Transcript Slide 1

Trinidad and Tobago Hydrocarbon
Development ProcessOLADE First Latin American and Caribbean Oil and
Gas Workshop, Quito
Penelope Bradshaw-Niles
July 13, 2011
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
Contents
• Trinidad and Tobago- Overview of Energy
Sector
• Country Hydrocarbon Objectives
• Petroleum Legislative Framework
• Bid Round Procedures
2
Trinidad and Tobago Strategic Location
Latitude 10 1/2°N, Longitude 61 1/2° W
Population - 1.3M
Labor Force - 0.5M
Literacy Rate - 88%
LOCATION
Northeast of Venezuela
Southernmost of Caribbean
Total Area – 1,820 sq. miles
Overview of Energy Sector
Petroleum Industry - Highlights
•1954
Offshore
• 1867First
First
Well
Well
Drilled
•1969
Coast
• 1908East
Commercial
Discovery
Oil Production
The Energy Sector:
• 3% of global energy business
• Energy sector employment - 6%
1974 First PSC
1998 Deep Water
1996
Model PSC
Blocks
Trinidad & Tobago’s
Oil and Gas Fields
Caribbean Sea
CHACONIA
Iris
Poinsettia
Orchid
Poinsettia-SW
Dragón
TOBAGO
HIBISCUS
Mejillones/
Patao
Atlantic Ocean
G
Atlantic LN
e
gas pipelin
Dragon's Mouth
PORT-OF-SPAIN
Angostura
TRINIDAD
6"
Frederick
16"
Gulf of
Paria
Arima
Cocorite
Longdenville
Point Lisas
BRIGHTON
MARINE
Point FortinAtlantic LNG Plant
Phoenix Park
Pointe-a-Pierre
BALATA
Starfish
OSPREY
36
San Fernando
"
36" to
LNG
FOREST
RESERVE
Serpent
BARRACKPORE/
PENAL
30
"
24 "
POUI
BEACH
Galeota
Point
's Mouth
DOLPHIN
24"
24 "
30 PELICAN
40"
"
to L
NG
48"
B
gas om
pip bax
e lin
e
KISKADEE
MAHOGANY
IMMORTELLE
CASSIA
Coralita
10
"
0
20
Km
40
Cocuina
Loran
KAPOK
VENEZUELA
Manakin
oL
NG
PALO
SECO
GOUDRON
"t
GRANDE
RAVINE
16"
40
24"
SOLDADO
FIELDS
Dolphin Deep
TEAK
MORA
Tajali
T&T Gas Reserves
(TCF)
(TCF)
(TCF)
1993
1996
2005
(TCF)
2009
Proved Reserves
8.2
12.3
18.8
14.4
Probable Reserves
4.6
3.7
9.0
7.8
Possible Reserves
1.1
2.0
7.1
5.9
Total
13.9
18.0
34.9
28.1
Identified
Exploratory Resources
25.9 Tcf
**Based on Revised Audit by Ryder Scott Co. – January 1 2010
7
Historical Hydrocarbon Production
Country Objectives
 Effective and optimal monetizing of the natural resources
 Security of country’s energy supplies
 Protection and preservation of the environment
 Establishment of research initiative
 Training and development of nationals
9
What does Trinidad Offer?
 Substantial petroleum reserve base
 Competitive gas pricing regime
 Equitable taxation system
 Strategically located in the Atlantic Basin with strong markets
close by
 Highly skilled labor force
 Well developed land and harbor infrastructure
10
Government’s Decision-Making Model
The Cabinet of
Government of the Republic of Trinidad and Tobago
Standing Committee on Energy
Chairman: Prime Minister
Ministry of Energy & Energy Affairs
State Enterprises
Petrotrin
National Gas Company
National Energy Corporation
Legislative Framework
Petroleum Legislation
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• The Petroleum Industry is governed principally by
(i) the Petroleum Act (1969),and its
amendments, the Regulations (1970) , and
(ii) the Petroleum Taxes Act (1974).
• The Petroleum Act establishes a framework for the
grant of licenses/contracts for the conduct of
petroleum operations.
Legislative Framework
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• The Minister is responsible for determining areas to be made
available for petroleum operations.
