Last year it was gloom and doom as oil and gas prices drop precipitously. Things are just the opposite in 2010.

There is certainly more cause for optimism regarding Government’s revenue take from oil and gas in 2010.

Last year, it was doom and gloom as gas prices had plummeted to below US $3 and oil to around US $36: things are just the opposite this year as oil and gas prices way exceed budget expectations with oil being around $79 (the current budget is based on $55) while gas as of today is US $4.7, a whopping two dollars more than the budget figure!

More good news as a senior official of BP Trinidad and Tobago (BPTT) revealed last Wednesday that the drilling of two appraisal natural gas wells had good results, and that exploration to increase reserves will continue this year.

BPTT vice president for development Curtis Mohammed told a recent energy conference that wells in the Serrette and Savonette offshore fields were drilled last year: “The Serrette well encountered gas pay in five reservoirs and results of the Savonette well drilled late in 2009 are being evaluated,” he said.

There was also an “increase in resources” in the other productive gas fields: The Kapok, Cannonball and Mango gas fields are reportedly showing good results from surveillance and depletion planning efforts. “As a result, we reported a reserve replacement ratio of close to 100 percent for the Trinidad business,” Mohammed said.

BPTT operates 12 offshore platforms and two onshore processing facilities, sells 40 percent of its gas to the state-owned National Gas Company and 60 percent to the Atlantic LNG company.

Another TT energy sector company, BHP Billiton Trinidad and Tobago, which has experienced a rapid decline in its oil production, has announced that it will move into gas production in the first quarter of 2011.

“Our oil continues to approach a natural decline in the fields. It will be helped by our ability to produce gas and sell it to the market. We do see our projects steering more toward gas than oil in the future,” Jon Krome, the company’s vice president for operations in Trinidad, said last week.

BHP’s oil production from its Greater Angostura field dropped sharply from 50,542 barrels per day (bpd) four years ago to 14,870 bpd last August.

But the company has since announced that it will have the capacity to produce close to 300 million cubic feet of gas per day to sell to National Gas Company (NGC) and to supply downstream petrochemical companies.

Over a year ago, BHP Billiton TT signed a contract with NGC to supply gas from a new gas export platform from next year.

The entry of new investors in TT’s energy sector is also a promising sign of recovery: Petro Andina Ltd, a Latin-American company is the newest player in the local energy industry.

The company plans to begin a drilling programme in the near future, Country Manager Brian Lynam announced: “We have a number of leads and prospects on the (exploration blocks) that we have (and) we are very excited about it. “We picked two countries that we think are in an excellent position to make investments. “I think it’s an opportunity for us to invest and stay here,” Lynam said.

Petro Andina has three onshore blocks in Trinidad and four onshore blocks in Colombia, but the company is interested in seeking out oil over natural gas in Trinidad. The company sees Trinidad and Tobago as an important extension of the major petroleum opportunities that exist in neighboring Venezuela.

Drop in oil and gas prices dents Petrotrin’s balance sheet. Last month it successfully floated a TT$5 billion bond on the international market.

What a difference a year makes!

Last year, as reported in the Tntinsider recently, State-owned petroleum company, Petrotrin, made a whopping $2.5 billion profit.

Well, the company may be well on the way to making a disastrous loss for 2009 having already lost some $406 million for the first six months this year which Petrotrin has, naturally, blamed on the “current global recession followed by a significant fall in commodity prices of crude oil, refined products and natural gas.”

These factors “adversely affected the financial performance “, moaned Dr Malcolm Jones, executive chairman, as he dodges “bullets” by the militant Oilfield Workers Trade Union (OWTU) which has been after his head.

Jones pointed to a profit of over $1 billion in the comparable period last year when oil prices were buoyant and Nymex WTI crude averaged US$94.23 in March 2008 compared to US$50.92 in March 2009.

He gave the assurance that the company “has accelerated its cost control initiatives during this period and has been able to achieve reductions in its operating operations throughout the company.

However, bad news all around: crude oil and gas production decreased by 2.8 per cent last year and refinery throughput fell by 1.9 per cent.

Jones said that the company’s strategy to deal with the global challenges was to concentrate on completing key capital projects that offer growth potential and increased cash flows and last month the company raised some US$850 million (TT$5.1 billion) on the international market to complete its clean fuel projects.

That’s an awful lot of debt, considering the volatile nature of the crude oil and gas market where gas prices are well below US$3 mmbtu.

Jones is anything but an optimist as he states:

“As we continue to face significant challenges brought about by economic downturn and fall in commodity prices, our business strategy will focus on becoming more competitive in all our operations.”

Tntinsider will continue to monitor Petrotrin.

]]> http://www.tntinsider.com/energy/01784/petrotrin-loses-400million/feed/ 0 http://www.tntinsider.com/energy/01614/10-drop-in-gas-reserves/ http://www.tntinsider.com/energy/01614/10-drop-in-gas-reserves/#comments Wed, 02 Sep 2009 16:59:21 +0000 TNT Insider Staff http://www.tntinsider.com/?p=1614

Ryder Scott’s latest report reveals that gas reserves have declined by 10 per cent. Unless new gas is found, it will run out by 2020.

With the budget only days away, the news about the country’s gas reserves are not encouraging.

The much awaited Ryder Scott report has revealed that there is 10 per cent less gas reserves than in 2007- some 15.4 trillion cubic feet in 2008 as opposed to 17 trillion cubic feet in 2007.

Ryder Scott had reported last year based on these reserves there were 12 years supply based on current utilization but now it appears that there may be only 10 years of reserves.

Energy Minister Conrad Enill said that the Government will continue its strategy of exploration to find gas.