On Jan. 9, Trinidad and Tobago’s Ministry of Energy and Energy Industries concluded the 2022 Onshore and Nearshore Competitive Bid Round.
This bid round, launched on July 8 last year, featured a total of 11 blocks covering more than 115,000 hectares. Blocks offered included Aripero, Buenos Ayres, Charuma, Cipero, Cory D, Cory F, Guayaguayare, South West Peninsula Onshore, St. Mary’s and Tulsa, located in the central to southern onshore Trinidad; and the South West Peninsula Offshore, located off the southern coast of Trinidad.
Xavier Moonan, president-elect of AAPG’s Latin America and Caribbean Region and exploration manager of Touchstone Exploration Inc., follows the bid rounds closely.
“Blocks in the bid rounds are located in the Southern Basin of Trinidad, where in combination with the eastern offshore extensional Columbus Basin, approximately 13,000 wells have been drilled and produced 3.5 BBO and 12 TCF of gas to-date,” he said. “The Columbus Basin will be featured in a shallow water bid round anticipated to be launched later in 2023.”
Moonan explained how the ministry organized the bid rounds.
“MEEI provided a draft Exploration and Production license for review, and interested bidders were required to purchase an extensive data package for $30,000 (US),” he said. “Bids are to be evaluated based on a point system towards the proposed minimum work program, which may entail acquisition and or reprocessing of seismic data sets, geological studies, committed drilling footage and a signature bonus.”
State-owned oil company Heritage Petroleum received a participating interest of 10 to 20 percent in each block, with the rest of the interest awarded to winning bidders.
Moonan noted that the MEEI received sixteen bids for eight of the eleven blocks offered.
“The St. Mary’s Block drew the most attention, with bids from A&V Oil and Gas Limited, Decker Petroleum and Marketing Company Limited, Hunter Resources Corporation and Primera Oil and Gas Limited, a subsidiary of Touchstone Exploration,” he said.
The Guayaguayare Block received bids from Eco Oil and Gas Solutions Limited, Challenger Energy Group and Primera Oil and Gas Limited. Both Tulsa and Cipero Blocks were bid on by Eco Oil and Gas Solutions Limited and Primera Oil and Gas Limited. Buenos Ayres received bids from Hunter Resources Corporation and Trinity Exploration and Production T&T Limited.
The Southwest Peninsula (Onshore), Charuma and Aripero Blocks received one bid each from Hunter Resources Corporation, Primera Oil and Gas Limited and NABI Construction respectively.”
Impact and Benefits for Trinidad and Tobago
Moonan is optimistic that the bid round will provide economic benefits for Trinidad and Tobago’s energy sector and for the country as a whole.
“As Trinidadian and as a geologist I’m very pleased with the interest drawn by the (bid round),” he said. “It is hopeful that this translates into awarding of licenses, facilitating an injection of capital into exploration efforts and putting these eight blocks back to work, under the microscope and under the drill bit, allowing the successful bidders to attempt to discover hydrocarbon, and commercialize resources.”
Moonan’s company, Touchstone Exploration, with headquarters in Canada and operations in Trinidad and Tobago, has participated in several of the country’s bid rounds.
“Touchstone Exploration who has had a string of successes since commencing exploration drilling in the onshore Ortoire Block in 2019, placed the most bids, a total of five, towards this 2022 Competitive Bid Round. In October 2022, Touchstone commenced production of gas from its 2019 Coho discovery flowing approximately 10 million standard cubic feet per day to a nearby gas facility operated by Shell Trinidad,” he said.
“Touchstone is expected to further bring online its 2019/2020 Cascadura liquids rich gas discovery at the end of Q1 2023 with rates up to 90 MMSCF/D and 2,200 barrels of oil per day into a three-phase separator gas facility expandable up to 200 MMSCF/D for future development drills,” he said.
Moonan has spent many years following the Trinidad and Tobago’s energy sector. Most blocks offered in the bid round have information available for companies interested in exploring there.
“Nine of the blocks are either completely covered or partially covered with 3-D seismic surveys, while the remaining two are covered in regional 2-D seismic data,” Moonan said. “Coincidentally, only two blocks – Cory D and Cory F – have not been tested by the drill bit historically.”
Some of the blocks were tested many years ago. Moonan studied Trinidad and Tobago oil industry publications and company press releases to conduct the analysis of the eight blocks awarded.
He published the following summary on his social media accounts:
- In Aripero, exploration efforts stem back to the 1920s, with the most recent well drilled by the National Mining Corporation in 1950, with total depth of 12,195 feet.
- Buenos Ayres was last explored with the drill bit in 1947, when United British Oilfields of Trinidad Limited drilled to 7,733 feet.
