By
Energy Correspondent
The
Trinidad Express
Port
Spain
Petroleumworld.com
03 12 06
It's amazing how the optimism that heralded the initial unitisation
talks between Trinidad and Tobago, and neighbouring Venezuela
has practically vanished. One would recall the historic visit
of Venezuelan President Hugo Chavez to Trinidad in August 2003
and the resultant Port of Spain/Caracas Accord from which emerged
a letter of intent-to examine, et al, commercialisation of Venezuela's
gas reserves in T&T-and a Memorandum of Understanding (MOU)
between the two countries to govern the procedure for unitisation
of the hydrocarbon reserves that extend across the borders between
the two states.
At that time with three LNG trains already in
production, Trinidad and Tobago saw the unitisation process
as critical towards its further LNG expansion and overall gas-based
development. And naturally so because a unitisation agreement
would establish the procedures and allow for the efficient exploitation
of fields which share common reservoirs with adjacent fields
across the border.
The absence of a unitisation agreement would
prohibit any one side from developing its portion of reserves
unilaterally without the expressed agreement of the other party.
Following the August 2003 MOU, it is understood
that several Steering Committee meetings were held in 2004.
The pace of activity slowed appreciable with only one meeting
reported in 2005. This was a few weeks before the PetroCaribe
Caribbean initiative meeting in Puerto La Cruz in June 2005.
Prime Minister Patrick Manning
has tacitly attributed the stalling of the unitisation
talks to Trinidad and Tobago's initial stand on PetroCaribe,
a stand adopted much to the apparent chagrin of President Chavez.
But when one considers that the unitisation talks bear little
if any relationship to PetroCaribe-a mechanism for the long-term
financing of Venezuelan petroleum products by needy Caribbean
states-it does suggest that the former discussions are intrinsically
linked to other geopolitical ripples that may extend far beyond
border boundaries. Speaking at the recent Petroleum Congress
Wendell Mottley made reference to Chavez' geopolitical ambitions.
This is the disconcerting aspect of these historic
unitisation talks. Readers will recall that our first Prime
Minister, the late Dr. Eric Eustace Williams, viewed the South
American neighbour cautiously and had even insinuated that Caracas
had colonialist tendencies. Venezuela's continuous claim to
a portion of Guyana's territory and their recent reinforcement
of ownership of "Isla de Aves" or Bird Island, offshore
Dominica, strongly heighten that point of view today.
Given that backdrop, it is now apparent that,
contrary to the initial optimism displayed by Manning, the Unitisation
agreement may not be a simple task and may well be a long way
off. This would be unfortunate since there is so much at stake
for both countries and even more so for this country. For it
is Trinidad and Tobago that is fully immersed in a dynamic gas-based
industrialisation thrust with four LNG trains and an ever growing
ambitious list of downstream projects with an insatiable appetite
for more gas. In this regard, bpTT's unrestricted exploitation
of the Kapok field (that borders Venezuela's Block 1 and pending
Unitisation) would be a significant boost to the supply situation.
Venezuela, too, with tremendous reserves of
oil and gas, is now about to accelerate its offshore non-associated
gas-based development with the Deltana Platform area, adjacent
to Trinidad's border, playing a leading role. ChevronTexaco,
which has recently drilled exploratory wells on both sides of
the border, would now be eager to shift to exploitation gear
but must, however await unitisation accords from both Governments.
Norway's Statoil is also about to
resume exploratory drilling in the Deltana's
Block 4 facing bpTT's Block 5b on the Trinidad side.
The onus must therefore be on Trinidad to move
the process forward despite the obstacles that might emerge.
Manning took the first step at the 17th Inter-Sessional Caricom
Heads of Government Conference in Port of Spain by supporting
the decision by member states to sign the PetroCaribe agreement
despite seriously compromising the viability of Petrotrin's
regional export market and perhaps the basic fabric of Caricom.
The strategic question now is whether Unitisation eventually
would facilitate the use and monetisation of Venezuelan gas
by Trinidad and Tobago. According to sources, much of the gas
is to satisfy Venezuela's domestic needs.
Nevertheless, an indispensable ingredient towards
a speedy Unitisation is communication. The language barrier
might make the goal a bit more cumbersome, but it should not
diminish the willingness by all to meet and thrash out differences.
In this vein and irrespective of PetroCaribe one wonders why
these vital talks seem to have been stalled for almost a year.
Formulating a timely unitisation agreement also
would require a substantial dose of commitment from both Governments.
Commitment that embodies a determination to allocate adequate
time and resources to ensure fulfillment of established milestones.
Given the many competing interests that occupy the time and
resources of the negotiators from both countries -for example:
new bid rounds, cross country pipelines, new commercial arrangements
and expanded gas based developments - the unitisation progress
would depend greatly on an elevated level of commitment.
Finally,
a unitisation agreement would only be achieved if communication
and commitment are allowed to flourish in an atmosphere of cooperation.
And this naturally stems from the very objective of the unitisation
process that is, the efficient and economic development of the
hydrocarbon reservoirs that cross the countries' borders. The
process obviously would present numerous challenges-legal, fiscal,
and technical-but also would provide an unprecedented opportunity
for both countries to work together towards fulfilling their
mutual goals.
