LNG production company, Atlantic, for its employees and service providers at its Point Fortin liquefaction facility.
Process Safety is a framework used by LNG facilities and process plant operations to manage the systems that prevent leaks, spills, equipment malfunction, extreme temperatures, corrosion and metal fatigue, which all have the potential to cause hazardous incidents. In the industry, incidents related to these systems are described as process safety incidents.
At the launch of the event Dr Mshelbila and DiValerio shared some of their personal experiences in managing the tragic outcomes of Process Safety incidents in Nigeria and USA respectively.
“One of the biggest dangers to process safety is complacency due to familiarity,” Dr Mshelbila said. “We cannot rely on luck to be our barrier. We have to live Process Safety if we are going to manage it as the way in which we operate. It cannot be something we switch on and off. Our key objective is that we perform at our best and recognise the accountability and responsibility for process safety that comes with each of our roles. Every person has to participate – teamwork is the only way to succeed.”
DiValerio highlighted the importance of barrier management, the practice of continuously evaluating and enhancing the systems that protect natural gas plants from leaks.
“Incidents should not be seen as an interruption but as an opportunity to learn,” DiValerio said. “The key factor in ensuring Process Safety performance is simply identifying the barriers used to mitigate the routes of loss of containment (of hazardous materials) and understanding how robust they are.”
Established in 2012, Atlantic’s Process Safety Week features lectures, presentations and booth displays, all aimed at deepening employee and service provider knowledge of process safety at Atlantic and in the wider industry. This year’s theme was Enhancing Process Safety Performance. Over three days, 27 sessions were held, featuring presenters representing Atlantic, Shell, BP, NGC, Worley Parsons, Massy Wood Group and Lloyd’s Register. Sessions were also held for night shift personnel, as part of Atlantic’s commitment to expose all employees to industry best practices in Process Safety.
(BPTT, 25.Jul.2018) – BP Trinidad and Tobago’s long-term plan could potentially see the company investing as much as $8 billion dollars in T&T, in 9 new developments in the next 10 years.
This was announced by Claire Fitzpatrick, new BPTT president at a media event held at BPTT’s corporate offices on Wednesday July 25. She added that bringing the plans to fruition however will require T&T to remain competitive within the BP Global portfolio in order to achieve final successful decisions on investments.
Noting that there remain decades of demand for gas and that this makes BPTT increasingly important to BP, Fitzpatrick did not shy away from the fact that the company was not immune to change. “Our industry is in rapid change globally and to remain competitive and successful in this environment means that we must change and continue to evolve to keep our operations here attractive to further investment. Fitzpatrick explained that the purpose of the media showcase was to share the many innovative plans in train to continue to find and recover energy resources more safely and efficiently. Staff at the event highlighted ways that the company was using modern technology to boost safety and improve efficiency and in some of these cases BP’s Trinidad operations were piloting these new technologies on behalf of the Group.
Fitzpatrick pointed out that while technology may bring more certainty to hydrocarbon resources below the surface, above the surface there is still important work to be concluded with Government and industry stakeholders to keep Trinidad competitive in a rapidly changing world, “Empowering skilled local staff with technology works best when above the ground factors also reflect the dynamism of a new, competitive industry and world.”
Some of that certainty will come post the completion of negotiations with the Government and Atlantic shareholders on Atlantic Train 1. Though the current negotiations with the Government on Train 1 are ongoing, Fitzpatrick shared that the Government and BPTT are dedicated to ensuring that country and company benefit from BPTT’s operations.
Fitzpatrick also confirmed that Angelin, BPTT’s, 15th offshore platform will soon arrive in Trinidad and pre-installation checks will be conducted off the West coast before installation in the coming weeks. First gas from Angelin is planned for the first quarter of 2019.
“We look forward to the safe start-up of Angelin in the coming months and this continues to build on our track record of project start-ups following TROC and Juniper in 2017,” said Fitzpatrick. She thanked staff, stakeholders and local contractors for their support in building BPTT’s track record of success. “It is an honour for me to lead BP Trinidad and Tobago. We have a history of safe operations and success at BPTT and we plan to continue to build on this legacy.”
(Energy Analytics Institute, Jared Yamin, 23.Jul.2018) – It’s said a picture paints a thousand words. This one paints 8.9 billion.
From 1908 to 2017, Trinidad and Tobago (T&T) has produced 8.9 billion barrels of oil equivalent (boe), announced Strategic Advisor Kevin Ramnarine in a post on LinkedIn. “Most of that production (58.6%) is natural gas. Of all the natural gas ever produced by T&T, 71% has been produced in the first 17 years of the 21st century,” wrote Ramnarine, the former Energy Minister of Trinidad and Tobago.
(Trinidad Guardian, 21.Jul.2018) – Atlantic CEO Dr Philip Mshelbila and Rob DiValerio, BP’s Vice President—Group Process Safety Central, have highlighted the central role of employees in the systems that protect natural gas plants from leaks and other failures.
Process Safety is a framework used by LNG facilities and process plant operations to manage the systems that prevent leaks, spills, equipment malfunction, extreme temperatures, corrosion and metal fatigue, which all have the potential to cause hazardous incidents. In the industry, incidents related to these systems are described as Process Safety incidents. At the Process Safety Week launch event, Dr Mshelbila and DiValerio shared some of their personal experiences in managing the tragic outcomes of Process Safety incidents in Nigeria and USA respectively.
“One of the biggest dangers to Process Safety is complacency due to familiarity,” Dr Mshelbila said. “We cannot rely on luck to be our barrier. We have to live Process Safety if we are going to manage it as the way in which we operate. It cannot be something we switch on and off. Our key objective is that we perform at our best and recognise the accountability and responsibility for Process Safety that comes with each of our roles. Every person has to participate—teamwork is the only way to succeed.”
Echoing the Atlantic CEO, keynote speaker Rob DiValerio additionally highlighted the importance of barrier management —the practice of continuously evaluating and enhancing the systems that protect natural gas plants from leaks.
“Incidents should not be seen as an interruption but as an opportunity to learn,” DiValerio said. “The key factor in ensuring Process Safety performance is simply identifying the barriers used to mitigate the routes of Loss of Containment (of hazardous materials) and understanding how robust they are.”
Established in 2012, Atlantic’s Process Safety Week features lectures, presentations and booth displays, all aimed at deepening employee and service provider knowledge of Process Safety at Atlantic and in the wider industry.
This year’s theme was Enhancing Process Safety Performance. Over three days, 27 sessions were held, featuring presenters representing Atlantic, Shell, BP, NGC, Worley Parsons, Massy Wood Group and Lloyd’s Register. Sessions were also held for night shift personnel, as part of Atlantic’s commitment to expose all employees to industry best practices in Process Safety.
(The New York Times, Clifford Krauss, 20.Jul.2018) – Guyana is a vast, watery wilderness with only three paved highways. There are a few dirt roads between villages that sit on stilts along rivers snaking through the rain forest. Children go to school in dugout canoes, and play naked in the muggy heat.
Hugging the coast are musty clapboard towns like Georgetown, the capital, which seems forgotten by time, honeycombed with canals first built by Dutch settlers and African slaves. The power grid is so unreliable that blackouts are a regular plague in the cities, while in much of the countryside there is no electricity at all.
In the last three years, ExxonMobil has drilled eight gushing discovery wells offshore. With the potential to generate nearly $20 billion in oil revenue annually by the end of the next decade, roughly equivalent to the revenues of the much-larger Colombia, there could be enough bounty to lift the lives of almost every Guyanese.
If all goes well, one of the poorest countries in South America could become one of the wealthiest. Suddenly the talk of Georgetown is a proposed sovereign wealth fund to manage all the money, as if this were a Persian Gulf sheikhdom.
But there are obstacles. If history is any guide, countries that discover oil often waste their opportunity, as the resource blends seamlessly with corruption. Countries with weak political institutions like Guyana are especially vulnerable.
“You have an alignment of money and power in the hands of the state, so the party in power controls the resources,” said Floyd Haynes, a Guyanese-born finance professor who is a consultant to Business Ministry. “And the money is usually squandered, misapplied or downright stolen.’’
Senior government officials here have little experience regulating a big oil industry or negotiating with international companies. The civil service is corrupt, and the private sector is slow to innovate, businessmen and aides to senior officials acknowledge.
Still, there is cautious optimism. “We see this oil discovery as almost like providence,” said Raphael Trotman, the natural resources minister. “We’ve been given a second chance to get things right.”
The first chance was independence from Britain in 1966, and that chance was blown. A plague of ethnic tribal politics has produced a fragile state with an economy propelled by drug trafficking, money-laundering, and gold and diamond smuggling. A vast majority of college-educated youths emigrate to the United States or Canada, while those who stay behind experience high rates of H.I.V. infection, crime and suicide.
Can oil wealth help Guyana overcome its history, or will the windfall that will flood government coffers merely turn the page to a new tragic chapter?
“The challenges are enormous and shouldn’t be underestimated,” said Lars Mangal, president of Totaltec Oilfield Services, a Guyanese company seeking to train local workers in safety and basic oil operations. “We have to overcome nepotism, entitlements, corruption, cynicism and skepticism.”
