Energy executive warns TT energy boom might be over

BP Trinidad and Tobago (BPTT) needs about US$600 million (TTD$3.8 billion) in annual capital investment to sustain its current level of production of 450,000 barrels of oil equivalent per day.

The oil company's Chairman and President Robert Riley made the disclosure Wednesday in a speech to the American Chamber of Commerce on the theme: ’The Future of the Gas Business in Trinidad, Time to Rethink"

Riley warned of "steep declines" in production reservoirs and said BPTT's business would be adversely affected if the oil company fails to attract the necessary investment.

Hs said the country’s natural gas bonanza is over and there are now key decisions that must be made with a sense of urgency. "We can no longer depend on the early advantages we had as first mover into the United States LNG market, as we are now facing serious challenges," he said.

Riley assured the business leaders that there is enough gas in place to sustain BPTT's current contracts and obligations to 2025.

However he warned it could have a significant challenge on its hands over the next decade if it fails to make a successful new find, beyond the 12 offshore platforms where it currently operates.

"We are clearly at a point where we are relying on exploration success in the deep waters off Trinidad and Tobago for expansion of our hydrocarbon industry," Riley added.

Riley said the situation is critical and called for frank and open debate about the future.

He said, "In the new global environment, Trinidad must adjust to a world market that is characterised by low natural gas prices, a competitive global LNG market that is becoming more integrated and where the system on the long term contract pricing will continue to erode."

The energy chief suggested that key industry players become more efficient producers, and advised that they must adapt to the environment "if we are to derive the maximum revenue from gas."

"What we have to do is to focus on efficiency and revenue as opposed to growing volumes," he said.

Trinidad and Tobago's energy sector produces 4 billion cubic feet a day of gas, with 60 per cent exported as liquefied natural gas (LNG), 27 percent used in the petrochemical sector and 7 per cent for power generation.

A gas audit released in December 2008 by U.S.-based petroleum consultant Ryder Scott showed that Trinidad and Tobago's proved reserves stood at 15.4 trillion cubic feet, down 1.6 trillion from an audit a year earlier.

Probable reserves were estimated at 8.5 tcf and possible reserves at 6.3 tcf.