Trinidad and Tobago receives bids on offshore blocks

Curtis Williams
OGJ Correspondent

PORT OF SPAIN, Mar. 1 -- Trinidad and Tobago received five bids on three blocks in its Deep Water Atlantic Bid Round, which closed Feb. 18.

BP PLC was the sole bidder on Block 14. Three entities bid on Block 23(a): BP PLC, Niko Resources Ltd., and a consortium of BHP Billiton, Repsol-YPF SA, and Total SA. A consortium of BHP and Repsol-YPF was the only bidder for Block 23(b).

The twin-island nation’s Minister of Energy and Energy Affairs Carolyn Seepersad-Bachan noted that while 11 blocks were put up for bid, it was not surprising that companies opted for the blocks that they felt were more prospective.

“You will recall that we instituted a nomination process asking companies to nominate blocks for the bid round. On the basis of this we chose to offer a wide range of blocks to cover every eventuality,” the energy minister said. “In taking this approach, we offered many more blocks than we would usually do and we recognize no matter how many blocks we offer, companies always cluster around what they perceive to be among the most prospective,” she said.

Seepersad-Bachan said more than two thirds of Trinidad and Tobago’s acreage has not yet been explored. Most of this acreage lies in the deep water and is frontier acreage, carrying significant risks but high rewards.

She said for this reason, the country reformed its fiscal regime to allow companies the flexibility to arrange their exploration programs to reduce some of this risk. She explained, “Therefore in what is perceived to be the less-prospective blocks, companies may bid a seismic option only. And in the more prospective blocks, the number of wells in the obligatory phase may vary. We have also opted for an open biddable profit-sharing matrix, no signature bonus or carried participation.”

However the minister said there were minimum benchmarks for bids and the ministry will not accept bids below this threshold.

She said recent studies have gone a long way in establishing the prospectivity of the deepwater acreage. “The studies have shown that there are significant resources in the deep water, in the billion barrel region, and as with Brazil, the early adopters will benefit.”

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