The Guyanese government, under its agreement with Exxon, will receive roughly half the cash flow from oil production once the company’s costs are repaid. Economists say that will mean the country’s current gross domestic product of $3.6 billion will at least triple in five years.
But with exploration out of sight 120 miles offshore, and no refinery planned, the economic benefits for the population have been limited so far, making some cynical. Only about 600 Guyanese have found direct employment on the drill rigs, shore bases and offices, and that number may increase only to about 1,000, oil executives say.
“When we have big projects, we hire foreign companies who bring their own workers,” said Khemraj Dhaneshrie, a young chemist at the Leonora estate sugar mill.
Mr. Dhaneshrie is typically skeptical about his government’s ability to oversee foreign operations after Guyana’s long experience of opportunistic Chinese investment. He noted that the Chinese financed and built an enormous factory in 2009 to rescue the sugar industry, but it turned out to be a $181 million boondoggle.
“The Chinese cut down our forest, dug out our gold, and we never got a cent,” he said. “We could end up with the same experience with ExxonMobil.’’
In the Past, Wasted Opportunities
Colorful Hindi monuments tower over Guyana’s rice fields, a reminder of the cultural distance between the country and its Latin American neighbors. It is English speaking because of the legacy of British rule, and its two biggest ethnic groups are Afro-Guyanese and Indo-Guyanese — the descendants of slaves from Africa and of indentured servants brought from the Indian subcontinent in the 19th century.
Until now, the country had never produced oil, and traditionally it has traded its rice crop for fuel from Venezuela. Now it is attracting experienced Texas oilmen like Doug McGehee, Exxon’s Guyana operations manager.
Over the last 37 years working for ExxonMobil, Mr. McGehee has taken his black cowboy boots, silver belt buckle and Texas A&M class ring into the oil fields of Angola, Kazakhstan and Equatorial Guinea. In all those places, oil wealth has risen to the top, only to leave the poor behind. Last year, for example, a Paris criminal court convicted the vice president of Equatorial Guinea of money-laundering and embezzling more than $100 million.
But as Mr. McGehee monitored operations aboard the Noble Bob Douglas drill ship on a recent day, he insisted that Guyana could be different.
“The math is right here,” he said, noting that the country has a tiny population — below 800,000 — to share all the new wealth. Guyana’s government stands to take in more than $6 billion in royalties and taxes annually by the end of the 2020s, according to the Norwegian consultancy Rystad Energy.
“If the government manages the resource right, every Guyanese should benefit with better schools, better health facilities, better roads,” Mr. McGehee said.
That is no small “if.”
Guyanese need look no further than neighboring Venezuela to see a failed state where the world’s largest oil reserves have not prevented hunger, shortages of medicine and hyperinflation from producing widespread misery. Nearby Trinidad and Tobago offers another example of how countries dependent on oil can neglect traditional industries and then suffer severe economic shocks when crude and natural gas prices fall.
Others warn of the “Dutch disease,” a phenomenon so labeled in the 1970s after a natural gas boom sapped the strength of manufacturing in the Netherlands. Nations that contract the disease from a sudden influx of mineral money typically suffer a surge of inflation, while labor from farming and other traditional professions is drawn to the higher-paying oil sector. Thus, wealth becomes more concentrated.
There are some examples of countries effectively using oil to reduce poverty. Malaysia, with large offshore oil production, has kept its economy diversified and growing. In the Middle East, Oman is a model for using oil and gas wealth to modernize its economy.
But dispiriting examples of wasted opportunity abound.
“We’re all concerned about the negatives,” Prime Minister Moses V. Nagamootoo said.
Dawn Chung Layne, who operates a sewing business out of her mother-in-law’s concrete house in Georgetown, is also anxious. She is attending workshops at the Center for Local Business Development, a program financed by Exxon, to learn ways she can benefit from the oil economy. She hopes to make curtains and linen for cafeterias on the oil ships, and uniforms for sports teams established by foreign companies and their families.
But she also sees risks in these new ventures. More affluent Guyanese may turn away from the sports uniforms she already makes to buy name brands like Nike and Adidas, she said, and she is concerned that food prices will rise.
“Check out the Trinidad economy,” she said. “They thought oil was the best thing since sliced bread, and they spent Sunday to Sunday. They stopped producing and imported everything with oil money. It could happen here.”
‘This Could Be Game Changing’
Before the recent breakthrough, various oil companies had drilled more than 40 wells off Guyana and neighboring Suriname since the 1960s. All were dry holes or otherwise not economically promising. But as oil prices rose a few years ago, Exxon and Royal Dutch Shell decided to take another look. (Shell eventually dropped out of the partnership.)
Exxon’s top geoscientist on the scene was Kerry Moreland, an Oklahoman whose family has been in oil for three generations. Ms. Moreland toyed with becoming a professional bowler and had interned as a tornado chaser for a Tulsa television station before going to work for Exxon and traveling the world in search of new fields. She pinpointed on the map where the first deepwater well, named Liza-1, should be drilled.
Recalling the day three years ago when she decided to duck out of some business meetings in Georgetown to visit the drilling platform, she said there was no more than a 20 percent chance that a meaningful amount of oil would burst out from three miles below the ocean bottom.
As luck would have it, just as her helicopter landed on the platform, the drill bit penetrated the oil reservoir. She went to the control room as the first data from the wells showed promising signs of hydrocarbons. When rock fragments came to the surface a few hours later, they were dripping with oil.
“At that moment, it was ‘Oh, my God, we’ve made a discovery,’” Ms. Moreland said. “You have to pinch yourself and ask, ‘Is this really happening?’ And it hit right then, this could be game changing for the country, one of the poorest countries in the Western Hemisphere. It was a dream come true for any geologist.’’
Exxon is known in the industry as a slow-moving, stodgy company, but Ms. Moreland’s enthusiasm caught fire through the executive wing in the Texas headquarters known as the God Pod. Within three months, the company sent two vessels to conduct the largest three-dimensional seismic test that Exxon had ever undertaken, over 6,500 square miles, in search of more oil.
There’s a lot at stake for Exxon in Guyana.
In recent years, its stock price has slumped because of disappointing production and depleting reserves. The company invested heavily in Canadian oil sands and in natural gas when prices were high, bets that have not worked out as well as expected. While the company was forced to write off large assets in Canada, Western sanctions on Russia foiled its plans to drill in the Russian Arctic.
Darren Woods, the company’s chief executive, has a plan to reverse company fortunes, and Guyana is a big part of it.
Leading a consortium that includes Hess and the China National Offshore Oil Corporation, Exxon is making an effort here that is nothing if not ambitious. Within three years of its big first discovery, it has begun drilling the first of 17 wells that will start yielding oil in 2020, with a floating production, storage and offloading vessel able to handle 120,000 barrels a day. And that is just the first phase.
Another floating vessel, with a capacity of 220,000 barrels a day, is planned, and a third vessel is being considered. In all, 500,000 barrels a day could be produced by sometime in the next decade — the equivalent of Ecuador’s national output. (Repsol of Spain, Tullow Oil of Britain and other companies are exploring, too.)
“It’s a growth area for us,” said Mr. McGehee, the Exxon operations manager. “We keep finding oil.”
That produces nothing but excitement for the 60 Guyanese workers on the Noble Bob Douglas drill ship, who have typically seen their incomes soar.
Gorshum Inniss, a 25-year-old roustabout with an easy smile and flashing dark eyes, is working on a crane crew lifting casing pipe for new wells, doubling what he earned working on a tugboat. He said he now had enough money to visit his parents and younger brother in New York and planned to build a house for him and his daughter.
“I’m proud to be one of the pioneers in this big moment for Guyana,” he said. “I see Guyana as the new Middle East.”
An Endangered Beach?
Not far from the turbulent Venezuelan border, there is a quiet stretch of coastline, pounded by surf, known as Shell Beach because its sand is made of tiny crushed seashells that make it feel like sawdust. Several endangered species of turtles come to nest at night. Once hunted for food, they are jealously guarded from poachers by residents who make a living fishing and selling coconuts.
Audley James, a former turtle hunter who makes necklaces out of beads and coconut shells, remembers when Trinidadian environmental consultants representing Repsol came six years ago to give two days of spill-response training.
The Trinidadians taught the residents how to lay temporary floating barriers to protect the beach from an oil spill, and gave them training certificates that look like diplomas. But there has been no further training that might prepare them for what is now a much less theoretical hazard.
“Plenty of us don’t understand what is going on,” Mr. James said.
Environmentalists are worried that oil will forestall development of renewable energy and that the government and oil companies are not fully prepared to prevent a possible spill.
“It’s two years before first oil, and we don’t have a national oil spill contingency plan,” said Annette Arjoon-Martins, president of the Guyana Marine Conservation Society. “We have our hands in the mouth of a jaguar.”
Ms. Arjoon-Martins said the government’s agreement with Exxon did not specify in enough detail the company’s responsibilities in case of a spill. Government officials disagreed, saying the country’s laws would hold the company fully liable.
Exxon executives say the company is doing everything possible to minimize the dangers of a spill disaster. The company has skimmers and oil booms on hand to collect errant oil, and it has applied to the government to use chemical dispersants in an emergency to break up any spilled oil. They say Guyana is close enough to the Gulf of Mexico to bring in plenty of help in an emergency.
