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Editorial/Opinion

 

David Renwick : TT'S Ramnarine - hard act to follow


The Minister of Energy and Energy Affairs, Kevin Christian Ramnarine (center) with drilling
personnel at the Ocean Onyx offshore deepwater semisubmersible rig, Diamond Offshore Drilling Inc.


Yesterday, May 12, marked five years since Energy Insider has been appearing in the Business Express, during which time it has acquired a solid national and international reputation.

What's significant about the period, is that it exactly coincides with the term in office of the People's Partnership (PP) government. Rest assured that Energy Insider will be continuing, so long as this business supplement wants it. I can't say the same for the PP, however, judging by the antagonistic mood in the country.

If the PP goes, then so, of course, does its Minister of Energy and Energy Affairs, Kevin Christian Ramnarine, which I would regard as a major loss to the industry.

Minister Ramnarine has presided over some important advances in the energy sector, which I will list in a moment and could justifiably consider himself the best minister of energy ever, partly, I make so bold as to say, because he has followed my advice in many areas.

He would have a great future for himself out of politics, as a global consultant on the Trinidad and Tobago and Caribbean energy sector, moreso after being named the ?Petroleum Economist's? energy executive of the year for 2014, a designation bestowed, as the magazine explains it, on ?someone who has made, or is in the process of making, a major contribution to the industry, either regionally or globally, regardless of age.?

I hope he remembers to hire me, as a research assistant or something along those lines, when he does cash in as an energy consultant!

Ramnarine is clearly going to be a hard act to follow when the next energy minister, probably from the People's National Movement (PNM), takes office but ?Energy Insider' is always here to offer some helpful advice.

How has the minister moved the industry along in the four years he has been in office (he was preceded for a year by Carolyn Seepersad-Bachan)?

His greatest achievement has undoubtedly been getting exploration going in the country's deep water region (1,000-3,600 metres, according to the MEEA definition) after his predecessors had tried and failed, to do so.

Hydrocarbons having been discovered on land in Trinidad, in the Gulf of Paria on the west, off the north coast, off the east coast, even off the north east coast, the deep water region, which sweeps from the TT/Grenada maritime boundary line in the west, skirting the TT/Barbados boundary line to the north east and comes to rest in the south east on the TT/Venezuela maritime boundary, is truly our last frontier for exploration and, it is fervently to be hoped, discoveries of oil and/or gas.

The deep horizon area, both on land and offshore, is also ?frontier? but perhaps not as much so as the deep water, where it is expected that the prize will be bigger.

To encourage this ground-breaking deep water and also deep horizon activity, Ramnarine successfully persuaded his colleague, the minister of finance and the economy, Larry Howai, to grant a series of fiscal incentives that would sweeten the pie for companies.

  

These were particularly generous in the case of the deep water, which now allows a company like the Anglo/Australian, BHPBilliton to be willing to take on all nine allocated deep water blocks as operator.

As Dr David Rainey, who oversees exploration for BHPBilliton Petroleum, says: ?The fiscal terms previously on offer in Trinidad and Tobago did not allow us to make a satisfactory return on the risk of undertaking a deep water exploration programme.?

The more generous revised terms now positions Trinidad and Tobago to potentially become ?the petroleum division's third core area behind the US and Australia,? he says.

We can thank Ramnarine for that and for the deep horizon drilling tax incentives, as well as those for the development of small oil pools, the early write off of exploration drilling costs as well as incentives for workovers and qualifying sidetracks. The earlier reliefs on the development of mature and small oilfields and on enhanced oil recovery (EOR) date from Ms. Seepersad-Bachan's time (she was also quick to sanction some of the deep water incentives), though the previous PNM administration had laid the groundwork for this.

Ramnarine's other main achievements during his time in office very much include the institution of annual block offerings (also involving the onshore, which had not been done for many years) something preceding PNM governments conspicuously failed to do, despite being headed by an oilman, geologist Patrick Manning.

Exploration acreage was offered in 2010, 2011, 2012, 2013 and 2014 and one expects the next energy minister to continue the trend.

Moving smartly along with compressed natural gas (CNG) as an alternative motor vehicle fuel and bringing all the paperwork to fruition on at least one pair of cross-border blocks, 6D and block 2 (Venezuela), must also rank as notable.

The one area in which the minister did not live up to his goals was that of liquids production, the key to healthier tax returns and the survival of the Petrotrin refinery.

In that first ?Energy Insider' five years ago, I had pointed out that crude oil production had fallen by 14,000 b/d between 2007 and 2009, from 121,754 b/d to 107,169 b/d.

The decline continued unabated during the PP's tenure, and in 2014 only 68,582 b/d of crude were lifted on average in Trinidad and Tobago.

But its not only crude output that has plummeted: that other liquid, condensate, which comes courtesy natural gas, was as higher as 31,600 b/d in one month in 2010, the year the PP assumed office. Last year, it averaged only 14,677 b/d, according to Ramnarine's own ministry.

It is true there was a decrease in natural gas production between 2010 and 2014 from 4,319 mmcfd to 4,069 mmcfd but that is not enough to explain the drastic fall in condensate retrieval.

Newer gas fields less condensate rich may have something to do with it but what stands out is that the incoming energy minister will have a liquids challenge on his hands which he (she?) will have to move expeditiously to confront.

If Ramnarine's ?new energy economy? comes to pass, it could give a kick in the pants to the liquids situation, since it consists of finding producible crude in the deep water, the extraction of heavy oil, the retrieval of left-behind oil through reservoir re-pressurisation and the start of cross-border gas output.

I see the minister has finally come around to considering incentives for small gas pool development another idea I put into his head and that could conceivably make a modest contribution to condensate production.

David Renwick was awarded the Hummingbird Medal (Gold) in 2008 for the development of energy journalism in Trinidad and Tobago. Petroleumworld does not necessarily share these views.

Editor's Note: This commentary was originally published by The Sunday's Express on May 13, 2015. Petroleumworld reprint this article in the interest of our readers.

All comments posted and published on Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of Petroleumworld. All comments expressed are private comments and do not necessary reflect the view of this website. All comments are posted and published without liability to Petroleumworld.

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