BMI View: Confirmation that authorities plan a new upstream bidding round by early 2016 reinforces the positive outlook for upstream investment, which could reverse the current downward trend forecast for both oil and gas. Persistent shortages of natural gas will continue to weigh on the sector and industry, though new supplies from the latter half will improve but not necessarily eliminate the shortfall.
|e/f = BMI estimate/forecast. Source: BMI, EIA|
|Crude, NGPL & other liquids prod, 000b/d||117.8||116.2||116.5||117.7||118.9||120.5||122.1|
|Dry natural gas production, bcm||42.8||43.2||43.9||44.2||44.6||45.1||46.0|
|Dry natural gas consumption, bcm||20.2||20.8||21.4||22.1||22.7||23.4||23.9|
|Refined products production & ethanol, 000b/d||109.5||110.1||110.6||111.2||111.8||112.3||112.9|
|Refined products consumption & ethanol, 000b/d||45.1||46.1||47.2||48.4||49.5||50.7||52.0|
The main trends and developments in the Trinidad & Tobago (T&T) oil and gas sector are:
Energy officials in Trinidad and Tobago confirmed plans to open a competitive bidding round for offshore acreage in Q415 or Q116. According to media reports 10 blocks had been identified and acreage nominations were being accepted for shallow, average and deepwater blocks. The prospect of additional acreage on offer provides further upside risk to our outlook for both oil and gas reserves. However critical to determining the extent of the upside will be dependent upon the level of interest displayed by the industry.
Authorities have also expressed optimism about the country's oil potential. In April 2015 energy ministry official indicated heavy oil was a priority. If technical and financial challenges can be overcome, the upside could be significant, with official estimates indicating heavy oil resources could total 1.5bn bbl onshore and further 3.6bn offshore. Companies have been attracted not only by improved terms, but deepwater potential that according to the energy ministry ranges from 3.1bn to 8.2bn barrels of oil initially in place.
The reserves outlook received a further boost when Venezuelan and T&T agreed in February 2015 to jointly develop cross-border oil and gas fields. Officials from both countries announced one month later that they had agreed to rules for exploration at seven sites covering 212.63 sq km of Block 4 in the Deltana basin. In a major boost for reserves, Caracas will keep 34 percent of the hydrocarbons with the remainder to Trinidad and Tobago.
Curtailments in the natural gas sector have been a persistent problem since September 2014, affecting output in key sectors, such as methanol production. Curtailments in the natural gas sector have been a persistent problem since September 2014, affecting output in key sectors, such as methanol production. Natural gas curtailments increased to around 30% in mid-April 2015, according to Platts, this was an increase on the 15% supply disruptions experienced weeks earlier. Trinidad and Tobago produces around 14% of global methanol supplies, accounting for around 14% of domestic gas consumption as of early 2015.
In response to IMF calls for to take advantage of lower global oil prices to reduce subsidies, the government confirmed in 2015 that any major revision to subsidies would be dependent upon the completion of a major expansion of compressed natural gas (CNG) infrastructure. The ongoing CNG initiative is due to completed in 2016, suggesting potential for a possible revision to subsidies from this date.
Industrial action remains a risk in the oil and gas sector, with the production at Petrotrin's Trinimar project disrupted several times to due strike and disputes over wages and contract terms. In May 2015, press reports indicated the USD2.11bn Juniper gas project could be delayed as a result of industrial tensions at the Labidco Fabrication yard where a platform for the project is under construction. Trinidad Offshore Fabricators (Tofco) employees have reportedly carried out numerous work stoppages amid a labour dispute.