The company has agreed to map the coastal mangroves and study the area’s fish, bird and turtle migration routes to set priorities in case a cleanup is ever needed, executives said. And in another potential environmental benefit, the company is planning to build a natural-gas pipeline to shore that will replace the heavy fuel oil burned for the country’s power plants, lowering costs to consumers and businesses.
“We are committed to develop these resources in the most responsible way with a minimal impact on the environment,” said Rod Henson, Exxon’s Guyana manager. “We stand by our operations, and in the unlikely event of an incident, we will absolutely respond immediately and we will fully take care of our responsibilities.”
Local oil executives say one obstacle to overcome is a lackadaisical attitude toward safety among Guyanese workers, who frequently arrive at their construction and wharf jobs in flip-flops and sometimes use their hard hats as soup bowls. That is something Exxon and other companies are working to change with courses and other training that teach workers to be careful, not only for their own safety but also to safeguard the fragile marine environment.
At a recent daily meeting of the crew of the Noble Bob Douglas to review environmental and safety precautions, Mr. Inniss, the roustabout, was given a chance to make his own safety presentation. He told of a serious accident he had a couple of years ago working on his motorcycle when he neglectfully left the motor running while adjusting a chain. He lost three fingertips.
“Use your heads before you use your hands,” he told the room full of Guyanese and American workers. He got an ovation and smiled proudly.
‘I See a Lot of Red Flags’
To visit the most senior oil regulator in Georgetown, one needs to climb an exterior staircase of warped wood that could sorely use a fresh coat of paint.
At the top is the tiny office of Newell Dennison, the acting head of the Guyana Geology and Mines Commission, whose desk is stacked high with folders beside a single metal filing cabinet. His office is spare of decorations, aside from two bouquets of artificial tropical flowers.
Mr. Dennison has a computer by his desk, from which he could consult data gathered by Exxon drill ships, though he said he had yet to do so. “We’re in transition,” he explained. “It’s a challenge.’’
For all the international attention that Guyana’s oil bonanza is beginning to generate, Mr. Dennison and the Department of Natural Resources have a mere nine technically trained people responsible for regulating oil production, engineering and geological research.
“You would expect we would have a problem to have 100 percent monitoring with our lack of resources,” said Mr. Dennison, a middle-aged geologist with horn-rimmed glasses and a neatly trimmed goatee. “My commission cannot be all of a sudden everything people expect us to be.”
There are a few signs of progress.
Guyana’s president, David A. Granger, a retired military commander leading a fractious coalition, has tried to establish a legal framework for the coming bonanza. To bypass corrupt officials, Mr. Granger has announced his intention to form an energy department for policymaking, responsible to the president, and an independent petroleum commission to regulate the industry and grant exploration and production licenses.
Under pressure to break with past secretive deals with international companies, Mr. Granger published Guyana’s contract with Exxon on a government website in December, opening a vigorous public debate on its terms. He has promised to end closed-door bidding for drilling rights, and to open auctions for future development.
Many of the changes have been promoted by Jan Mangal, Mr. Granger’s personal petroleum adviser and brother of Lars Mangal, the businessman. Jan Mangal, a Guyanese-born former Chevron project manager, has advised the president to put a hold on new leasing until the petroleum commission can be established with new personnel and has called for an investigation of several oil-exploration concessions made by the previous government to small oil companies.
“I see a lot of red flags,” said Mr. Mangal, who shuttles between Guyana and his home in Houston. “We cannot allow the Guyanese industry to be built around this shabby foundation of corruption.”
There are other signs of trouble.
Foreign development bank advisers have told the government that legislation to create a sovereign wealth fund to invest the royalties and taxes coming to the government lacks sufficient regulatory controls to avert corruption. The legislation is now in limbo. Mr. Granger’s energy department has not gotten off the ground, and a bill to set up the petroleum commission is stuck in the National Assembly.
That leaves Mr. Dennison and his commission in charge of regulation. He said he and everyone in the government felt pressure to get things right.
“Of course I worry,” Mr. Dennison said.
Clifford Krauss is a national energy business correspondent based in Houston. He joined The Times in 1990 and has been the bureau chief in Buenos Aires and Toronto. He is author of “Inside Central America: Its People, Politics, and History.” @ckrausss
(Trinidad and Tobago Newsday, Richardson Dhalai, 19.Jul.2018) – Former attorney general Ramesh Lawrence Maharaj, SC, is questioning why the National Gas Company (NGC) is continuing legal action against SIS and Rainforest, after the Privy Council dismissed NGC’s appeal and ruled in favour of the two companies.
Addressing a media conference at his Irving Street, San Fernando law offices on Wednesday, Maharaj recalled that the contract to build the Beetham Water Recycling Plant was entered between NGC and SIS on March 10, 2014.
However, it was terminated in 2015 after NGC alleged that work done by SIS was overpriced and that SIS owed NGC $180 million. NGC subsequently obtained a Mareva Injunction against SIS, to freeze its assets and property up to the value of $180 million. A Mareva injunction is an order granted by the Court to freeze the assets of a person or entity named in a case.
Since then, the matter was heard in the local High Court and Court of Appeal and finally in the London-based Privy Council where the matter was dismissed. Maharaj said despite the Privy Council’s ruling, NGC is continuing with litigation by now applying to the High Court to, “correct their omissions and regularising their position so the matter may be resuscitated and resumed all over again.”
“This means its application for relief from sanctions can go from the High Court to the Court of Appeal and to the Privy Council again incurring substantial costs.” He said the NGC is now liable to pay both SIS and Rainforest damages which both companies incurred from December 2015 to July 16, 2018 as a result of the injunction brought against both of them.
The legal costs are very expensive when you are seeking redress at the level of the local Court of Appeal and the United Kingdom’s Privy Council. They (NGC) must say to the population whether they can justify using taxpayers’ money in such an expensive litigation when it could be avoided, he said.
(Trinidad Guardian, 19.Jul.2018) – Petrotrin chairman Wilfred Espinet said cost reduction initiatives undertaken by the interim executive team installed at the energy company resulted in a second quarter profit after tax of $85.6 million.
“The installation of a new executive team from the beginning of March and the implementation of the strategies developed together with experts’ advice produced noticeable results in reducing cost and cutting waste,” he said.
“The mandate given to the board, to make Petrotrin a sustainable profitable entity, through proper governance and management of a competitive business, is planned in three phases: Survive, Thrive and Grow.
For the past three months, the focus was on the first phase, “Survive”. Discretionary spending that was not adding tangible benefits to the operations was reduced and we concentrated on cutting waste.”
Espinet said results for the period ended June 30 followed a loss of $517.5 million for the quarter ended March 31.
Recently published results showed a decrease in the state owned company’s operating costs of $92.4 million when compared to the same quarter last year and a decrease of $41.9 million when compared to the quarter ending March 31.
In addition, Petrotrin earned $18 billion in revenue for the nine months ending June 30 —a 21.2 per cent increase with the corresponding period in 2017, which Espinet was due to higher oil prices.
He said in a statement accompanying the financial results: “Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) increased to $1,767.4 million, or 80 per cent more than the 2017 result for the comparable period. Despite the enhanced operating results, the Group incurred a loss before tax of $242.8 million which translated to a loss after tax of $500.7 million,” the chairman said.
Petrotrin’s asset base decreased to $31.6 billion compared with $37.4 billion for the corresponding period in 2017.
Espinet explained: “This was primarily because of the write down of our fixed asset balance for an impaired asset and the reclassification of previously capitalised borrowing cost on the ULSD project to expense.
Total debt to equity and current ratios as at June 30, 2018, were 3.49 and 0.52 respectively, compared to ratios of 1.07 and 0.41 as at June 30, 2017.
“Shareholder’s equity of $3.3 billion as at June 30, 2018, represented a decrease of 69.73 per cent when compared with the period ending June 30, 2017.”
The chairman said Petrotrin is embarking on the next phase of its restructuring programme, Thrive, where the focus will be on “designing the organization built for purpose around its operational units.”
He added: “As we embark on this phase, we will consult with all stakeholders to garner support for what is undoubtedly a monumental exercise that will have a profound impact on all the citizenry of Trinidad and Tobago.
“The board is encouraged by the level of support and extraordinary efforts from employees and is committed to finding a sustainable solution that is equitable to all stakeholders.”
(Trinidad and Tobago Newsday, Sean Douglas, 19.Jul.2018) – BHP Billiton’s new gas-find 200 kilometres off the Mayaro coast is due to tax-breaks for exploration given by the former UNC government, Opposition spokesman on energy, David Lee, said in a statement on Thursday.
He attributed the find to the “innovation, tremendous development and effective management” in the energy sector under the Kamla Persad Bissessar led government.
Lee said in 2012, BHP had won the relevant block (known as TTDAA 5) in a competitive bid round process. “These deep water bid rounds have been described as the most successful in our nation’s history given the level of competition which saw 12 of the world’s top oil and gas companies compete against each other to search for hydrocarbons in Trinidad and Tobago’s deepwater.
He said before 2012 past administrations had failed to secure any deepwater exploration and discovery of stranded natural gas.
