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ENERGY Caribbean newsletter (April 2014 • Issue no. 72)

The final edition of the ENERGY Caribbean newsletter

4 th -­‐ 6 th JUNE

4 th -­‐ 6 th JUNE 2014 Cara Suites, Pointe-­‐à-­‐Pierre, Trinidad & Tobago Course Overview: This three day course provides an opportunity to understand the global oil and gas industry (with a focus upon the Caribbean) while gaining an overview of its physical and technical characteristics. Geology, Seismic, Drilling, Development Investment Criteria, Economics Fiscal Regimes (e.g. Production Sharing Contracts), Joint Venture Agreements Funding, Accounting, Financial Reporting Benchmarking, Mergers & Acquisitions Corporate Governance Who should attend? Oil and Gas Technical Specialists, Accountants, Lawyers, Treasurers, Engineers, Auditors, Service Suppliers, Banking and Insurance Professionals, etc. hc Organised by Hydrocarbon College Course Director: Terry Follen FCMA CGMA Terry is the founder and Principal of Hydrocarbon College. In a 35-­‐year oil and gas career in the UK, Trinidad, India, Russia and Yemen, he has acquired a wealth of experience including: Vice President Finance Atlantic LNG, Finance Director BG India and Country Manager BHP Yemen. exceptional learning experience -­‐ could not have been -­‐ General Manager, Republic Bank Industry enabled him to relate -­‐ Repsol you at ease and encourages -­‐ Staatsoile David Renwick, acclaimed energy journalist, will give a talk on the Caribbean oil and gas scene. Full Fee: US$1,895 Team Fee: US$1,795 (two or more) Early Bird Fee: US$1,695 (payment by 23 rd April) Register by EMAIL: hydrocarboncollege@gmail.com or on-­‐line at www.hydrocarboncollege.com 8

TRINIDAD & TOBAGO BHP Billiton TT closer to a decision on block 3a Uncertain of the real size of its discoveries, the company is taking its time to decide on further development Block 3a, 25 miles off the northeast coast of Trinidad with water depth of 100-300 feet, could be a new productive oil and gas location – if the operator, BHP Billiton Trinidad and Tobago, finally decides that it is worth developing. ENERGY Caribbean has been prodding the Anglo-Australian multinational to declare its hand on 3a for some time, since the potential 135 million barrels of oil in the Kingbird-Ruby discoveries and the 550 billion cubic feet of gas in Delaware could both make a valuable contribution to hydrocarbon output. BHP Billiton T&T’s president, Vincent Pereira, now says “we are getting close to the point where we will have enough data to make an assessment. If we can make 3a work, we will.” Seven exploratory wells and two sidetracks have been sunk in 3a, adjoining the company’s productive 2c block, since it was first taken on under a production sharing contract (PSC) in October 2001. Two oil discoveries were made, with Kingbird and Ruby, and one gas discovery, with Delaware. So why haven’t BHP Billiton T&T and its co-holders Chayong, Anadarko, Petrotrin and the National Gas Company (NGC) proceeded to commercialise them? Another look The challenge, Pereira says, is the true size of both the oil and gas resources. “The extent of the discoveries is what matters,” he told us in an exclusive interview. “These things only work when they are a certain size. So what we decided to do was to take a re-look at the seismic, to reinterpret the seismic to see if it would give us any hints as to what’s going on in 3a.” Further appraisal drilling may be needed before any development can be undertaken – but that can only be contemplated “where we have enough information as a partnership to really understand what it is about 3a that we don’t now understand.” The company should be in that position “hopefully, early in 2014.” Ever cautious, Pereira warns: “I can’t sit here right now and tell you that 3a is commercial.” But the fact that the consortium has been willing to pay the cost of rolling over the market development phase (which 3a is now in because a discovery was made) suggests it is more optimistic than pessimistic. It would be justified in considering itself the most active petroleum company in Trinidad and Tobago at the moment The energy ministry supports the consortium because, as Pereira notes, “it is as interested in trying to understand what’s in 3a as all of us are.” Other projects The 3a reassessment is just one of the projects on which BHP Billiton T&T is working – it would be justified in considering itself the most active petroleum company in Trinidad and Tobago at the moment. It is acquiring 17,717 sq km of 3D broadband seismic over its five deep water blocks – TTDAA 28-29, TTDAA Vincent Pereira 5-6, and 23b – in collaboration with the BP Exploration Operating Company, which needs imaging of its own deep water acreage, blocks 23a and TTDAA 14. At the same time, it is moving ahead with its “Angostura phase 3 development” in block 2c, where it is also the operator, with a view to tapping into the gas discovered by the Angostura well, the first ever sunk in that block. The company has already had gas flowing from 2c via the Aripo discovery, which was made after Angostura but which BHP Billiton T&T and its joint venture partners in 2c – Chayong and NGC (Total at the time) – chose to commercialise first. That entails supplying the NGC with 220 mmcfd from 2011 to 2021. This arrangement is likely to be renewed in the wake of the extension in November 2013 of the PSC for the block itself, up to April 2026. If that happens, the consortium will certainly need backup gas to compensate for any decline in deliveries from Aripo. Pereira explains: “The new supply will help us maintain our gas plateau. Reservoirs decline so you have to keep filling in, and this is what Angostura will do. It extends our plateau, which is the reason we needed the PSC extension because our productive life is beyond 2021.” Reserves in Angostura amount to 400-500 bn cf, and production will be about 100 mmcfd from the second half of 2016. Development will take place through subsea wells tied back to the gas export platform in 2c, into which Aripo gas already feeds Courtesy BHP Billiton Energy Caribbean April 2014 9

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