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Thrilling times for regional energy sector

...questions Petrotrin’s viability going forward
Published: 
Thursday, January 18, 2018
Former energy minister:

Declaring it is exciting times for the energy sector, former energy minister Kevin Ramnarine said for the first time exploration drilling is going to be occurring simultaneously in deepwater T&T, deepwater Guyana and deepwater Suriname.

Referring to the group as the STTAG (Suriname, T&T and Guyana) region, Ramnarine said a drill ship is operating in T&T for BHP, two drill ships in Guyana for ExxonMobil, and one in Suriname for Kosmos and therefore, the region is poised to be one of the world’s most promising deepwater provinces.

Ramnarine’s projections come on the heels of the 2018 Energy Conference, which carries as its theme this year, “Maximising Value Through Collaboration”. It will be held at the Hyatt Regency Hotel, Port-of-Spain between January 22 and 24.

Ramnarine spoke to Business and Money to highlight the highs and lows which he predicts for the energy sector for 2018.

Petrotrin

Looking at other aspects of the energy sector, Ramnarine referred to Petrotrin and called for the board to be given autonomy in its decision-making, and for the Government to step back.

“In my tenure as minister, I allowed the board to do their job and I set policy and strategy. I think boards going forward need to be left alone by the government. The board of Petrotrin needs to be given the autonomy and the independence to do the job they were given to do.

“Petrotrin’s production has to increase, but the company does not have the money to drill. The company can only raise capital if the company is only able to convince people it wants to borrow money, and from that they would get returns. Petrotrin is in survival mode and it is in a very fragile state.”

Ramnarine said he expects that Petrotrin and its viability would be a topic of discussion at the conference especially its financial situation concerning the US$850 million bond.

“The bond is a major issue and is due for payment in 2019. Petrotrin would not be in a position to meet that payment so they would have to refinance the bond.

“For the bondholders to agree to the refinancing of the bond, they have to believe that there is a credible plan to make Petrotrin viable again. Otherwise, why would you refinance a bond if you don’t think that the company is going to be viable in the future?”

On the issue of natural gas, Ramnarine suggested that the conference needs to address the issue of the destination of our natural gas.

He explained that T&T will have a situation in 2018 involving making a major decision about whether to extend the life of Atlantic LNG’s Train One plant.

“Train One’s contract comes to an end in 2018. This is why we decided to do a Gas Master Plan in 2015 which was laid in the Parliament.”

Another issue he said was deepwater exploration and BHP Billiton’s effort in this regard for 2018.

“I continue to believe this is T&T’s great hope for its oil production.

“In 2018, we have an exciting exploration being done by Lease Operators Ltd (LOL). This is as a result of a block being awarded to them by the Ministry of Energy in 2014. They are ready to explore.

“I hope it’s a new oil discovery on land which would be the first that we’ve had in 17 years. We could possibly have the first deepwater discovery in 2018, and the first land-based discovery in 17 years within this year.”

Guyana

ExxonMobil has made six discoveries in two and a half years so far with an inventory of 3.2 billion barrels of oil equivalent, he said.

“We still don’t know the size of the discovery on Ranger 1. We are being told that Ranger 1 is very large. Guyana is going to continue to discover oil.

“There are great opportunities for T&T’s service companies with some of them already capitalising. Ramps Logistics which won the Exporter of the Year award at the Energy Conference last year. They are the main logistics supplier for ExxonMobil in Guyana.”

In 2017, Ramnarine was invited to Guyana to conduct five lectures given his expertise as former energy minister.

He said Guyana is in the midst of doing three things to develop its sector.

“They are passing a Petroleum Commissions bill to create the Petroleum Commission of Guyana, which is different from the Ministry of Energy. It is going to be an independent commission that oversees the oil and gas industry. Also, they have in place, a local content policy and, thirdly, they are establishing a heritage and stabilisation fund.”

He added that Guyana has never had an oil and gas industry and private sector companies are in the process of building port and marine facilities, as well as yards and warehouses along the banks of the Demerara River exiting into the Atlantic Ocean.

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