“But thanks to the marketing efforts and significant steps such as the reprocessing of seismic data by the last administration today our energy sector, our economy and citizens can benefit from these discoveries. “What made these explorations a reality, explorations which today are no doubt aiding the economy’s turn around due to increase natural-gas discovery, was the implementation of key fiscal incentives.”
Lee said the Goverment had criticised these incentives, yet these were the driving factor that enabled oil/gas companies to make the capital investment necessary to facilitate such projects. He urged people to recall that this turnaround was due to the People’s Partnership’s hard work, and not be fooled by the Government trying to take credit.
(Trinidad Express, Aleem Khan, 18.Jul.2018) – Australia’s BHP Billiton found new gas offshore Trinidad, the company confirmed in a statement yesterday.
“In Trinidad and Tobago, following the gas discovery at LeClerc, we commenced Phase 2 of our deepwater exploration drilling campaign to further assess the commercial potential of the Magellan play. The Victoria-1 exploration well was spud on June 12, 2018 and encountered gas.
Following completion of the Victoria-1 well, we expect the Deepwater Invictus to drill the Bongos prospect in Northern Trinidad and Tobago,” BHP Billiton said in a news release.
(MEEI, 17.Jul.2018) — The Ministry of Energy & Energy Industries (MEEI) announced that Couva Marine 2 – the leaking oil well in the Gulf of Paria – was successfully brought under control at 12:00 noon today. The shut – in well developed a leak on July 4, 2018 and had been emitting a combination of gas and oil since then.
The “well kill plan”, which went into effect at 6:00 a.m. today, is the result of several days of strategizing and planning to ensure that the well was brought under control without injury to personnel involved and with minimal impact on the environment.
Today’s milestone is a significant one and represents the initial stage in the formal abandonment process through which the well will be properly capped and the threat to health, safety and the environment removed.
Operations are still in progress at the well site and marine craft operators are requested to continue to maintain an exclusion area with a radius of three (3) nautical miles.
(Trinidad and Tobago Newsday, 16.Jul.2018) – State-owned National Gas Company has lost an appeal in its multi-million claim against Super Industrial Services (SIS) and another company as the Privy Council today dismissed an appeal in which it challenged a decision to strike out its lawsuit on the ground that it failed to meet strict timelines for civil cases set in the Civil Proceedings Rules (CPR).
In February last year, the Court of Appeal, in a majority ruling, agreed with SIS’ contention that the judge was not actively managing the case when NGC failed to adhere to the rules in its prosecution of its claim against SIS and RFRL to set a case management conference after the lawsuit was filed in December 2015, as required by the rules.
In its lawsuit, NGC sought an order to prevent the dissipation assets in the contract dispute over the controversial Beetham Water Treatment Plant.
NGC had also btained a freezing order up to $180 million against SIS’ assets and an injunction restraining RFRL from dealing with certain assets. The freezing order was granted pursuant to arbitration proceedings which are still ongoing.
The dispute between the parties started in 2015 after delays in the US$162,055,318.77 project, which was due to be completed on October 21, 2016.
The contract was eventually terminated on November 24, 2016, after SIS reportedly informed NGC it was unable to continue with the work.
(Energy Analytics Institute, Ian Silverman, 12.Jul.2018) – Foreign Direct Investment (FDI) in Latin America and the Caribbean fell for a third straight year in 2017, reported the Economic Commission for Latin America and the Caribbean or CEPAL by its Spanish acronym.
(LoopTT, 9.Jul.2018) – Cleanup operations continue following a leak at the Couva Marine 2 Well.
Personnel with the Energy Ministry and Petrotrin’s Incident Command team have been monitoring the leaking wellhead and assessing the nature and impact of the hydrocarbon emissions.
The leak, which was initially reported last Wednesday, is a combination of gas and light oil.
The incident command team met on Sunday to manage the impacts of the incident and to safely bring the matter to a safe conclusion.
The focus of the Incident Command Team over the past few days has been on analysing available data on the wells in the area and the development of strategies to bring the well under control. In doing so, the safety of personnel has been the number one priority.
A number of possible scenarios, including the drilling of a relief well, have been developed and proposed solutions are being evaluated.
The primary considerations in evaluating the various strategies have been the health and safety of personnel and to mitigate further negative impact on the environment.
In this regard, assistance has been sought from the multinational energy companies operating here, as well as foreign entities with which Petrotrin is affiliated, who have experience with the management of oil spills and well control incidents.
As of Sunday, an orange substance, which appears to be emulsified oil, appeared on Carrat Shed and Coffee beaches.
Containment booms with skimmers are being deployed in the area of the leaking well and cleanup crews were mobilised to effect remedial work in any affected areas.
Visits were made to the Carrat Shed and Coffee beaches to determine potential impact.
The Director of Maritime Services has issued an advisory to marine craft operators that “extreme caution is advised and requesting that they maintain a distance of 5 nautical miles”.
This advisory will remain in effect until the situation is resolved. Both Petrotrin and the Coast Guard will maintain patrols in the area and aerial and marine surveillance exercises will continue.
The Ministry urges fisherfolk and other marine craft operators to observe the maritime advisory and to stay clear of the area to avoid injury and also to allow those involved in containment and control activities to do so without impediment.
The Ministry assures that all necessary measures are being taken to ensure that a solution is obtained to repair the leak, and will continue to provide updates as further information becomes available.
(Prensa Latina, 9.Jul.2018) – A fuel leak in the Couva platform, in the Gulf of Paria, Trinidad and Tobago, continues today after four days of being initiated, before which the government requests international assistance.
Since last Thursday, the well has been pouring hydrocarbons in this area, shared with Venezuela, which represents a major environmental risk for the region, local sources reported.
Initially the country requested help from the Petrotrin state refinery to close the well, however, the company does not have the technology required for such action.
For this reason, the government decided to ask for international help to put an end to this spill that, according to official sources, could be caused by a recent earthquake that exploded the head of the well, which began to pour from the surface of the seabed at about 12 meters deep.
Meanwhile, Secretary of Fishermen and Friends of the Sea, Gary Aboud, has called on mariners to steer clear of the site as it is volatile and highly flammable.
It is believed that the oil spill was triggered by a recent earthquake that caused the head of the well to pop, spewing the emissions, up from the surface of the seabed, about 40 feet below.
(Trinidad and Tobago Newsday, Sasha Harrinanan, 4.Jul.2018) – Well Services Rig 110, owned by local drilling contractor Well Services Petroleum Co Ltd (Well Services), is the first local jack up rig to be used for a natural gas campaign in TT waters.
Well Services announced yesterday it had drilled and completed a three well campaign for the Iguana field in Block 1(a) – offshore Trinidad’s west coast. Block 1(a) is owned and operated by DeNovo Energy Ltd (DeNovo). This was TT’s first ever west coast natural gas development campaign.
DeNovo founder and CEO Joel Pemberton said, “This milestone moves us closer to the delivery of first gas from the Iguana field later this year. Gas produced by DeNovo will be sold to NGC.”
Pemberton said Well Services and Rig 110 were chosen because of their proven ability to deliver safely, and their known aptitude for collaborating to overcome operational challenges.
“Together, DeNovo and Well Services delivered this campaign with many first-time achievements, which showcases the power and resilience of both our teams. As a Trinbagonian, I am proud to see local companies operating at global standards, collaborating on competitive solutions, and delivering in the best interest of TT,” Pemberton shared.
Rig 110 delivered drilling and completions activities with zero lost time incidents, in line with DeNovo’s fast-track development plan for the Iguana field. Rig 110 was also the first rig to install a platform subsea structure in the region, securely setting the Iguana Conductor Supported Platform, driving seven conductors, and completing its first flow back well testing and flaring.
Well Services’ operations manager Neil McCartney praised his team for working quickly and clinically to ensure all drilling targets were reached, “despite numerous technical challenges due to the complicated subsurface structure of the field.”
(Trinidad Express, David Renwick, 3.Jul.2018) – You don’t have to look very far to determine the issues facing the Trinidad and Tobago energy industry at the moment. Top of the list would be restoring crude oil production, which languishes at around 72,000 barrels a day (b/d) at the moment.
That can be accomplished by the upstream producers doing more development drilling, as well as bringing new entrants into the industry. It also means tackling new sources of oil, such as the tar (or oil) sands in southern Trinidad.
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(Trinidad Guardian, 4.Jul.2018) – The Ministry of Energy and Energy Industries is predicting that over the next five years methanol prices will average US$375 per metric tonne, while ammonia prices will be closer to US$310 per metric tonne.
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(TeleSur, 29.Jun.2018) — The government of Trinidad and Tobago is projecting that a gas sales agreement with Venezuela will be finalized, signed and ready to be implemented by July 16.
“We have finally narrowed down all of the terms and conditions, and we’re outstanding on one item, and we’re supposed to return to Caracas on Monday the 16th of July, and hopefully then we’ll be able to bring it to closure,” said the Minister of Communication Stuart Young on Thursday.
His comments come just one day after he led a delegation to Venezuela to continue negotiations on the agreement.
