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UWI’s Prof Andrew Jupiter: Expect more proven reserves from deepwater drills

Published: 
Wednesday, September 3, 2014
Energy Minister Kevin Ramnarine, left, speaks with recently appointed Professor of Petroleum Studies Andrew Jupiter, energy consultant Frank Look Kin and Rupert Mendes, retired public servant, at the Ryder Scott natural gas audit function at the Hyatt Regency on August 29. Both Mendes and Jupiter are former permanent secretaries in the Ministry of Energy. Photo: Kristian De Silva

T&T will see an increase in its proven natural gas reserves within the next decade, according to Andrew Jupiter, professor of petroleum studies at the University of the West Indies. In an interview with the Business Guardian, Jupiter said the additional reserves will come from the deep water and that it requires between five and seven exploration wells being drilled annually in order to replace the annual 1.5 trillion cubic feet of gas used annually.

On Friday, the Ryder Scott 2013 Natural Gas Reserve Audit Report indicated that there had been a seven per cent decline in proven natural gas reserves in 2013 compared with 2012. Some of the highlights of the report, which is eagerly anticipated by local energy watchers every year, included that T&T has proven reserves of 12.24 billion cubic feet (bcf), probable reserves of 5.526 bcf and possible reserves of 6.116 bcf.

Energy Minister Kevin Ramnarine said this decline should come as no surprise. “This is an annual thing we do and the reserves have been declining since 2002 every year. It did not start declining four years ago. What we have to do is ensure there is a forward programme of exploration to continue to replace reserves at the rate at which we are using those reserves,” he told the media at the Hyatt Regency Trinidad, Port-of-Spain.

Speaking on Tuesday, Jupiter, who recently retired as permanent secretary in the Ministry of Energy, said: “You have to first of all consider how did we arrive at our reserves situation, and if you do so, you will realise there is a direct correlation with a reduction in the number of rig days and a decrease in our proven reserves.

 “After 2004, we saw a fall in rig days and a decade on, we are seeing the effect. When you look at the graph, you will see there is now an increase in the number of rig days and this augers well for reserves replacement. 

“I believe that you will see an increase in proven reserves when we drill and make discoveries in the deepwater. All you need is one sufficiently large find in the deepwater, and I believe we will make discoveries there. Look all around you, in the north of Trinidad we have hydrocarbons, in the south, in the east and In the west. There is no doubt that if we drill, we will find hydrocarbons and this is an under-explored province. So the reserves are there. We simply need to explore for it.”

Jupiter said he hoped that the discovery in the deepwater would be oil with associated natural gas. He sad this would make the gas significantly less expensive to bring to market since a lot of the money will be made by simply producing and selling the crude. At the Ryder Scott news conference, Herman Guido Acuña, Ryder Scott’s managing senior vice president – international, said the decline was due to the high level of usage of 1.449 tcf per year and a replacement of only 500 bcf of gas.

He said there were small changes in both T&T’s probable and possible natural gas reserves, which in 2013 stood at 5.526 tcf and 6.116 tcf, respectively, with the island’s 3p being 23.188 tcf. However, there was a major jump of almost 9 tcf in the islands exploration potential, which in 2013 stood at 39.887 tcf for an overall resource potential of 63 tcf.

Acuña said the audit took into account Niko Resources and Trinity acreage and looked at solid leads and 3D seismic that clearly pointed out a good chance that another 9 tcf could be available in Blocks NCMA (2) NCMA (3) and 4 (B). He said the survey only took into account reserves in the shallow water and not in the seven deep water blocks that have recently been awarded and in which the T&T Government estimates contain as much as 31 tcf.

The audit also does not take into account the results from BP’s Ocean Cable Bottom survey which is still being processed, but in which the company has already said it has increased its reserves and has shown significant potential in its acreage off Trinidad’s east coast.

Acuña said the Caribbean island has been able to maintain its production to reserves ratio of between eight and ten years for a decade now and that is a comfortable position to be in. He said it poses a challenge because companies are not challenged to go out and look for additional reserves because there are no immediate downstream projects.

Jupiter said new technology will also lead to an addition to proven reserves category, but said this would not be enough to replace the 1.5 tcf being used annually. The former permanent secretary said there were significant reserves stranded on the shared border with Venezuela.

“If we are able to unlock those reserves, if we are able to successfully conclude those negotiations and bring those reserves to T&T for processing, then in the Loran/Manatee block alone, we are talking about ten tcf. And there are other cross border fields. If we do this, then we will have a model for the other blocks that this will be significant,” Jupiter said. T&T and Venezuela have been negotiating a cross-border arrangement for more than a decade.

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