Trinidad’s Prime Minister Kamla Persad Bissesar: “Trinidad will not wait for the end of any energy era,” she said. “Our principle is simple: investment goes where it is welcomed and stays where it is well treated.”
The PM of a country with an oil production history that predates the Drake well in Pennsylvania leaves no doubt about her support for deepwater development. Her candid and clear messaging is most refreshing.
Consistent with her policy guidance, T&T signed a Production Sharing Contract with Exxon for a massive deepwater tract (Block Trinidad and Tobago Ultra Deep 1, map below). Per Ms. Persad Bissessar:
“Today’s signing underscores our government’s commitment to strengthening national energy security and to unlocking the full value of our hydrocarbon resources through discipline, policy, competitive terms and trusted partnerships.”
The contract is an impressive achievement for Exxon, which was awarded the block non-competively through direct negotiation rather than bid rounds. The spectacular deepwater results offshore Guyana were a major selling point for Exxon, which promoted its leadership in understanding Caribbean offshore geology.
Although another Guyana is unlikely, the enormous lease block presents a great opportunity for Exxon. The consolidated block spans 7,765 square kilometers in the Eastern Tobago Basin in water depths exceeding 2,000 meters. By comparison, Trinidad and Tobago’s total surface area is about 5,128 square kilometers and a typical Gulf of America lease block is only 23 sq km. (Think about that! The size of US offshore lease blocks, which are the world’s smallest, needs to be reconsidered.)
Based on press reports, Exxon will carry out seismic acquisition within 12 months, followed by geological and geophysical studies, and drill up to 2 exploratory wells during the initial phases of the contract. (Reports differ as to whether one of those wells is mandatory, but presumably that won’t be an issue.)
Does this impressive deal reduce the likelihood that America’s largest oil company, which has essentially abandoned the Gulf of America except for its (fading?) carbon disposal ambitions, will participate in the upcoming Gulf lease sale? Politically, failure to participate would not seem to be very astute given the Administration’s promotion of domestic production and energy dominance.
Bud's Offshore Energy (BOE) 