Speaking to the media, he said that once the deal is signed “we’re looking at an estimate of between 18 months to two years to build the infrastructure and get first gas here. We are pressing as hard as we can. As you know, Venezuela has a number of challenges so despite those challenges the conversations and talks continue to progress and what I can say is that we’ve now narrowed it down to one item and for these types of discussions that’s quite an accomplishment.”
Accompanying him during Wednesday’s talks in Caracas included the President of National Gas Company of Trinidad & Tobago Limited, or NGC, Mark Loquan, former Permanent Secretary Selwyn Lashley and other members of NGC.
The Venezuelan delegation included Minister Manuel Quevedo, People’s Minister of Petroleum and President of PDVSA, Vice Minister Douglas Sosa and executives of PDVSA and the Venezuelan Ministry of Petroleum.
Shell executives also attended the meetings.
The agreement will turn Venezuela into a gas exporter, with gas from the Dragon Field, which contains 2.4tcf of reserves, expected in 2020.
Trinidad & Tobago and Venezuela are also in discussions to develop gas in the Loran/Manatee fields that straddle the countries’ maritime borders.
According to estimates, Loran-Manatee field has about 10.25 trillion cubic feet of gas, 74 percent of which belongs to Venezuela with Trinidad and Tobago holding the other 26 percent.
(Trinidad and Tobago Newsday, Julien Neaves, 27.Jun.2018) – Guyana and its eight oil finds can be a game changer for state-owned Petrotrin and TT, says National Gas Company (NGC) Chairman Gerry Brooks.
He was speaking during a presentation at the Chamber of Industry and Commerce’s Business Outlook breakfast meeting held on Wednesday at the Chamber’s offices, Westmoorings.
Brooks said Guyana’s eight finds equated to 500,000 barrels of oil and 120,000 by 2018.
He added the Guyanese were “shopping” in Mexico and had help from the International Monetary Fund.
“We have to go there in a very professional manner, a very engaging manner, a very thoughtful manner.”
Brooks said “everybody” was in Guyana and there was excellent specialised oilfield services including from Repsol.
“There is a lot of expertise. There is a lot of opportunity for Trinidad and Tobago.”
He said NGC was leading the charge and the expectation was that there would be a mutual cooperation agreement which will find a framework for the countries to work together.
“We will work closely with the State companies (in Guyana).”
(LoopTT, 27.Jun.2018) – Minister in the Office of the Prime Minister, Minister in the Ministry of the Attorney General and Legal Affairs and Minister of Communications Stuart Young led a Trinidad and Tobago delegation in Venezuela on Wednesday.
The team comprised of the President of the National Gas Company of Trinidad and Tobago Limited (NGC), Mark Loquan, former PS Selwyn Lashley and other members of NGC to Caracas, Venezuela to continue negotiations with respect to the Venezuelan Dragon across the border gas field.
The Venezuelan delegation was led by Minister Manuel Quevedo, People’s Minister of Petroleum and President of PDVSA, Vice Minister Douglas Sosa and executives of PDVSA and the Venezuelan Ministry of Petroleum.
Executives of Shell were also in attendance led by Derek Hudson, Country Chair of Shell Trinidad’s operations.
The parties spent hours negotiating, bringing the possibility of the cross-border gas deal closer.
There remains a number of areas where further work is required and Minister Young agreed to return to Caracas, Venezuela in two weeks for the two Ministers to attempt to settle the terms of the agreement.
Minister Young extended an invitation for Minister Quevedo to come to Trinidad to visit the LNG and other downstream Petro-chem operations.
All parties involved remain committed to the Dragon Gas Project becoming a reality.
(AIPN, 27.Jun.2018) – Petroleum consultants and other energy sector experts will discuss the challenges and opportunities in Trinidad & Tobago, Guyana and Suriname during a discussion in London.
The select group will consist of Kevin Ramnarine, former Trinidad & Tobago Energy Minister (2014-15); Energy Strategic Advisor and Lecturer Carlos Bellorin, Principal Consultant, IHS Markit; Lecturer, Queen Mary University and SciencesPo Ekpen Omondude, former Senior Economic Adviser, The Commonwealth Secretariat (2008-2018); Director, Bargate Advisory Limited.
With the discovery of Liza-1 within the Stabroek Block by ExxonMobil and its partners in 2015 – and after years of frustrating exploratory results – all eyes have been on the Southern Caribbean. After Liza-1 and the seven discoveries that followed (including Longtail-1 announced on 20 June 2018), the Guyana-Suriname Basin has all but confirmed its massive potential. On neighbouring sides of Guyana, the E&P outlook has also changed after 2015.
To the east in Trinidad & Tobago – one of the more mature producers in the region – successive governments have tried to bring the island’s hydrocarbons industry to the attention of investors with limited success. Without any significant recent discoveries, Trinidad & Tobago will need to improve its performance and hydrocarbons regime. This will be necessary to replace reserves and increase production if it is to maintain its gas-linked economy and leadership as a gas producer.
To the west lies Suriname. After recent wells have come up dry, it needs (at least) a commercial discovery to finally confirm its long-coveted potential. Venezuela also plays a pivotal role in regards these two, smaller, nations: an embattled Venezuela is currently engaged in a high-profile boundary dispute with Guyana and could enter into a strategic partnership with Trinidad & Tobago over two key gas fields.
During this session, we will touch on the most critical issues from these three countries, including comments on their legal-fiscal regimes and political risk while looking forward to their challenges and opportunities. We will offer an on-the-ground view of one the hottest new deepwater provinces in the world.
WHEN: Thursday, June 28, 2018 (5pm – 8:30pm Europe/London)
COORDINATOR: Akin Gump
VENUE: Bishops Square
WHERE: London E1 6EG United Kingdom
Registration will be from 5:00 – 5:30 p.m., followed by the presentations and Q&A until 7:00 p.m. A networking reception with drinks and canapes will follow from 7:00 – 8:30 p.m.
Online registration has been closed. On-site registration will be on a space available basis and is complimentary for all members and non-members. If you have any questions, please contact Carlos Bellorin at Carlos.Bellorin@ihsmarkit.com
(Stabroek News, 8.Jun.2018) – Having long established itself as a significant contributor to tertiary education in Guyana, the Critchlow Labour College is seeking to embrace the demand for training in the various disciplines associated with the country’s emerging oil and gas industry to rebuild its reputation as a major contributor to education delivery in Guyana.
Principal of the College, Ivor English told Stabroek Business on Monday that the two-day preliminary Oil and Gas Course Seminar delivered late in May in collaboration with two Trinidad and Tobago companies Apollo Global Vision Ltd and Kaizen Environmental Services was intended to serve as an introduction to a wider ambition of creating a high-level Centre for Oil and Gas that will seek to offer courses that will equip graduates for rewarding jobs in the sector.
Towards this end the College has already signed a Memorandum of Understanding with Kaizen and Apollo under which the two specialist companies will be intimately involved in both the design and delivery of courses run by the local Centre for Oil and Gas.
English told Stabroek Business that the decision by the College to move in the direction of establishing an institution specializing in the training of Guyanese in oil and gas-related fields had to be seen within the context of the importance which the institution places on remaining relevant. Reminding of the period some years ago when the Critchlow Labour College’s certification in Industrial Relations was recognized as a vehicle for University of Guyana admission, English said that the MOU with the two Trinidad and Tobago companies was aimed at a “long-term relationship that would see the Centre for Oil and Gas transform into and Oil and Gas Academy located off the Critchlow campus. At that stage we will be taking our training in the various oil and gas-related disciplines to diploma and degree levels,” English told Stabroek Business.
At the same time English disclosed that the College intended to engage ExxonMobil and its various oil exploitation partners to discuss a role for the Academy in meeting some of the specialized needs associated with the oil and gas recovery programme. “We are in the process of opening communication with these entities with a view to assuring them that we have the skills to deliver their requirements,” English said.
Conceding that the decision to create an off-campus facility was informed by the reality of a lack of space on the Woolford Avenue campus to accommodate all of the materiel associated with the delivery of oil and gas programmes English said that in the short term the CLC will create the faculty space and administer the programmes for which it will receive a facilities fee.
Asserting that the growth of the College’s curriculum will have to take place against the backdrop of the modernization of the institution, English said that as funds are garnered from courses which are expected to become operational over time, “revenue will be set aside for physical upgrading, computerizing etc. Our focus is to create job readiness for oil and gas. In a way we are uniquely positioned to provide these services since we are already accommodating the operations of the MATPAL Marine Institute.
English told the Stabroek Business, meanwhile, that the need to garner funding to develop the infrastructure for delivery of an oil and gas curriculum depended on significant funding. He said that much of the momentum of the institution had been reduced on account of the previous administration’s decision to put an end to the granting of an annual subvention amounting to more than $30 million annually. Two years ago the current administration restored a $15 million subvention which the College said was inadequate to meet its needs. A lack of resources has meant that sections of the Critchlow campus had fallen into disrepair and English told Stabroek Business that the institution was determined to create a modern complex.
Secretary to the Board of the College and General Secretary of the Guyana Trades Union Congress (GTUC), Lincoln Lewis told the Stabroek Business that over the years the institution had “more than justified benefitting from a state subvention and that the current state of affairs as far as the subvention was concerned was reflective of “an insensitivity to the contribution which the Critchlow Labour College has made over the years to improving the skills and enhancing the formal qualifications of the workers of Guyana”.
