Trinidad’s critical role in global energy security Stuart Young

There is tremendous potential for regional energy security integration. Trinidad and Tobago, Guyana and Suriname need to lead the charge.

Hon. Stuart YOUNG Minister of Energy and Energy Industries TRINIDAD AND TOBAGO

Trinidad’s critical role in global energy security

June 15, 2023

Trinidadian Minister of Energy and Energy Industries and Minister in the Office of the Prime Minister the Hon. Stuart Young talks to The Energy Year about Trinidad and Tobago’s upstream priorities and dynamics, the country’s role as a regional energy collaborator and hub, and its approach to navigating the global energy transition.

This interview is featured in The Energy Year Trinidad & Tobago 2023

How do you view the performance of the Trinidadian upstream sector in 2021 and 2022?
One of the things I’m particularly proud to say is that Trinidad and Tobago’s energy industry, in particular the upstream sector, managed to sustain business even during the challenging times of the Covid-19 pandemic.
We worked very closely with all of our upstream players and stakeholders to successfully facilitate crew changes and third-party contractors involved in exploration and production work. The only delays that we experienced in our upstream production were in the construction of platforms in Mexico and subsequent transportation to Trinidad, for example.
Trinidad and Tobago is a mature oil and gas province and with a small province, over time there is a reduction in production and reserves resulting from exploitation of the resources. However, the country has a lot of experience in the oil and gas industry and there continues to be a lot of potential here even as we explore prospects outside of our borders such as the Dragon field in Venezuela.

How confident are you about increasing the nation’s gas production to 90.6 mcm (3.2 bcf) per day in the near term?
In the short term, I predict that our production will stay between 2.8 bcf and 3 bcf [80 mcm and 85 mcm] per day. We will view it as great news if it surpasses that. We are focused on developing the resources that we know we have right now.
bpTT has launched production from its Cassia-C platform and has produced better results than expected from side-track drilling on some marginal fields. Shell is producing at their highest levels of production since they ramped up work in the country following the slowdown from the pandemic. We’ll also have Touchstone Exploration bringing the Cascadura field on line soon, among some of the other drilling projects that they are working on.

What lessons can be learned from the results of the 2022 deepwater bid round, where four out of 17 blocks were bid on?
It was not at all surprising to only receive four bids in the deepwater bid round. We have to look at the map of where current exploration is taking place, and where there is already infrastructure in place from multinationals such as Woodside, Shell and bpTT.
The bids we received were for blocks adjacent to those where Woodside has infrastructure in place. Most of the blocks on offer are in virgin territory with no infrastructure. Most of the successful players are waiting for Woodside to start production in the Calypso field to start building their infrastructure in adjacent blocks.
Additionally, with the global concern around climate change as expressed in COP26 and the commitment by some financial institutions to stop funding fossil fuel projects, it is unlikely that a multinational petroleum producer that is not already operating in Trinidad and Tobago is going to start investing in deepwater developments here. The interest in the deepwater blocks is exactly what we anticipated. We did not expect any new players to come in.
By comparison, the onshore-nearshore bid round was extremely successful. There was a lot more response and competition in that round. We received 16 bids covering eight out of the 11 blocks on offer.

How is the current government approaching the discussion around changing the petroleum tax regime to incentivise more production?
We are constantly looking at the fiscal regime, and the current government has been adjusting this regime over the last few years. The adjustments being made are mainly applicable to the onshore production of oil with respect to taxes in particular SPT [Supplemental Petroleum Tax], and PPT [Petroleum Profits Tax]. We have made adjustments and are always willing to listen to small independent producers as to what more they may need to increase production. For natural gas production, especially offshore, we are able to make adjustments when we renegotiate PSCs and E&P licences.


How important are independent operators to increasing Trinidad and Tobago’s oil and gas production?
Independent operators have a vitally important role to play in Trinidad. The Ministry of Energy has mandated that Heritage open up its acreage. There are companies that are interested in engaging in farmouts and lease outs with Heritage. These smaller companies are nimble and if they have the capital available, and are willing to drill and to produce, then we will fully encourage the activity. They are critical not only to maintaining oil production, but to increasing it.
As an example, Touchstone is doing an excellent job in onshore developments and becoming more involved in natural gas production. There is a lot of potential in onshore gas production because it is not as costly as offshore gas projects, and the success of these onshore gas projects will be helpful to adding supply to NGC.

