Minister Eric A Williams announcement last week that
the oil-rich Southern Basin of Trinidad had been formally
divided into six areas and the bases of production
identified is a key element in his re-invigorated assault
on this 97-year-old hydrocarbon province.
He is clearly of the view that Trinidads land region,
which has yielded well over two billion barrels of oil since
production first began there, has been relatively neglected
in recent years but still has the potential to add to the
countrys total output of oiland perhaps even gas,
as the Central block has proved.
Favourable results are expected from exploratory drilling
shortly to take place in the Eastern block and we had hoped
to hear good news by now from Dr Krishna Persad about the
South West Peninsula block, where the Habanero exploratory
well was spudded in late January but, beyond that, there is
extensive acreage still left for further drilling activity.
Counting State company, Petrotrins designated core
area of around 154,400 acres, there is something like
670,000 acres of territory in the Southern Basin which is
regarded as potentially hydrocarbon-prone.
What the Energy Minister presumably means by establishing
the bases of production is making a formal determination
in the new licences of which he speaks of the exact depth
to which a licensees rights go, thus leaving the ministry
free to award drilling rights to companies for exploration
below that depth.
Even in Petrotrins core area, a company
in future may be granted the right to explore, say, below
18,000 feet, leaving all horizons above that as Petrotrins
This is a novel approach as far as Trinidad is concerned and
what it will do is open up opportunities for a large number
of different companies, or consortia, to undertake much more
exploratory work that has been the case in the past, where
an Exploration and Production (E and P) licence more or less
gave the holder access to hydrocarbon plays at whatever depths
he could find them.
Petrotrin itself might specifically wish do deals with joint
venture partners in its core area that targeted
deeper horizons where it perhaps did not have the budget to
explore on its own.
The Eastern block lease already enjoins operator Talisman
to drill two out of its three obligatory wells to deeper levels
in search of the elusive Cretaceous geological zone on land.
But making a distinction between shallow and deep rights would
not achieve much in the absence of geological information
and the licence re-organisation initiative is being supported
by Williams long-desired major 3D seismic survey over
the Southern Basin. This is likely to be tendered for in June
if all goes well, and is going to be far and away the costliest
exercise of its kind ever conducted either on or offshore
T&Ta figure of as high as US$300 million has been
Since that kind of expenditure is unlikely to be affordable
by any company on its own, the ministry expects a consortium
will be put together to fund it which, in turn, would have
the right to explore in deep and shallow areas afterwards.
By formally defining the depth to which a company can lay
claim to hydrocarbons, the ministry will be free to issue
licences that relate either to one of the other but probably
not to both.
If the consortium gets the chance to bid for both types of
licences, it will effectively squeeze any companyother
than those already in placeout of the running for exploration
acreage in future and the ministry will have to find some
way of avoiding thatafter all, the idea is the more
companies that are interested in T&T, the merrier.
Leaving expensive deep drilling to the majors which can afford
it is one thing but presumably the ministry will want to attract
medium-sized and small companies to join the fray as wellincluding
medium- sized and small local companies.
Or perhaps the thinking may be to confine them to alliances
with Petrotrin in the area to be left in its hands which will
also benefit from the result of the 3D shoot. We shall see.
Petrotrin will be up to its ears in reserves development commitments
as this bold exercise proceeds because it will also be entitled
to a 20 per cent interest in any development of hydrocarbons
that proceeds from the 3D seismic and exploration effort outside
of its own core area.
This will theoretically include any development of oil or
gas at deeper levels, so Malcolm Jones and Wayne Bertrand
would be well advised to start looking around for large sums
of money from now.
You might think that the shallower horizons of south Trinidad
had been so extensively drilled-up over the years that the
likelihood of new oil would be slim.
Apparently, not so. According to Minister Williams, traditionally,
mature areas can yield at least ten per cent new reserves
when 3D seismic data is applied.
The deeper areas should produce much more since they have
largely been unexplored over the years.
Integrated 3D data is clearly regarded by the ministry as
the key to squeezing the last drop of commercially recoverable
oil and gas out of the Southern Basin.
There are blocks which have already had 3D seismic shot over
them in recent yearsnotably the Central block, the Eastern
block and the South West Peninsula block.
The Moruga West block, which is in the hands of Neal and Massy
Energy Resources, is due for 3D anytime now.
But the basin-wide effort is expected to go one better and
give all concerned the big picture of what might
really lie under the earth in south Trinidad.
As energy ministry senior geologist Helena Inniss-King points
out: The areas surveyed by individual companies were
too small to really benefit from the use of 3D technology.
You had very short lines and it was not possible to image
the structures at depth properly.
The mammoth 3D effort envisaged will rectify that weakness
and, who knows? Lead to a whole new life for a basin that
was the mainstay of the T&T oil industry until first Soldado
in the Gulf and then the East Coast Marine Area (ECMA) opened
up in the 50s and early 70s, respectively.