Trinidad’s hydrocarbons and hydrogen prospects

Trinidad and Tobago

Kevin Ramnarine, former Minister of Energy and Energy Industries, talks to The Energy Year about challenges in ramping up Trinidad’s oil and gas production, the role of deepwater gas projects, the country’s potential for creating a hydrogen economy and prospects for developing the Loran-Manatee field.

Is Trinidad poised to ramp gas production back up to 90.6 mcm (3.2 bcf) per day in the near future?
No, it’s not going to see an annual average production above 3.0 bcf [85.0 mcm] of gas per day for some time. We last saw production above 3.0 bcf per day in January 2021. The reasons for this decline are related mainly to a fiscal regime that is not conducive to the requisite level of investment being made, no awarding of new acreage for exploration in over eight years and the maturing of producing reservoirs in the Columbus Basin and North Coast Marine Area. In addition to these three, we lost momentum with drilling which was built up from 2011 to 2015, and we lost momentum with the award of deepwater acreage.
What we need is a couple of projects that bring a lot of gas into production, as the BP Juniper project did in 2017. In that regard, the Manatee field is a very important project, expected to produce by 2027 or 2028. It should provide 700 mcf [19.8 mcm] of gas per day.

How important are deepwater projects for the country’s gas production?
Deepwater gas is very important for us, but the challenge is making sure it is economic considering where the fields are, the depth of water and the distance from existing infrastructure. For gas to be economic in deepwater, you have to find a lot of it. We have not been finding large enough volumes. What Woodside (formerly BHP) has found is around 3.7 tcf [104.8 bcm], which makes the economics challenging. This is where the government should have intervened and worked with Woodside.
The most recent deepwater round only received bids from a consortium of BP and Shell. We have to re-examine the whole fiscal regime around deepwater, and it must consider the risks involved, given that we have been finding natural gas in the main and not many liquids.
There’s also a regional story here, in that Barbados is about to have a bid round for acreage not far from Trinidad’s deepwater. The one company that already has licences on blocks in Barbados is Woodside. So, we need to understand whether or not Woodside has the appetite to go after deepwater here in Trinidad and Tobago.

What factors are preventing oil players from investing more in EOR?
Most of the oil discovered in Trinidad and Tobago is still in the ground. The reason for this is that it’s not economic to produce using secondary recovery techniques. We need investments in enhanced oil recovery, but the tax regime is not incentivising this. If it was, it would have happened.
The minister made some changes within the last budget to the supplemental petroleum tax (SPT), but these didn’t go far enough. In fact, they will have no impact on production and are superficial, in my opinion. We need to move beyond tinkering with SPT and give it a radical overhaul.

What other challenges are there in ramping up the country’s oil and gas production?
The other problem we face is the ease of doing business. There are too many agencies to approach and too many approvals that take too long to secure. Those factors increase the time it takes to get to first gas. For example, we awarded Touchstone a production licence back in 2014, but they have only now started to produce gas in 2022. That is eight years, and about two to three of those years may have been taken up going through the approval process.
We also see this affecting the solar farms that Lightsource bp wants to build. Those should have been under construction by now, but they took too long to get the approvals. The ease of doing business is suffocating the industry.

How important could a hydrogen economy be for Trinidad and Tobago’s future?
The world is stepping away from grey, carbon-intensive ammonia. In years to come, our ammonia will have no place in the world. This is why the NewGen green hydrogen project is so important for us and something which we need to see a lot more of. The country holds potential for a green energy value chain. Trinidad should position itself to become a global player in the hydrogen economy, as we have the building blocks to achieve that already in place.

Is it likely that sanctions will be removed to allow development of the Loran-Manatee field?
That matter has a long history of more than 20 years. Between 2002 and 2003, PDVSA [Petróleos de Venezuela S.A.] in Venezuela went on strike, and there was a crisis in the country. Our prime minister at the time sent fuel to Venezuela, and Hugo Chavez was grateful. Shortly thereafter, an MoU was signed to explore the unitisation of Loran-Manatee.
The current governments of Trinidad and Venezuela agreed that Manatee could be developed on its own, and Venezuela can develop Loran on its own. In January 2023, the United States’ OFAC [Office of Foreign Assets Control] granted a licence to Trinidad and Tobago and Venezuela for two years to develop the Dragon project. The Venezuelans have expressed their anger with certain terms in that licence. I think it will take longer than the government accepts. Given that no one can say with certainty when that gas will arrive in Trinidad, it’s not something we can depend on entirely.

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