September 19, 2014
The lower production that has resulted in the gas curtailments recently experienced by both Pt Lisas and Atlantic (LNG) is primarily a result of a pause in new investment in recent years by upstream producers, including BPTT due to the culmination of many factors which created an unfavorable investment climate. Factors such as the global economic crisis, an unfavorable fiscal environment and the expectation by state enterprises that the industry would have an oversupply of gas due to the cancellation of downstream projects created a lot of uncertainty which invariably affected investment decisions.
Maintenance activity necessary to ensure continued safe and reliable operations has contributed to the current gas curtailments, however it is not the primary factor.
Measures have however been taken to improve the attractiveness of investment in the sector - such as improved fiscal terms and more frequent bid rounds - and there is clear evidence that investment is returning. It will however take time to re-build upstream capacity.
The challenge ahead therefore is to manage a short term period of supply shortfalls while ensuring the investment climate continues to incentivize the search for and development of more oil and gas. The issue is not whether there is enough gas, but rather whether T&T has a robust energy policy or road map that focuses on the right structural and commercial terms to ensure it attracts the level of investment necessary to bring those resources into production.
Clearly, where gas shortfalls occur decisions will be required as to how best to allocate the available gas to maximize the revenues for the country.
We feel it is in the best interests of both the sector and the country that we move forward with urgency to set out an energy policy or road map for the next decade and beyond to ensure that these structural and commercial issues are addressed. We remain committed to working with the government and other companies in both the upstream and downstream industry to mitigate the impact of the current gas shortfalls as well as to focus our efforts on ensuring we have a successful industry for decades to come.
Note to editors:
BPTT operates in 904,000 acres off Trinidad’s east coast. BPTT has 13 offshore platforms and two onshore processing facilities.
Danielle Jones, bpTT: +1 868 497-4747
Luis Araujo, bpTT: +1 868 793-3374
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