English told Stabroek Business, meanwhile, the Oil and Gas Academy would be seeking to provide support to both the public and private sectors as the country seeks to build capacity in the oil and gas field.
(Energy Analytics Institute, Aaron Simonsky, 7.Jun.2018) – Kevin Ramnarine discusses the regional deep-water industry in the southern Caribbean during a technical speech in Trinidad on the emerging regional deep-water province of Suriname, Trinidad and Tobago and Guyana, which was hosted by the Geological Society of Trinidad and Tobago and streamed live.
(Energy Chamber of Trinidad and Tobago, 7.Jun.2018) — The Energy Chamber of Trinidad and Tobago invites you to our Clean Energy Conference 2018, now in its 2nd year and themed “Towards Implementation”. This is the only conference in Trinidad and Tobago dedicated to renewable energy and energy efficiency. In 2017, the conference was very well attended, and with many local and foreign experts representative of the private sector, academia, and NGOs scheduled to present this year, we are expecting to host another very informative session.
(Energy Analytics Institute, Piero Stewart, 7.Jun.2018) – Cuba’s foreign currency will be under pressure this year.
“Difficulties with fuel supply and a drop in exports have continued to put pressure on the availability of foreign currency,” wrote Caribbean Economist Marla Dukharan in a recent Caribbean Economic Report, which is available monthly on her website.
Additionally, Venezuela’s state oil company PDVSA reportedly acquired $440 million in foreign crude this year to send to Cuba on favourable credit terms, however, recent U.S. sanctions against Caracas-based PDVSA could impact such deals in the future, she said.
As a result, low growth in Cuba of less than 2% is likely to persist as a result of Venezuela’s crisis and shifts in U.S. policy, while availability of currency will remain a challenge, said Dukharan, also Chief Economist at Barbados-based fintech company, Bitt Inc.
“The transition of power underway [in Cuba] is not expected to drive large sways in policy with the new President Miguel Diez-Canel Bermúdez committing to the same economic model and reforms being implemented by the Castros,” Dukharan concluded.
(Energy Analytics Institute, Aaron Simonsky, 7.Jun.2018) –That’s according to comments by former Trinidad and Tobago Energy Minister Kevin Ramnarine.
“On average, deep-water projects need an oil price of US$42 per barrel to break even at an NPV10. Assuming a 15% internal rate of return hurdle (NPV15), 5 billion barrels of pre-sanction deep-water reserves now breakeven at US$50/boe or lower. This triples to 15 billion boe at US$60/boe,” said Ramnarine, speaking in Trinidad during a technical talk on the emerging regional deep-water province of Suriname, Trinidad and Tobago and Guyana, which was hosted by the Geological Society of Trinidad and Tobago and streamed live.
Ramnarine — a strategy energy advisor — also highlighted that during the period of 2012-2014, there were 510 deep-water exploration wells drilled in 55 countries, while during 2015-2017, there were 231 deep-water exploration wells drilled in 37 countries.
“We have four drill ships simultaneously working in this part of the world [Guyana and Suriname]. Five years ago that was probably something we couldn’t conceive of,” he said.
(Energy Analytics Institute, Ian Silverman, 31.May.2018) – Former Trinidad and Tobago Energy Minister Kevin Ramnarine will speak in Port of Spain about the regional deepwater industry in the Southern Caribbean.
An abstract from his technical talk about the regional deepwater industry in the Southern Caribbean, and the case of Guyana, Suriname & Trinidad and Tobago, follows:
“The 2015 discovery by ExxonMobil of oil in Guyana’s Stabroek Block, the discovery of natural gas by BHP Billiton in Trinidad and Tobago’s Block TTDAA 5 in 2017 and ongoing exploration in both countries and in Suriname have set the stage for a major deepwater oil industry in the Southern Caribbean which could potentially extend to Barbados. Such an industry will have a transformative effect on the practice of geoscience and all aspects of petroleum engineering. In addition, deepwater oil and natural gas commercialization require different skills and technologies different to what obtains on the shallow and average depth waters of continental shelf.”
For more details contact The Geological Society of Trinidad & Tobago at email@example.com
(LoopTT, 24.May.2018) – Moody’s Investors Service is projecting an Energy Sector-led rebound in growth to support the fiscal trajectory.
On Wednesday, Moody’s upgraded Trinidad and Tobago’s Trinidad Drilling Ltd.’s (Trinidad) Corporate Family Rating (CFR) to B2 from B3.
The country’s rating outlook remains stable at this time.
Moody’s also noted a narrowing fiscal deficit which it attributed to Government’s restraint and an increase in energy and non-energy tax revenue.
Among the Government’s strategies noted in the report are plans for the liquidation of CL Financial.
Moody’s projects that excluding revenue from asset sales, revenue collection will improve due to higher oil prices and increased gas production, as well as increased non-energy tax collection.
Additionally, the ratings agency stated that the upward revision of energy sector revenue from seven percent of GDP in the original budget to eight percent reflects higher oil prices and increased gas production.
With a full year of production at Juniper in 2018, and prospects for gas production at Shell’s Starfish field to start in the second half of the year, natural gas production could reach 3.8 billion standard cubic feet per day (mmscf/d) by the end of 2018.
Moody’s also identified an increase in corporate tax revenue of more than $500 million in the first half of fiscal 2018 compared to the same period a year ago.
(Energy Analytics Institute, Aaron Simonsky, 24.May.2018) – Energy Analytics Institute, formerly LatinPetroleum Inc., continues to promote its “Energy Education Initiative” in the Americas, also known as “NRG ED.”
NRG ED is structured to work with K-12 schools, community colleges, four-year colleges and universities, workforce training programs, communities and businesses, and aims to promote reduction of non-renewable energy usage in favor of renewable energies. However, the core of the initiative is education, without which the NRG ED initiative would not be.
“At its core the initiative is really focused on education,” said Chad Archey, Editor-in-Chief at Energy Analytics Institute from Atlanta, Georgia.
EAI views basic education as most important in the overall learning process and also promotes educational initiatives and research from grade school to the professional level related to the energy sector. EAI aims to foment constructive dialogue regarding energy usage as well as ways to reduce the carbon footprint left by non-renewable energy resources through the following: 1) educational consultancy, 2) development and distribution of educational and training materials, and 3) promotion of debate and discussion regarding renewable energy alternatives.
Energy Analytics Institute (EAI), formerly LatinPetroleum Inc. (dba LatinPetroleum.com), is a Houston-based independent company focused on producing non-biased news, updates and special reports for investors interested in the Latin America and Caribbean petroleum sectors.
(By Trinidad Express, Aleem Khan, 22.May.2018) — BPTT’s standardized measure of discounted future net cash flows for 2017 was updated to US$3.3 billion in the company’s annual report released earlier this month.
Up from US$909 million in 2016, and US$1.8 billion in 2015, BP cautioned: “Future net cash flows have been prepared on the basis of certain assumptions which may or may not be realized. These include the timing of future production, the estimation of crude oil and natural gas reserves and the application of average crude oil and natural gas prices and exchange rates from the previous 12 months.
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(InterFax, 18.May.2018) – Jerome Dookie, the chief executive of Trinidadian ammonia producer Caribbean Nitrogen Co. (CNC), said on Wednesday that gas supply disruptions have made Trinidad and Tobago a less attractive location for new petrochemical projects.
“In terms of new projects being built, Trinidad and Tobago is no longer an attractive destination because the feedstock availability is questionable and the pricing is higher,” Dookie was quoted as saying by local press.
“Certainly, the US now, driven by shale gas, is a preferred destination for capital,” he added.
(By Trinidad Express, Aleem Khan, 18.May.2018) — Royal Dutch Shell’s Derek Hudson, local country chair of the world’s second largest oil and gas company, said Trinidad and Tobago has ‘only scratched the surface’ with regard to its offshore oil and gas exploration and production. However, speaking at the Institute of Marine Affairs (IMA) first public lecture to mark its 40th anniversary, he urged diversification of the economy. As one possible direction in which to diversify, he mentioned the ‘blue economy’, which refers to production and consumption of goods and services from, in, of and back to the sea.
Hudson said: “When we speak for a long time about the economic diversification of T&T and the progress that we have made in our coastal waters and marine areas, it’s something that we really, seriously need to look at, as we advance this economy going forward, and even from somebody who is in the energy sector today, (I say) Trinidad needs to diversify its economy and do so quite rapidly.”
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(By Trinidad Express, 17.May.2018) — The CEO of ammonia producer Caribbean Nitrogen Company (CNC), Jerome Dookie, said yesterday that problems with natural gas supplies have made T&T a less attractive location for new petrochemical projects, given issues of gas curtailment and the current price of natural gas.
“Capital will always follow where it gets the best return. And in terms of new projects being built, Trinidad and Tobago is no longer an attractive destination because the feedstock availability is questionable and the pricing is higher,” Dookie said, adding: “Certainly, the US now, driven by shale gas, is a preferred destination for capital. So that new construction projects—and not only Proman but other players globally, will tend to be attracted to those jurisdictions.”