• He/She may elect to invite applications for the rights to explore
and produce hydrocarbons
• Competitive Bidding Process is the preferred option:
• The element of Competition
• Transparency of process
– Policy has been in existence since 1987 and no change is
contemplated
Legislative Framework
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• The following type of licences/contracts may be
issued by the Minister :
- An Exploration Licence grants a non-exclusive right to
carry out petroleum operations
- An Exploration and Production Licence grants an
exclusive right to explore for, produce and dispose of
petroleum
- A Production Sharing Contract grants the contractor the
right to conduct petroleum operations within the
prescribed contract area.
Government’s Policy
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Pre 1995 – few PSCs
• Post 1995, the Government’s policy has been
to issue Production Sharing Contracts for the
conduct of Petroleum Exploration.
• This does not preclude the option of utilising
the licensing regime
PSC Highlights
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Phased exploration period
• 9 years for deep water
• 6 years for shallow and average water depths
• Biddable minimum exploration programme.
• Term of Contract
• 25 years for shallow
• 30 years for deep water.
• Flexible relinquishment provisions tied to the
phased exploration work programme.
• Exploration acreage can be retained
PSC Gas Provisions
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Attractive Gas Provisions
– A prescribed natural gas market development
phase of up to five (5) years – seven (7) years
deep water.
• Extension of the term of the contract,
• subject to the execution of a gas sales contract for a period
which will allow for the supply of natural gas under the
terms of the gas sales contract.
Competitive Bidding Process
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Technical review of open acreage
• Nomination process
• Blocks to be offered chosen based on nominations and
T&T’s strategic interests.
• Recommendations made to Cabinet on the areas to be
offered and the terms and conditions of the bid.
There is a prequalification process for the right to be operator.
It can be done at any time and lasts three years
Summary Tender Form for 2010 Bid Rounds (1)
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
TERM OF CONTRACT
Shallow Water/Deep Water
1st Phase
- seismic option – 2/3 years
1st Phase
- seismic and exploration drilling
- seismic and 1 well – 3/41/2 years
- seismic and 2 wells – 4/6 years
- seismic and 3 wells – 5 years
2nd Phase
- exploration drilling
3rd Phase
- exploration drilling
Drilling of exploration wells is a requirement in the second and third phases
of the exploration period.
Summary Tender Form for 2010 Bid Round (2)
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
MINIMUM WORK PROGRAMME
(US$1MN equivalent to one work unit)
Geophysical
SEISMIC
3D Seismic
Other Geophysical
Geological Studies
Drilling:
WORK UNITS
Wells
_____________
SIGNATURE BONUS
Depth
____________
____________
US$_____________
Profit Share Matrices
Natural Gas
Crude Oil
Price
A
B
<
$50.00 $50.00 $75.00
C
D
$75.00 > $100.00
$100.00
MBOPD
%
Price
A
< $4.00
B
C
$4.00 - $6.50 $6.50 $9.00
MMCFD
D
> $9.00
%
< 200
X
X
X
X
200 - 350
X
X
X
X
< 75
X
X
X
X
75 - 100
X
X
X
X
350 - 500
X
X
X
X
100 - 150
X
X
X
X
500 - 750
X
X
X
X
150 – 200
X
X
X
X
750 – 1,000
X
X
X
X
> 200
X
X
X
X
> 1,000
X
X
X
X
Windfall Feature:
BR + 70%*[(P – US$100.00) / P]*(1BR)
Where:
BR is the base rate at Column D
P is the market price
Windfall Feature:
BR + 70%*[(P – US$9.00) / P]*(1-BR)
Where:
BR is the base rate at Column D
P is the market price
Cost Recovery: 60%
Example of Bid Evaluation Criteria
Each Element of the bid attracts a certain number of points
Geophysical
Seismic
3Dseismic
30pts
20pts
Other Geophysical
10pts
2D seismic,Gravity, Magnetics etc
Geological Studies
Bidders are asked to provide details of named studies
proposed and illustrate their value in contributing to
improving the understanding of the petroleum system.