How could geographical factors play a role in allowing the country to ramp up production and step up LNG exports?
Hydrocarbons production in Trinidad and Tobago is very stable. Oil and gas will realistically be around for more than the next decade and natural gas in particular is going to be utilised past 2050. I recently spent time in the United States discussing why Trinidad and Tobago is unique. We’re the only jurisdiction in the world that has immediate capacity to produce more LNG and more ammonia.
There are proven gas reserves across our border as well. A proposed pipeline would run just 17 kilometres from the Dragon field in Venezuela to existing state-of-the-art downstream infrastructure in Trinidad and Tobago. Access to that gas would allow us to increase the production of LNG and ammonia. There are significant hydrocarbons reserves in Venezuelan territory, mere kilometres away from the existing infrastructure in Trinidad.

With Guyana quickly becoming one of the hottest exploration destinations globally, what steps must be taken to make sure Trinidad remains a key energy hub in the region?
There is tremendous potential for regional energy security integration. Trinidad and Tobago, Guyana and Suriname need to lead the charge. We, as a region, can be stronger as a global player if we’re all operating together, as opposed to operating as individual jurisdictions. Trinidad and Tobago stands ready to work with Guyana and Suriname to be able to achieve what is best for their jurisdictions, and for us as a region. That will benefit Latin America, and the whole of CARICOM. The country has decades of experience in gas, and over a century of experience in oil exploitation. I see a lot of potential synergies between Trinidad and Tobago, Guyana and Suriname. However, we respect that these are sovereign nations. They have discovered hydrocarbon resources, and they will have their own views as to how they should develop them.

What opportunities are there for Trinidad and Tobago to engage its CARICOM neighbours in economic co-operation in the energy industry?
There are potential hydrocarbon resources in the territorial waters of Barbados and Grenada. We are reminding the upstream producers operating in Trinidad and Tobago of this potential. However, these companies are reducing their capital spend globally due to increasing pressure from environmentalists, and other financial constraints. Nevertheless, we continue to advocate for hydrocarbon development in the region, not just within Trinidad and Tobago.

What potential is there for the inactive Petrotrin refinery in Pointe-à-Pierre to be utilised?
If there is an interest, and a company approaches us with a viable proposal, then the Petrotrin refinery can be put back into use. The Trinidadian government is not going to restart the refinery otherwise. Our Prime Minister made an offer to an international audience at the Guyana Energy Conference this year, stating that the Petrotrin refinery and its supporting infrastructure are available to restart, upgrade and use on reasonable terms. That offer remains available for companies with a viable proposal.

Regarding the country’s energy transition, how fundamental are undertakings such as the Project Lara solar development and the green hydrogen economy?
The agreement for Project Lara was signed in December 2022 between the government, BP, Shell and Lightsource bp, and a ground-breaking ceremony was held in April. With a capacity of 112.1 MW, it will be the largest solar project in the English-speaking Caribbean. This project is very significant for Trinidad and Tobago, where 95% of the population is tied to an electricity grid with power that is 99.9% generated by natural gas.
One benefit of this project is that it takes us a step closer to the transition to renewable energy and meeting our decarbonisation goals, while another is that we will have more of our natural gas resources available to monetise. As we continue to work on Project Lara, we are also pursuing opportunities to incorporate other renewables. The government has given the approval to develop the country’s first green hydrogen project. We, as the government, are working through National Energy as the entity to help us achieve this. Studies are being conducted on the potential of solar and wind energy to generate electricity which would be fed into electrolysers to produce green hydrogen.
We are also looking at possibilities for CCUS in Point Lisas, where there is a cluster of industrial plants from which we can capture the carbon dioxide emitted and utilise it in enhanced oil recovery or sequester it in abandoned wells.

What message would you share regarding Trinidad and Tobago’s navigation of the global energy transition and the role the country plays in it?
We have shown that we are a very responsible Government in the management of the domestic energy industry. One of the things I have worked very hard on is to ensure that our voice is being heard globally and that the global energy community is aware of our experience and potential.
We intend to be at the forefront of the conversation in the energy transition as policies are being developed because it directly affects us. For example, in 2022, the Prime Minister and myself took part in the Green Climate Fund conversation in Qatar. As Qatar and Trinidad and Tobago are hydrocarbons-based economies, we have to lead the conversation. The transition is something that we must do responsibly, utilising best-in-class technology. We need to reduce our carbon footprint, but the world needs energy security.

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