Nestled in the southernmost Caribbean lies Trinidad and Tobago, a 5,130-square-kilometer twin-island republic, famous for its colorful Carnival celebrations, melodious steelpan drums, picturesque beaches and savory street foods.
Trinidad and Tobago is known also for its longstanding presence in the energy sector, which is the primary economic driver for the country’s population of 1.4 million.
Stuart Young, minister of energy and energy industries and minister in the Office of the Prime Minister, recognized the importance of the hydrocarbon sector in his address to the Trinidad and Tobago Energy Conference on in June this year.
“The importance of our oil and gas industry cannot be understated. The industry has been the main driver of the country’s social and economic development, accounting for an estimated 32 percent of our GDP,” he said.
“The upstream sector is dominated by natural gas, with production averaging around 440,000 barrels of oil equivalent per day, compared to approximately 60,000 barrels a day for crude oil. Our hydrocarbons have provided us with much developmentally in the past decades since our independence and we must not allow ourselves to ignore or forget this,” he added.
A History of Hydrocarbon Exploration
Trinidad and Tobago is a prolific hydrocarbon province and has been an active oil and gas producer for 164 years.
The Ministry of Energy and Energy Industries reports more than 13,000 wells drilled since exploration commenced, with cumulative production surpassing 3.5 billion barrels of oil and 12 trillion cubic feet of gas.
Current crude oil production stands at approximately 60,000 barrels per day and natural gas production at 2.58 billion cubic feet per day. The country’s unrisked recoverable reserves for natural gas are estimated at 23.3 trillion cubic feet and unrisked proved reserves of crude oil and condensate are 257 million barrels.
Since Young took office in April 2021, the MEEI has fast-tracked exploration activity, hosting consecutive competitive bidding rounds designed to attract both onshore and offshore operators.
T and T’s latest Deep Water Competitive Bidding Round launched in December 2021 and closed in June 2022. During the 2021-22 Round, a consortium of BP Exploration Operating Company Limited and BG International Limited, a subsidiary of Royal Dutch Shell, bid on four blocks: 23(b), 25(a), 25(b) and 27.
The Ministry will announce bidding round results in September 2022.
Onshore and Nearshore
After a successful deepwater round, MEEI launched its 2022 Onshore and Nearshore Competitive Bidding Round on July 8. The bidding round, open until Jan. 9, 2023, offers 11 blocks located in central to southern onshore areas of Trinidad and off the country’s southern coast.
T and T’s last onshore competitive bidding round, held 2013, led to the successful award of all three blocks offered. The exploration of the licenses granted led to seven wells being drilled, uncovering a total of one trillion cubic feet of gas and 241 million barrels of oil onshore Trinidad.
Kimberlee London, senior geologist at the MEEI, described Trinidad’s onshore basins as a mature hydrocarbon province, with a wide diversity of plays, including Pleistocene to Cretaceous reservoirs ranging from deltaic and estuarine sands to deep water sands.
She noted that the varied acreage being offered will be attractive to a wide range of companies and provide exciting new exploration opportunities.
“Though shallow plays have been explored extensively, the deeper plays remain relatively untouched, with their potential waiting to be unlocked,” London said. “The energy sector in Trinidad has been buzzing with interest since the launch of this bid round, and the Ministry anticipates another successful close in January 2023.”
With the current bid round in full swing, the MEEI is planning for the next item on the agenda, a Shallow Water Competitive Bidding Round to be launched in the fourth quarter of 2022.
MEEI Permanent Secretary Penelope Bradshaw-Niles said the Ministry is considering more than 20 open blocks across the Columbus Basin, Gulf of Paria and North and South Coasts for inclusion in the shallow water round.
“T and T’s shallow water reservoirs have proven thermogenic and biogenic gas and oil, within Plio-Pleistocene to Oligo-Miocene clastic reservoirs with favorable reservoir properties,” she said. “Despite its maturity, the province needs further exploration activity to achieve its true commercial potential.”
Energy companies have a variety of exploration and development underway in shallow water acreage, including Shell’s Colibri development on T and T’s North coast and Barracuda project on the East coast.
Other activities on the East coast include BP Trinidad and Tobago’s Cassia Compression, Matapal and Cypre projects and Woodside Energy’s Ruby development.
Incentives for investors
Bradshaw-Niles noted that bid rounds are part a multifaceted strategy designed to attract investment to Trinidad and Tobago.
“Reflecting on the outcomes of T and T’s last Shallow Water Competitive Bid Round in 2018, the Ministry embarked on a mission to review and relax some of its fiscal and taxation regimes as an incentive for current and future investors,” she said.
“Trinidad and Tobago offers fiscal stability with the provision of a ring-fenced production-sharing contract, offering cost recovery up to 80 percent, and a biddable ‘Minister’s share of profit petroleum,’ in which the Minister pays royalties and other taxes on behalf of the contractor,” she added.
The Ministry also offers incentivized opportunities for companies to invest in CCS and EOR projects as they advance to create more sustainable energy sources.
“All these strategies help us to fulfill the Ministry’s mandate to promote the sustainable development of the country’s natural resources,” she said.
Minister Young also addressed sustainable development and the energy transition during his speech at the Trinidad and Tobago Energy Conference.
“Trinidad and Tobago has to find the right balance. We will do our part towards reduction of carbon, methane and harmful emission reduction. But we will do so while ensuring the sustainability of our energy sector. I want to put on the record that being a hydrocarbon province should not be seen as a negative. We have been blessed with oil and gas resources and our challenge is how to ensure its sustainability whilst doing our part towards cleaner energy,” he said.
“A key imperative of Trinidad and Tobago’s transition strategy is that our citizens continue to benefit from economic returns from our natural energy resources as we scale the incorporation of sustainable sources into our energy mix. In this regard, we will continue to engage all upstream stakeholders for the exploitation in the shortest time frame all sanctioned and unsanctioned projects and prospective resources in the country.”
Young noted that MEEI’s promotional efforts will extend beyond bid rounds and fiscal incentives announced this year.
“Beyond 2022 there is a bank of upstream gas projects on land and in the shallow and moderate areas,” he said.
Partnership with AAPG
MEEI’s plan to promote acreage in Trinidad and Tobago involves participation in a variety of regional and global events, including those organized by AAPG.
“We share a strong longstanding relationship with the AAPG, as we have participated and benefitted from the networking opportunities and engaging technical sessions and short courses over the past decade,” Bradshaw-Niles said. “AAPG events offer the country an opportunity to highlight and promote our acreage while forming new regional and global partnerships.”
Ministry representatives will travel to Houston for the AAPG and Society of Exploration Geophysicists’ International Meeting for Applied Geoscience and Energy in Houston this month.
Trinidad and Tobago will have a stand at the International Pavilion, where MEEI officials will present on current and upcoming competitive bidding rounds.
“Our participation at IMAGE 2022 represents a great opportunity to showcase our acreage and attract investors while building a strong network for future business opportunities in the country,” Bradshaw-Niles said.