• SENATOR THE HONOURABLE CONRAD ENILL


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  • FileName: Petrotrin_Signing_Ceremony.pdf
    • Abstract: SENATOR THE HONOURABLE CONRAD ENILLMINISTER OF ENERGY AND ENERGYINDUSTRIESADDRESS AT THE PETROTRIN SIGNINGCEREMONYWednesday 28th October 2009 at8:30 a.m. at the Hyatt Regency1|Page SALUTATIONS

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SENATOR THE HONOURABLE CONRAD ENILL
MINISTER OF ENERGY AND ENERGY
INDUSTRIES
ADDRESS AT THE PETROTRIN SIGNING
CEREMONY
Wednesday 28th October 2009 at
8:30 a.m. at the Hyatt Regency
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SALUTATIONS
Thank you Mr. Sookdeo Heeralal, Chair of
this morning's proceedings
Richard Oliver, Acting Permanent Secretary
Ministry of Energy and Energy Industries
Dr. Malcolm Jones, chairman and other
members of the Board of Directors of
Petrotrin
Mr. Ken Allum, President and other
members of the Executive Leadership of
Petrotrin
Executives and Senior Managament of the
successful companies to be awarded
licenses for the onshore Eastern Blocks
Members of the media
Ladies and Gentlemen
Good morning.
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I am pleased to be able to join with you in
this event, today as we continue with the
development of the energy sector based on
the policy of the Government of Trinidad
and Tobago.
Vision 2020 as it relates to the energy
sector and in particular the Ministry of
Energy and Energy Industries requires us to
continue with an agenda which supports our
work program. Our five development
objectives require the Ministry to pursue a
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series of actions designed to achieve the
following:
1. Innovative People
• Scholarships for National of
Trinidad and Tobago and in
petroleum and hydrocarbon
studies designed to create our new
scholars
• Support to UTT with its focus on
specific industry related
competencies required for an
evolving world.
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2. Competitive Business
• Competitive Bidding Rounds
• Review of fiscal terms
• Review of contractual
arrangements
• New added value gas-based
industries
3. Caring Society
• Community Development
• Relocation/compensation plans for
residents in energy development
areas
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4. Infrastructure & Environment
• New Industrial Ports
• New Industrial Estates
• Additions to Pipeline Network
• Upgrade of Service Stations
• Renewable Energy
And;
5. Governing Effectively
• Ministry of Energy Transformation
and;
• Examination of potential for a
National Integrated Energy
Company
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Popular wisdom has it that Trinidad and
Tobago is now a gas economy (we saw gas
production overtake oil in the mid 1960s).
Forecasts are, that on a do nothing basis,
the country’s oil production will decline to
less than 80,000 barrels of oil per day by
the year 2020. Our current production today
converted to barrel of oil equivalent put us in
a one to eight relationship. Our aim is to
address this imbalance and of course
Petrotrin has an important role to play in this
agenda.
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We had recognised, I am advised for some
time that referring to the southern basin as a
mature petroleum province was if not
inappropriate, misguided. While it is true
that the first commercial production
occurred in 1908, the basin has been
largely under- explored and under -
exploited. In 2004, recognising the need for
stimulation of exploration in the southern
basin onshore Trinidad, the Ministry of
Energy undertook a process of lease
regularisation. This measure allowed for
security of tenure, thus encouraging
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investment. Petrotrin was awarded new
licenses for their core productive acreage
and the remaining land area in the southern
basin was offered in a round of Competitive
Bidding.
The result of this initiative has been
increased gas and condensate production in
the jointly operated Central Block
(BGTT/Petrotrin). Exploration has begun in
all of the areas awarded and with respect to
the onshore blocks, companies are
extremely optimistic based on the data that
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has been acquired. It is expected once
successful in these exploration efforts, our
oil production would be improved in the very
short term.
