New Study: Trinidad & Tobago Oil & Gas Report Q2 2016
New Energy market report from Business Monitor International: "Trinidad & Tobago Oil & Gas Report Q2 2016"
[ClickPress, Fri Apr 01 2016] Shortages of natural gas are expected to persist at least until the start of the Juniper field in late 2017. These supply challenges will continue to disrupt gas exports and comes amid government concerns over the profitability of liquefied natural gas exports. The government has also called for operators to fully exploit existing acreage, suggesting the emergence of tensions between officials and upstream players. While a series of major wells are planned in 2016, investment has already been delayed due to the current market conditions, underscoring the impact of the current low oil price on the sector.
The main trends and developments in the Trinidad & Tobago (T&T) oil and gas sector are:
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Energy Minister Nicole Olivierre warned in January 2015 that the government was prepared to reclaim unutilised acreage licensed to operators. The minister reiterated a warning from several months earlier that companies need to ensure they carried out agreed upon work programmes or risk having acreage reclaimed by the government, which is seeking to sustain investment amid the decline in global oil and gas prices.
BHP Billiton confirmed in January it planned to drill as many as three deepwater wells on its acreage in the country during the year. If completed, it would mark the first time a deepwater well was drilled in Trinidad and Tobago. BP's local outfit also said it planned to drill a well targeting a prospect near the Juniper development in 2016. The planned drilling signals continued investment in the upstream sector despite the current market conditions, though some operators have confirmed plans to delay or defer investment in Trinidad and Tobago.
High decline rates for crude oil production and shortages of natural gas that have led to curtailments of supply underscore the challenges facing the upstream sector. Shortages of natural gas have proven especially troubling and disruptive to energy sector, affecting the country's LNG exports and creating challenges for the petrochemicals sector. Shortages are expected to persist until 2017 given the absence of new major upstream developments until BP's Juniper field comes online. There is continued concern however that supply challenges could persist beyond that date.
The energy ministry has signalled a possible shift in the country's approach to the LNG market. The government has said exports of LNG were no longer offered the best returns. The ministry suggested the government could revise its policy to reflect this, directing more of the country's gas to more profitable petrochemicals and other uses. Officials were also critical of commercial partners failure to share profits from gas sold to higher cost markets.
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