Asked whether he was saying that the petrochemical sector in T&T is mature or in decline, the Point Lisas executive said there was no enough gas supply now to meet the overall demand on the industrial estate and at the Point Fortin liquefaction facility of Atlantic LNG.
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(Trinidad and Tobago’s Newsday, Richardson Dhalai, 10.May.2018) — Trinidad and Tobago has been involved in the petroleum sector for over 100 years and is the largest oil and natural gas producer in the Caribbean.
However, by the early 1990s its hydrocarbon sector moved from being primarily an oil-based economy to a mostly natural gas-based sector with the construction of the LNG trains at Point Fortin.
The energy sector accounts for around 32 per cent of the country’s gross domestic product (GDP).
In Finance Minister Colm Imbert’s October 2, 2017 budget he said, “Despite the challenges posed by the low price environment, the energy sector faces a very positive outlook based on a number of new gas projects which are scheduled to start production over the next two to three years.”
He said a new tax regime would also be introduced to provide incentives for increased exploration and production that should set the stage for increased oil and gas output.
Oil production for the first five months of 2017 had levelled off at 73,500 barrels per day (bpd), the minister had said, as compared with 73,800 bpd for the corresponding period of 2016, although this amount was well below the rate of 100,851 bpd in May 2010.
The 2018 budget was pegged on an oil price of US$52 and a gas price of US$2.75 per mmbtu.
On May 8, Bloomberg was reporting that Brent crude, the main international benchmark, was trading at US$73.44 while WTI crude, TT’s benchmark, was trading at US$68.29. Natural gas was down slightly to US$2.72 mmbtu.
Five months into the 2018 fiscal year, Energy Minister Franklin Khan presented the first public account of the energy sector at the Hyatt Regency, Port of Spain on March 14. His presentation was themed Our Oil, Our Gas, Our Future.
He said TT continued to be an important oil and gas producing hub and cited the major multinational energy giants which continued to maintain a presence in the country, such as bpTT, Shell, BHP, EOG Resources and Perenco.
He said the upstream companies had committed to spend over US$10 billion in exploration and development activities over the next five years, with the effects already being felt as of December 2017. Natural gas production, which had fallen to 3.2 bcf/d per day had reached a daily production of 3.8 bcf/d.
The US$10 billion is expected to be spent on capital goods such as rigs, sub-sea equipment, seismic equipment, platforms, turbines and pipes with the exception of platforms.
The investments include the BP Angelin project, which is due to come on-stream in 2019 and is expected to provide in excess of 550 mmscf/d.
The other projects include De Novo energy exploration of Block 1 (a) off Trinidad’s west coast; the East Coast and North East Coast development projects of Shell, such are Starfish, Dolphin, Dolphin Deep, Endeavour and Bounty fields, and the Cassra and Orchid on the North East Coast.
BHP has also announced a deep-water natural gas discovery in Block 5 on the East Coast, with preliminary assessments indicating between five to ten tcf of gas with a high probability of oil.
Approximately nine exploration wells are expected to be drilled, including three deep-water wells.
Khan said TT’s gas reserves, based on the last Scott Reserves audit, were 22.7 tcf and gas resources were estimated at 43.7 tcf.
He said the audit information did not include the gas finds of the BHP discovery in Block 5 or the BP Savannah and Macadamia fields of 2 tcf.
“Our gas reserves are consumed at the rate currently estimated at 3.5bcf/d or 1.2 to 1.4 tcf per annum,” he said, adding this was divided between LNG production (60 per cent) and the downstream industries including power generation, which consumed 40 per cent of the gas supply.
Currently 99.8 per cent of power generation is fuelled by natural gas and 0.2 per cent by diesel.
He said data from the Ministry of Energy and Energy Industries and the Ministry of Finance reveal that taxes and royalties collected from the sector have been on a downward trend.
He said energy sector revenue, which peaked at $28 billion in 2008, fell to $1 billion in 2017 and cited falling energy prices as playing a part for the reduced revenue.
According to the Ministry of Energy, TT’s 2017 crude oil production stood at 71,824 bpd while its refinery output at Pointe-a-Pierre is 135,000 bpd.
The country’s proven oil reserves is 199.54 million barrels, while probable reserves are 85.46 million barrels and possible reserves are 124.77 million barrels.
Natural gas production is currently 3.4 bcf/d with proven reserves standing at 43.45 million barrels; probable reserves at 24.39 million barrels and possible reserves at 30.83 million barrels.
Meanwhile, State-owned oil company Petrotrin has identified the South West Soldado Field Development as one of the most immediate opportunities for increasing indigenous crude oil production.
The project, which is divided into three phases, is currently in its first phase of execution, which includes the installation of a temporary compression and production facility, drilling of eight new wells and the reactivation and workover of inactive wells.
The first phase also includes the installation of a new gas sales pipeline; installation of additional infrastructure and submarine pipelines to accommodate the increased production of fluids (inclusive of gas lifting capability for the reactivated wells) and the installation of replacement main oil bulk line from RP10 to RP1.
(BPTT, 1.May.2018) – Mrs. Claire Fitzpatrick has been appointed as Regional President of BP Trinidad and Tobago (BPTT). In this role, Mrs. Fitzpatrick will be accountable for BPTT’s performance and BP’s business interests in Trinidad and Tobago. She is the first female to lead BPTT, which produces approximately 15% of the BP group’s global production.
Mrs. Fitzpatrick holds a BSc in biological sciences from the University of Edinburgh and is a fellow of the Institute of Chartered Accountants in England and Wales. She joined BP from Ernst & Young in 2002 as chief accountant, upstream and since then has held commercial and leadership roles in BP’s upstream business. Mrs. Fitzpatrick has also worked in BP’s corporate centre and most recently managed BP’s upstream joint venture in Australia.
Mrs. Fitzpatrick is honored to lead BPTT: “I look forward to working with the BPTT team and stakeholders to the mutual benefit of Trinidad and Tobago and BP.”
Note to editors:
BPTT has 14 offshore platforms and two onshore processing facilities.
(Energy Analytics Institute, Aaron Simonsky, 1.May.2018) – The United Nations Economic Commission for Latin America and the Caribbean, also known as ECLAC or CEPAL by its Spanish acronym, projects economic activity in troubled Venezuela will contract 8.5% in 2018.
Gross domestic product or (GDP) estimates for other important countries and regions follows:
(Energy Analytics Institute, Ian Silverman, 30.Apr.2018) – Venezuelan lawmaker José Brito wrote in a Twitter post that the OPEC country never closed its doors to the hundreds of Trinidadian nationals that left their twin-island nation to seek opportunities in Venezuela.
When Trinidad’s Prime Minister Keith Rowley says in regards to Venezuela immigration that Trinidad “will not convert itself into a refugee camp,” he needs to remember Venezuela never closed its door on Trinidadian immigrants, wrote Brito.
(The Energy Chamber of Trinidad and Tobago, 19.Apr.2018) – The Sekondi Takoradi Chamber of Industry and Commerce and the Ghana National Petroleum Corporation (GNPC) will be part of an incoming Trade Mission to Trinidad from April 23rd – 28th, 2018.
The Energy Chamber of Trinidad and Tobago is organising a breakfast meeting at which the visiting delegation will present on ‘GNPC’s future plans and business opportunities in Ghana’s Oil & Gas Industry’. The session will take place on Tuesday April 24, 2018 and the details are as follows:
Date: Tuesday 24 April 2018
Venue: Cara Suites Hotel and Conference Centre, Claxton Bay
Time: 9-11am (registration and breakfast begin at 8:30am)
Registration: Please complete and return via e-mail
For more details contact:
Name: Michelle Rahman
(Energy Analytics Institute, Piero Stewart, 27.Mar.2018) – Delegations from Trinidad and Tobago and Venezuela meet in Caracas to review progress related to gas agreements between both nations, reported PDVSA in an official statement.
The delegations reviewed the progress of agreements to finalize construction, operation and maintenance of a gas pipeline that would span from the Dragon field in Venezuela to the Hibiscus field in Trinidad, and eventually supply the domestic market in Trinidad as well as abroad.
The delegation from Trinidad was comprised of the Minister in the Office of the Prime Minister, Stuart Young, and Ambassador Paul Byam; Permanent Secretary at the Ministry of Energy and Energy Industries, Selwyn Lashley; and Chairman of the National Gas Company, Gerry Brooks. The Venezuelan delegation was lead by Venezuela’s Petroleum Minister and President of PDVSA Manuel Quevedo; PDVSA Vice Minister of Gas, Douglas Sosa; and President of the subsidiary PDVSA Gas, Nemrod Contreras.
(Kevin Ramnarine, Strategic Energy Adviser). Former Minister of Energy. Business School Lecturer. International Speaker, 3.Jan.2018) – This is a summary of upstream activity for Trinidad and Tobago in 2018.
1) Rowan will have 4 rigs drilling in 2018. By June 2018 all four will be working simultaneously. Two of these will be with BP, one with EOG and one with Shell. Good luck Rowan.
2) BHP Billiton resumes exploration drilling in Deepwater using the Transocean Invictus. This drilling is related to Production Sharing Contracts signed between 2013 and 2014. A lot of fingers are crossed.