Drilling
Wells - Depth
70pts
The work programme is totally self assessable
Bid Evaluation Criteria
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Sharing of Production –
100pts
– Minister’s Share of Profit Oil– Minister’s Share of Profit Gas -
50pts
50pts
• Signature Bonus (where applicable)
– one point per million dollars (open ended)
•
Currently being utilised as a tie breaker in the
deep water
•
All other bonuses contributions are no longer
biddable
Bid Evaluation
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Evaluation of bids and announcement of results within a
two months from the date of bid submission.
• There are two Cabinet appointed committees which
perform the evaluations:
– A Technical Evaluation Committee comprised of staff of the
Ministry of Energy, Finance and the Attorney General.
– An Overview Committee chaired by the Permanent Secretary,
Ministry of Energy.
Evaluation cont’d
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• The Overview Committee makes recommendations
on the awardees to the Cabinet.
• Cabinet forwards the recommendations to the
Standing Committee of Energy
• Committee makes recommendations to Cabinet
• Cabinet then acts on the recommendations of the
SCE
Challenge
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
Control
– At the mercy of a dynamic/volatile global
environment
– To complete the process in the project time
frame - 9 months
– Not in control of the entire process
Results of the Last Two Bid
Rounds
Results
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
Shallow Water
• Production Sharing Contracts signed with four companies
–
–
–
–
NCMA 4 – Centrica
NCMA 2 – Niko/RWE DEA Ag
NCMA 3 – Voyager/Niko
Block 4(b) – Niko
Deep Water
• Three blocks received bids
– 23 (a) – BP, Niko, BHP/Total/Repsol
– 23(b) - BHPB/Repsol
– Block TTDAA 14 - BP
Upstream Activity
23(a)
Centrica
TTDAA 14
Niko/RWE
23(b)
Voyager/Niko
Niko
Trinidad and Tobago’s Experiences
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Mixed Experience - by and large successful
– Depends on the global environment (price, supply-demand,
energy security)
– Perceptions of prospectivity of the acreage
• Obligations contained in the CBO are varied to suit
the operating environment (carried participation)
– Fiscal incentives where necessary
• New fiscal regime for deep water enacted into
legislation
• Incentives built into the PSC
Achievements
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• 28 PSCs in various stages of their operations
• 20 (BP has 120 but will be counted as one) licences
in various stages
–
–
–
–
Productive oil and Gas areas
Acquisition of Seismic
Drilling
Deep Water round undertaken and bids received
• Should have deep water drilling soon
• Shallow Water and Land acreage being almost
exhausted
Future Developments: Upstream
Blocks for
nomination are
coloured light
blue.
There are
currently 36
deep water
blocks available.
Investment Opportunities via Bid rounds
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Current Focus is on Deep water
• Expected to climax in September, 2011 with the next
Competitive Bid Round
• Shallow water and land acreage are not readily
available
• The MOE will be reviewing all remaining acreage
– Operators will not be encouraged to keep acreage
inactive
Other Avenues for Access to State Acreage
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Legislation allows for application to be made for
State acreage
– This would involve blocks less than 100sqkm
minimum size
– Where there is 1 interested party
– Company already has tenure and good
exploration /exploitation record
Other Activities
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Ongoing Licence Negotiations for Blocks in the
Western Offshore Gulf of Paria
– Pt Ligoure/ Brighton Marine/Guapo, East Brighton
• Will result in new exploration work programmes
• Seismic and wells
• Streamlining/optimisation of acreage
– Impending Data Policy important part of this thrust
Aspirations and Way Forward
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Complete the entire bid process in 9months
• Offer more deep water acreage
– Needs more technical work
• Vibrant industry focused on deep water
exploration and production and the optimisation
of production from shallow water and land areas
• Generation of business opportunities for all
companies providing services to the industry and
its spin-offs
Thank you
Legislation
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Petroleum Profits Tax reduced from 50% to
35%
• Uplift of 40% on capex for exploration drilling
• SPT of 18% up to US$90, >US$90 – 0.2% for
every dollar increase
• Royalty
Incentives in the PSC
THE GOVERNMENT OF
THE REPUBLIC OF
TRINIDAD AND TOBAGO
• Profit Share matrices opened
• Price and Production Bands widened
• Windfall profit feature
• Profit Shares and work programmes are biddable
• Abandonment Provision
•
Escrow Account from time of development
• Financial Obligations fixed in PSC
• Cost Recovery fixed at 60%
•
40