In support of our producers, the
Government in consultation with the
industry has proposed a new fiscal system
with the aim of making it economic to
explore for and exploit smaller field sizes
and tail end production by revising the SPT
in such a way that the lives of fields are
extended and nothing is left stranded in the
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ground. Incentives for Enhanced Recovery
Schemes – Carbon Dioxide and Steam
Injection are also provided as part of the
new dispensation. These terms are of
course currently being further explained to
all our partners who will be impacted by
these measures so that we may have
mutual success.
In looking at the future of the industry, our
plans are for the long term.
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Since 2002, the Ministry has progressively
sought to acquire enhanced data over
marine areas. We in partnership with the
industry acquired a large 2D data set in the
area known as the Trinidad and Tobago
Deep Atlantic and ION Geophysical then
known as GXTechnology acquired, on a
speculative basis a regional deep imaging
2D data set. Together these data sets
formed the basis of the first deep water bid
round. The round did not achieve the
results that we expected and since the
blocks were last offered in 2006, we took
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the opportunity to do a focused technical
data collection and studies to high-grade the
area.
We have acquired data in the North Coast
Marine Area, in the area known as the
Tobago Trough and some infill data on the
south east coast area in the deep Atlantic
area. We have also conducted a scientific
study in the deep Atlantic to better
understand the geology and we propose to
conduct shortly a speculative seismic
reprocessing of the 12,000 line kilometres of
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2D seismic data acquired by the Ministry in
the area and a speculative Electromagnetic
survey. The results to date have been very
positive as our investigations recognize the
potential for large, structures and thick
continuous reservoirs with the potential to
produce large volumes. We are therefore
very optimistic about a large oil and gas
resource base in the deeper-water area.
After two years we are nearing the
completion of a legal and fiscal review
intended to revise the current tax structure
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for oil and gas operations and streamline
the promotion, evaluation and award of
open acreage.
Let us now turn our attention to this
morning’s event. We are here today to sign
a number of sub-licences for the blocks
located in the Guayaguayare area of
Trinidad and Tobago. It is interesting to note
that companies have retained an interest in
Guayaguayare as it was in 1870, oil was
discovered by a huntsman in the
Guayaguayare forest. A report on the
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finding went to London, but nothing became
of this until a Canadian merchant, Randolph
Rust, with the backing of the Oil Exploration
Syndicate of Canada took advantage of the
findings in 1901. Oil was first struck from the
ground in 1902 on the banks of the Pilot
River. History tells us that the story of
Guayaguayare will be told well into the
future.
Petrotrin originally operated fifty - four state
licences in the Southern Basin of Trinidad.
These licences were difficult to administer
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administratively and to explore and exploit
effectively. The Government reduced the
number of licences operated by Petrotrin to
six over their core productive areas. These
include Fyzabad, Forest Reserve,
PaloSeco, Penal/Barrackpore, Catshill,
Guayaguayare/Moruga West fields.
Petrotrin was then given a mandate to
optimize production from these areas. This
activity this morning is the first phase in the
realization of this strategy.
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We are in this process selecting E&P
players and approaches to properly
evaluate discover and extract maximum
value from the sector. While the more
obvious efforts have been concentrated on
inviting companies to explore in Greenfield
areas, the less obvious has also been
engaging our attention. Petrotrin through its
land and Trinmar assets controls about 75%
of Trinidad and Tobago’s oil reserves.
These reserves I am advised are within
easy reach and with oil production on the
decline as I said earlier, Petrotrin has the
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ability to increase oil production in the short
to medium term.
In the medium term, the GORTT will be
offering seven shallow to average water-
depth, marine blocks for competitive
bidding. Our evaluation indicates that the
blocks are likely to be gas prone and has
the potential to substantially increase our
gas reserves. The Competitive Bidding
Order has been drafted and it is expected
that the tender will be opened on or before
the end of December.
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This exploration thrust will be sustained in
2010 with the offer of blocks in the Trinidad
and Tobago Deep Atlantic Area and the call
for bids would be made at the start of the
second fiscal quarter of 2010.
We wish to congratulate Petrotrin on its
success in attracting bids to its offer and we
look forward to a significant increase in
activity and oil production in an area that is
currently so full of promise. I thank you.
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