3) Shell does the Starfish Infill Drilling (SID) project, which sees Shell try to tap the reserves of Starfish. They are using a Mearesk Semi Submersible for this. Good luck Shell.
4) DeNovo will have first gas from the Iguana field by Q2 2018. This will make DeNovo, Trinidad’s fifth natural gas supplier. Positive news indeed.
5) BP will be drilling wells for the Angelin project for which first gas is Q1 2019. Sadly we lost the platform in 2017 but the project is on schedule. Angelin became more prospective after the 3D seismic Ocean Botton Cable (OBC) survey of 2012 to 2013.
6) The economy will benefit from a full year of BP Juniper production and this will cause positive economic growth for the first time in 3 years. Congrats to all involved in this very historic project.
7) Work will start on the fabrication of the BP Cassia C compression platform. Hopefully some of this will be done at La Brea.
8) BP will be doing infill drilling on Cannonball and Cashima in 2018.
9) Lease Operators Limited (LOL) will be drilling exploration wells in their Rio Claro Land Block. That block was awarded in 2014. We expect at least 2 exploration wells in 2018 in this block. Maybe we will have an oil discovery on land for the first time since Carapal Ridge (many years ago).
Editor’s Note: Kevin Ramnarine is a strategic energy adviser and the former Trinidad and Tobago Minister of Energy. He is also a business school lecturer and international speaker.
(OilPrice.com, Haley Zaremba, 22.Aug.2017) – In the future, we may be hearing about the Caribbean a whole lot more when talking about oil and gas. Previously, the area was virtually off the map for the fossil fuels industry, despite its proximity to the vast oil reserves of Venezuela. Now, the Caribbean has suddenly become a point of interest since ExxonMobil discovered major reservoirs in nearby Guyana in 2015.
After their initial huge discovery of the Liza oil field 2 years ago, Exxonmobil also announced last month that they’ve discovered more oil in the Payara reservoir off the coast of Guyana, increasing the total discovery to approximately 500 million barrels. This is huge news for both Exxonmobil and for Guyana, which ranks among the poorest countries in the Western Hemisphere.
ExxonMobil (partnered with Hess Corp. and Statoil) has also recently purchased a new deepwater block for exploration off the coast of neighboring Suriname, another potentially oil-filled nation. Some in the industry are already referring to the Guyana-Suriname Basin as the next big oil region.
Now, those good fortunes could be spreading to the Caribbean as well. Trinidad and Tobago has long been the Caribbean’s largest oil and gas producer. The nation has depended economically on their petroleum reserves since the 1990s, with the energy sector currently comprising 34.9 percent of the country’s GDP. However, more recently the small island-nation’s production has been in decline as production from mature fields has waned and exploration for new fields has been slow in starting. Now, Trinidad and Tobago is hoping that the discoveries in nearby Guyana will bring more interest and investment to the Caribbean.
It’s looking like Trinidad and Tobago will get their wish. Just this month BP Trinidad and Tobago announced two major discoveries totaling approximately two trillion cubic feet (tcf) of gas, which the company’s president called “the start of a rejuvenated exploration program on the Trinidad shelf”.
Similarly encouraged by the massive discoveries in Guyana over the last few years and the foreign interest it has garnered, several other Caribbean nations are beginning to assert themselves as potentially oil-rich countries and attempting to woo foreign companies to start investing in exploration around their islands. One of the biggest examples of this is Jamaica, who have recently caught the attention of UK-based Tullow Oil.
Last week Tullow announced plans to return to offshore locations off the southern coast of Jamaica to explore a field of “live oil” that was brought to their attention by local fisherman earlier this year. The firm will ramp up their 3D seismic surveys this year in hopes that the floating oil will lead them to vast oil fields the likes of their neighbors to the south and the nearby Gulf of Mexico.
The Bahamas has also recently publicized their plans to invite international companies to drill in deep waters off the coast, pointing not only to Guyana and the Gulf, but also to neighboring Cuba’s oil reserves as an indication of what treasures may be laying under the surface of the sparkling Caribbean Sea.
Exploration of oil reserves in the Caribbean may also soon be ramped up and revolutionized by major technological advancements from Ursa Space Systems. The high-tech company has announced a planned expansion to take a global oil inventory, with the Caribbean as one of its first major surveyed regions. Ursa will use satellite imagery to provide reliable and independent weekly inventories of oil stocks down to the tank level for easy calculations and better insight on oil supply and demand, especially in areas of the world where there has previously not been readily-available data.
(BPTT, 1.Jun.2017) — BP Trinidad and Tobago LLC announced the sanction for the development of its Angelin offshore gas project.
The project will feature the construction of a new platform – bpTT’s 15th offshore production facility – 60 kilometres off the south-east coast of Trinidad in water-depth of approximately 65 metres.
The development will include four wells and will have a production capacity of approximately 600 million standard cubic feet of gas a day (mmscfd). Gas from Angelin will flow to the Serrette platform hub via a new 21 kilometre pipeline.
Drilling is due to commence in Q3 2018 and first gas from the facility is expected in 1Q 2019.
BPTT Regional President Norman Christie said: “We are pleased to be able to announce the sanction of the Angelin project which was made possible due to the execution of a new gas sales contract with the National Gas Company. Successful completion of these negotiations was important not only to the sanction of Angelin but will also underpin a further US$5-$6 billion in potential future investments over the next five years. These investments are important to increasing indigenous national gas production and bringing more stability to gas supply to the downstream and Atlantic.”
Christie also thanked NGC for its role in facilitating the negotiations: “I would like to recognize NGC for the spirit of cooperation they brought to the negotiating table and working to ensure that the new agreement would benefit the entire gas value chain.”
Angelin was originally discovered by the El Diablo well in 1995 and appraised by the La Novia well in 2006.
(LGO Energy plc, 4.Jan.2017) – LGO Energy plc provided a further update on its plans to recommence production drilling at the Goudron Field in Trinidad following its announcement of December 21, 2016.
The company’s local operating subsidiary, Goudron E&P Limited (GEPL), received approval from the Petroleum Company of Trinidad and Tobago (Petrotrin) and the Ministry of Energy and Energy Industries (MEEI) for the first of its planned Mayaro Sandstone infill wells, currently designated H18E G11(5). That well will be drilled vertically to a total depth of 1,250 feet and is expected to intersect the Mayaro Sandstone oil pay between 650 and 1,050 feet.
GEPL has awarded a drilling contract to Trinidad specialist drilling contractor Sadhna Petroleum Services Company Limited for the drilling for two firm and a number of optional wells on a turnkey drilling basis using a small footprint conventional (rotary table) drilling rig. Site preparation will be conducted by Sadhna and will commence as soon as practical, after which rig mobilisation and drilling are anticipated to commence without delay. Individual wells are expected to take about 14 days to drill and complete for immediate production.
LGO has engaged Bedrock Drilling Limited, a UK based specialist drilling engineering company, to provide drilling engineering supervisory support to the drilling program. Bedrock will provide a site supervisory team during drilling and additional engineering and advisory support to GEPL.
Permission to drill the second Mayaro Sandstone infill well in the program, designated H18E N4, was sought from Petrotrin and the MEEI in December 2016 and approval is expected to be received shortly after which site preparation is expected to commence immediately following the site work at H18E G11(5).
GEPL has outline approval for up to 45 new wells in the Goudron Field and a program of up to 70 infill production wells to the field-wide Mayaro Sandstone oil pay is contemplated, commencing with the current initial well program which will be expanded based on results and the availability of funding.
The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director for LGO Energy plc, who has over 38 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers (SPE), an Active Member of the American Association of Petroleum Geologists (AAPG) and is a Fellow of the Geological Society of London (BGS).
(Energy Analytics Institute, Pietro D. Pitts, 23.May.2016) – Venezuela’s President Nicolas Maduro and Trinidad and Tobago’s Prime Minister Keith Rowley were both present during an energy-related signing ceremony in Port of Spain between the two countries.
Trinidad’s Minister of Energy and Energy Industries Nicole Olivierre signed the agreements for her country while Venezuela’s Oil Minister Eulogio Del Pino signed on behalf of Venezuela, reported PDVSA in an official statement on its website.
The first agreement relates to a Functional and Governability Structure for the Loran-Manatee maritime gas field, including evaluation, development, exploitation, production and disposition of hydrocarbons.
The second agreement relates to a Memorandum of Understanding (MOU) between both countries revolved around technical and commercial studies related to the supply of Venezuelan natural gas located in the north and south eastern offshore platform regions of the OPEC member country to its Caribbean neighbor Trinidad and Tobago. The MOU also includes details related to the evaluation of a development feasibility study related to the interconnection of gas between Venezuela and Trinidad and Tobago.
During the meeting, Maduro also announced creation of a $50 million credit fund that would allow Venezuela to acquire foodstuff from Trinidad and Tobago.
Venezuela – the OPEC member country with the world’s largest crude oil and eighth largest natural gas reserves, according to the BP Statistical Review of World Energy – continues to reel in an economic crisis brought about by currency and price controls, widespread corruption and mismanagement of resources generated by its oil sector which produces 95 percent of the country’s dollar export earnings.
Besides bilateral issues, the countries also discussed matters related to drug and security issues, among others.