- In the Central Range, the western part of Charuma Block was last explored by Parex Resources Cribo and Mapepire wells in 2011, drilled to 6,000 feet and 8,260 feet, respectively. The eastern segment was last tested in 1958 by Dominion Oil Limited, who drilled to 5,008 feet.
- The Cipero Block immediately to the south was explored by Exxon in 1995, with St. Croix well drilled to a depth of 17,587 feet, the deepest onshore well to-date. Prior to this the block, it was drilled in 1962 by Shell. The Cipero Block borders the Ortoire Block, home to Touchstone Exploration’s Coho gas discovery in 2019.
- The largest block offered in the 2020 bid round, Guayaguayare, was last drilled in 1994 by Exxon at their Iguana River well to 12,762 feet. In 1991, Trintopec explored in vicinity of the Moruga East area, drilling down to 8,500 feet.
- Tulsa Block exploration efforts date back to the 1920s, with the most recent efforts by Shell in 1957 to 10,300 feet and Petrotrin’s Puzzle Island well in 1998 to 8,200 feet.
- The most highly contested block, with four bids, was St. Mary’s, last explored in 1969 by Texaco, who drilled down to 9,564 feet in the Morne Diablo area.
- The South West Peninsula Onshore Block was last drilled in 2008 by Trinidad Exploration and Development in 2008. The company drilled to 12,192 feet on the block, adjacent to the Challenger Energy oil discovery at Saffron in 2019
The Ministry stated that the award of the blocks to successful bidders will occur in April 2023.
For Javed Razack, AAPG Latin America and Caribbean Region delegate and president of the Geological Society of Trinidad and Tobago, awarding the blocks is just the first step.
“The goal of a bid round is to licence blocks with obligations that lead to drilling wells, which hopefully lead to discoveries that can be commercialized in a reasonable timeframe,” he said. “However, bid rounds have several stages that need to be managed carefully by the regulator, in this case, MEEI.”
Razack works as vice president of shared services at Ramps Logistics, a position that provides an up-close look at bid round awards and implementation in Guyana, Suriname, Mexico, Colombia, the United States and Trinidad and Tobago. He provided several recommendations for ensuring a successful completion to the 2023 bid round.
“The critical things the MEEI must pay attention to, and fast track to the best of their ability, if we are to say this round was successful,” he said, are as follow:
- A thorough but fast turnaround on bid evaluations, and announcing winner(s), if any – within three months is expected: Close attention must be paid to the operator’s financial capability to carry out the committed works. In the past, many operators have been unable to, resulting in failed contracts.
- Setting out reasonable time frames for minimum work obligations in the contract: If the obligations are not in line, the operators will fall short of their commitments and there will be significant delays, possibly cancellations of contracts.
- A short time frame between announcing winners and executing a final contract between the operator and the government (less than 3 months is desirable)
- Shepherding and fast-tracking approvals to conduct seismic surveys and/or drill wells: The MEEI should have a sit down with all the state agencies involved and outline a process for how they can all work together for this critical function. “In practice, dealing with T&T state agencies is one of the most tedious and difficult parts of doing business in the energy sector,” he said.
- Upon discoveries, a new phase is entered into to assess commercial viability and carry out the necessary works to produce first oil/gas. The state agencies again must be aligned to ensure timely execution.
- “If companies are not fulfilling their obligations without just cause, the MEEI should exercise its right enact penalties and take back blocks,” he said.
Razack said he will continue to watch the process along with other GSTT members and leaders.
“The GSTT is certainly excited about the interest shown in this bid round thus far, but we must remain cognisant of the challenges, and work together to get ahead of these, to ensure Trinidad’s upstream sector has a future on land,” he said.
Bid rounds and investment opportunities in Trinidad and Tobago are on the agenda at two upcoming AAPG events, the Geosciences Technology Workshop Caribbean 2023 in Barranquilla, Colombia, Feb. 8-9, and the AAPG Energy Opportunities Conference in Mexico City, March 22-23.
Moonan will serve as a co-chair and speaker at the at GTW Caribbean 2023: Recent Discoveries, Exploration Opportunities and Sustainable Development Strategies in Caribbean Basins, a technical event highlighting dedicated onshore and offshore exploration and development and energy transition initiatives in Trinidad and Tobago and Colombia. Learn more and see the program at https://aapg.to/caribbean2023.
Razack will join leaders from MEEI, National Energy of Trinidad and Tobago and renewable energy company Kenesjay Green at the Energy Opportunities Conference, an executive level event targeting decisionmakers, featuring executive plenaries, business-to-business sessions, and an exhibition, International Pavilion and New Technologies Showcase. Learn more at https://energyopportunities.info.
For information about the 2022 and 2023 bid rounds in Trinidad and Tobago see MEEI website, energy.gov.tt.