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Trinidad and Tobago Energy Sector Bidding 2010

Explore competitive bidding opportunities in gas and oil production. Learn about available areas, projected statistics, and contract terms.

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Trinidad and Tobago Energy Sector Bidding 2010

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  1. Competitive Bidding2010

  2. Outline of Talk • Introduction • Framework for Presentation • Gas • Bid round 2009/2010 • Areas Offered and Terms • Oil • Immediate to Short Term • Long term – Areas Offered and Terms

  3. Government’s of Trinidad and Tobago’s Focus • Sustainable development of the energy industry • Provision of a competitive framework for investment • Provision of gas for expansion of downstream industries • Rebalance oil and gas production • Enabling greater participation of nationals and national enterprises

  4. Gas Reserves and Resources (tcf) 1.1. 2007 1.1. 2008 1.1.2009 PROVED 17.05 16.997 15.374 POSSIBLE 6.23 7.883 8.451 PROBABLE 7.76 5.888 6.286 Total 31.04 30.768 30. 011 EXPL. RESOURCES: 37.09 31.25 29.64 A largely Static Picture

  5. Change the Static Picture – How? • Challenge for gas- Build up probable and possible reserves base to feed into proven • Gas, because of its nature, has no value unless a market exists for it • Companies will not explore for gas unless a market is available • The entire value chain is interwoven • Upstream E&P • Midstream transmission - pipeline, ?LNG • Downstream – Primary Refining • Downstream – Manufacturing • Provision of a market

  6. Projected Production Statistics 2017 Projected with Train X POWER GENERATION 7% SMALL CONSUMERS GAS PROCESSING LNG 'Train X' 1% 1% 13% METHANOL MANUFACTURE 10% Down Stream Methanol 4% REFINERY 1% Total 6042 MMscfd New Metals and Plastics 7% AMMONIA AND UREA MANUFACTURE 10% Down Stream Ammonia 4% Atlantic (LNG) 39%

  7. Gas Round

  8. Shallow and Average Water RoundAcreage Offered Blocks Offered NCMA 2 NCMA 4 NCMA 3 NCMA 5 4(b) North Marine 5(d)

  9. Shallow Water Block Descriptions (1) • North Marine Block -280 sq km • Located in very shallow water • Close to infrastructure • This block has the potential to be both oil and gas bearing • Block NCMA 2 - 1,019 sq km. • This block deservedly attracted three bids in the 2006 round and has identified potential over 1tcf of gas • Block NCMA 3 - 1,019 sq km. • Several anomalies have been identified, although the block poses more of an exploitation challenge

  10. Shallow Water Block Descriptions (2) • Block NCMA 4 - 1779 sq km. • This block has at least 300bcf of identified resources • the recent 2D speculative survey has identified some upside potential. • NCMA 5 - 2,311 sq km • This area lies north of the Angostura Field and holds promise for both oil and gas accumulations in Oligocene reservoirs.

  11. Average Water Depth Block Descriptions • Block 4(b) - 750 sq km • One well on the eastern edge of the block (Las Cuevas 1) encountered hydrocarbons. • Several structures mapped - >2tcf of gas in shallow structures and the possibility of more at depth • Block 5(d) - 684 sq km • Two wells in this block - El Nino-1 confirmed the presence of an active hydrocarbon system encountering gas-condensate sands, Sandpiper – gas bearing sands.

  12. Timing • Competitive Bid Order was signed by the Minister on 31st 2010 March • Will be published and gazetted to have legal effect • Bids are to be submitted by the first Wednesday four months after publication of the CBO • Announcement of awardees six months after publication of CBO

  13. Contained in Competitive Bidding Order Terms and Conditions

  14. Pre-bid Qualification Fee • US$ 50,000 for Blocks NCMA 3, NCMA 4 and NCMA 5 which shall entitle the bidder to bid on any or all of these blocks • US$40,000 to bid on Block NCMA 2, • US$40,000 to bid on Block 4(b), • US$40,000 to bid Block 5(d) • US$40,000 to bid on North Marine Block

  15. NCMA 2, 3, 4 and 5 and North Marine Block TERM OF CONTRACT 1st Phase - seismic option – 2years 1st Phase - seismic and exploration drilling seismic and 1 well – 3years seismic and 2wells – 4 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

