BpTT tipped for deepwater blocks

BpTT is tipped to emerge as the big winner in the deepwater bid round following a recommendation of the Energy Subcommittee of Cabinet last week, which could be ratified by the Cabinet as early as at this week’s meeting on Thursday. Cabinet sources told the Guardian that the Energy Subcommittee of the Cabinet agreed to the award of Blocks 14 and 23(a) to bpTT, which is a subsidiary of the British energy giant, BP.  The company submitted the sole bid for Block 14, but beat out bids submitted by Niko Resources and a consortium comprising BHP Billiton, Repsol and Total for Block 23 (a).

Cabinet sources say, however, that only two blocks will be awarded in the deepwater bid round as the Government has decided to not to accept the bid of BHP Billiton and Repsol on Block 23(b).

Blocks 14, 23 (a) and 23 (b) are to the east or north-east of Tobago and were part of the Government’s attempt to start exploration activity in the country’s deepwater blocks.
Last September, the Government offered 11 deepwater blocks—defined as being greater than an average depth of 1,000 metres—but only received bids on three blocks.
The Cabinet Subcommittee, which is chaired by Prime Minister Kamla Persad Bissessar, agreed that the bid on 23 (b) did not meet the minimum benchmark and will not be awarded to any company, according to the sources.

The Prime Minister on Friday revealed to journalists that she chaired a meeting of the Energy Subcommittee for four hours and that rumours of her ill health were exaggerated. Cabinet sources told the Guardian that the BHP Billiton/Repsol bid on Block 23(b) “was unacceptable and there was no way the committee could agree to grant the blocks based on what the companies were prepared to invest.”
Sources said the meeting was held on Tuesday and a Note was expected to be sent to the wider Cabinet at last Thursday’s meeting but the Ministry of Energy failed to make the necessary addendums to the Cabinet Note by the cut-off time last Wednesday, leading to the Note being deferred to Thursday.
In addition, the Prime Minister reportedly wanted the Note to be fully discussed and did not want to take it to the meeting as an ad hoc Note.

If Cabinet goes forward with the recommendation of its energy subcommittee, it would signal the first time in the country’s history there will be exploration taking place in the country’s deep waters.
It also means that yet again one of the country’s majors will fail to receive a block even though it was the sole bidder. In the shallow water bid round, BG was not awarded a block even though it was the sole bidder. This reportedly caused significant acrimony among some members of the government but the Cabinet accepted the recommendations of the subcommittee and it is expected to do the same with the deepwater recommendations.

The move to finally sign off on the blocks comes months after it was expected they would be awarded and mere weeks after former Energy and Energy Affairs Minister Carolyn Seepersad-Bachan was replaced by Kevin Ramnarine, who was promoted from parliamentary secretary. It means Ramnarine will create history by being the first Energy Minister to sign Production Sharing Contracts for deepwater drilling in Trinidad and Tobago. The award of the blocks will have significant implications for T&T. It would mean an increase in activity in the upstream sector and, if drilling is successful, reserve replacement to staunch the resource depletion that has been observed by several energy audits.
Only recently, the Ministry’s Director of Resource Management, Inniss King, explained that the three-month delay on signing off on the blocks was outside of the hands of the technical evaluation committee.

“Like most Cabinets, this one does not have a lot of people with a background in the energy sector, so decisions relating to energy are usually sent to the subcommittee of the Cabinet and then a recommendation is made to the wider Cabinet,” she said. “Thus far, this committee has not met because of scheduling problems.”
King said there were two Cabinet-appointed committees which performed the evaluations:
• A Technical Evaluation Committee comprising staff of the Ministries of Energy, Finance and the Attorney General.
• An Overview Committee chaired by the Permanent Secretary in the Ministry of Energy and comprising officers from the Ministry of Finance and the Solicitor General’s Department and State Companies.