By Sue-Ann Wayow
EXXON Mobil and the government of Trinidad and Tobago has officially signed the agreement for the production sharing contract for Block Trinidad and Tobago Ultra Deep 1 (TTUD-1).
The signing ceremony took place at the Diplomatic Centre in St Ann’s on Tuesday.
Prime Minister Kamla Persad-Bissessar delivered the feature address saying her government will pay special attention to regulatory framework and enhanced measures to ensure competitiveness.
In attendance were Attorney General John Jeremie, Minister of Energy and Energy Industries Dr Roodal Moonilal and Minister in the Ministry Ernesto Kesar and other Cabinet members, Charge d’ Affaires at the US Embassy Dr Jenifer Neidhart de Ortiz -, Vice President of Global Exploration ExxonMobil Upstream Company John Ardill, South America Exploration Manager of Exxon Mobil Paul Riley and other ExxonMobil Executives and permanent secretaries.
The historic signing takes place more than 20 years since the Texas based oil company stopped operating in Trinidad and Tobago.
The prime minister said Trinidad and Tobago was not waiting for the end of any energy age and will lead the next chapter by innovating, investing, and expanding into new frontiers.
She said, “Today’s signing underscores our government’s commitment to strengthening national energy security and to unlocking the full value of our hydrocarbon resources through disciplined policy, competitive terms and trusted partnerships.”
Stating the energy sector was the bedrock of the economy at its peak in the early 2000s, the sector accounted for nearly forty-five per cent of Gross Domestic Product (GDP), over forty per cent of total government revenue and around eighty per cent of foreign-exchange earnings.
Over the last decade, however, sustained declines in oil and gas production compounded by lower commodity prices reduced the sector’s contribution to the domestic economy and eroded public revenues, Persad-Bissessar said.
The signing between government and Exxon Mobil takes place exactly 100 days since the new government led by Persad-Bissessar was sworn in.
She said, “We treated this downturn as a clarion call: to restore momentum, renew confidence, and re-establish Trinidad and Tobago as the energy hub of our region.”
Persad-Bissessar said, “Our renewal agenda is clear. We are implementing strategic policies to optimise our petroleum resources so that the people of Trinidad and Tobago the rightful owners receive equitable returns, while investors earn fair and predictable profits. The foundation is a regenerative energy economy: resilience now, sustainability over the long term.”
To be more competitive in the industry she said government will: maintain an attractive fiscal framework aligned to risk and reward, enhance operational efficiency across exploration and production, reduce production costs by enabling technology and logistics and streamline regulatory oversight without compromising standards.
“I want us to really look at the regulatory framework, the legal framework so we can make this happen in the shortest possible time…our laws are far outdated,” Persad-Bissessar said.
The ease-of-doing-business programme in energy will also: remove administrative bottlenecks, modernise licensing and approvals, clarify legal frameworks and improve transparency at every stage of the value chain.
“With this approach, I fully expect today’s ceremony to be the first of many of such ceremonies,” she said.
Persad-Bissessar also took the opportunity to remind attendees of strides her government made in the energy sector during her first tenure as prime minister from 2010 to 2015 with the latest being in December 2014, finalising two further deepwater Production Sharing Contracts—Deep Atlantic Area Blocks 3 and 7—with a B H P Billiton and B G consortium, with B H P as operator.
“Block Trinidad and Tobago Ultra Deep 1 now stands on a solid foundation. Our basin knowledge meets Exxon Mobil’s ultra-deepwater capability. That is how we turn prospects into production and potential into lasting national value for our citizens.”
She also repeated that Trinidad and Tobago’s energy sector was open for business with investor confidence from global majors remains strong, as evidenced by Exxon Mobil’s participation.
“It is estimated that Exxon Mobil will incur expenditure of an estimated US $42.5 million in the mandatory first phase of the project. With success, I am told, the projected development cost could be between US $16.4 billion and US $21.7 billion,” Persad-Bissessar said.
She wished Exxon Mobil success in their endeavours as many extensive deepwater acreage remains unexplored.
“We will therefore maintain strong momentum in exploration across all domains deep water, shallow water, and onshore,” Persad-Bissessar said.
The Ministers of Energy have been mandated to:
- Accelerate the responsible exploration of unexplored land and marine acreages;
- Continuously improve acreage-award processes; and
- Undertake a comprehensive review of the oil and gas taxation regime
Persad-Bissessar extended congratulations and thanks to all involved in meeting the necessary deadlines and bringing the agreement to fruition.
Also speaking at the ceremony which included cultural and musical items were Dr Moonilal, Kesar, Ardill and Riley.
Ardill said, “This event sets a new benchmark in global PSC signings.”
Giving a history of the industry he said Exxon Mobil has learnt a lot about the Caribbean offshore geology since the company’s involvement in Guyana.
“Our plan and my commitment to you here is to bring that experience to benefit the people of Trinidad and Tobago and we see great potential to replicate the Guyana success here,” Ardill assured.