  16. MINIMUM WORK PROGRAMME WORK UNITS (US$1MN equivalent to one work unit) Geophysical SEISMIC 3D Seismic ____________ Other Geophysical ____________ Geological Studies Drilling: Wells Depth _____________ SIGNATURE BONUS US$ _____________

  17. PSC Commercial TermsShallow and Average Water Depth • Conventional styled (non taxable) PSCs, for Shallow(400m), Average (400 -1000m) with the following features: • GORTT’s Share of Profit Petroleum are in lieu of taxes with exception of the payment of Withholding Taxes and Stamp Duty • Ring-fenced – There will be no consolidation • Profit Shares are biddable, matrices are open with no constraints to bidding (Production is incremental) • Financial Obligations are fixed in the Contract • Cost Recovery Limit is fixed at 50%, 55% for shallow and average respectively • Fair Market Value as defined in Petroleum Taxes Act is utilised for the pricing of gas

  18. Shallow Water: Profit Petroleum Share Matrices 20% Carried participation X represents the Governments Share of Profit Petroleum which is biddable • Windfall Feature: • BR + 70%*[(P – US$70.00) / P]*(1-BR) • Where: • BR is the base rate at Column D • P is the market price • Windfall Feature: • BR + 70%*[(P – US$6.00) / P]*(1-BR) • Where: • BR is the base rate at Column D • P is the market price • Cost Recovery: 50%

  19. Average Water: Profit Petroleum Share Matrices X represents the Governments Share of Profit Petroleum which is biddable No Carried Participation • Windfall Feature: • BR + 70%*[(P – US$80.00) / P]*(1-BR) • Where: • BR is the base rate at Column D • P is the market price • Windfall Feature: • BR + 70%*[(P – US$7.00) / P]*(1-BR) • Where: • BR is the base rate at Column D • P is the market price • Cost Recovery: 55%

  20. Evaluation Process

  21. Bid Evaluation • Two Biddable items • Bid not totally self assessable • Work Programme self assessable • Pts per ft for wells drilled included in the Bid Order • Government Share is biddable but not self assessable • Internal benchmark will be set

  22. 2010 Deep Water

  23. Deep Water Blocks • 39 blocks in water depths 1,000 – 3,500 metres • No decision has yet been made on the number of blocks to be offered • Blocks in the TTDAA can now be nominated • Prequalification criteria has been published • Operators must be prequalified • The document also asks for information on non-operators

  24. Deep Water Blocks Blocks available for Nomination

  25. Nomination Process • The Map indicates the blocks from which nominations are to be made (hatched area) • Companies will be required to submit a letter to the Minister naming the block nominated • All nominations will be treated as confidential commercial • Nomination is free • Nominations close May 7th, 2010 • Final determination of blocks will be made by MEEI

  26. Location of Leads Analysed (6) Depth Structure Maps Showing Lead Locations Lead NW Lead NE Lead 010 Lead 020 Lead 040 Lead 030

  27. Reserves Analysis for Leads Identified • Uncertainty Analysis (for each lead) • Estimate Reserves Size Distribution • Multi-zone Monte Carlo Simulation • Reservoir Size, Thickness, & Recovery Factors • (Ps) Chance of finding HC’s in at least one zone • Risked & Unrisked Reserves • Hydrocarbon Type – Oil, Gas, GOR, Cond Yield

  28. Reserves Identified

  29. Deep Water Exploration Commercial Terms • Conventional styled (non taxable) PSCs, with the following features: • GORTT’s Share of Profit Petroleum are inlieu of taxes with exception of the payment of Withholding Taxes and Stamp Duty • Ring-fenced – There will be no consolidation • Profit Shares are biddable, matrices will be open with no constraints to bidding (Production is incremental) • Financial Obligations are fixed in the Contract • Cost Recovery Limit fixed at 60% • No carried Participation • Fair Market Value as defined in Petroleum Taxes Act is utilised for the pricing of gas

  30. Deep Water: Profit Share Matrices Natural Gas X represents the Governments Share of Profit Petroleum which is biddable No carried participation • Windfall Feature: • BR + 70%*[(P – US$100.00) / P]*(1-BR) • 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%

  31. Schedule & Timing • Competitive Bid Order will be finalized and published by end July, 2010 • Bid offers are to be submitted by the first Wednesday four months from the date of publication of the CBO • Evaluation of bids – max 2mths • Announcement of successful bidders will be made six months after publication of CBO

  32. Thank You

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