PORT OF SPAIN, Trinidad, CMC—Trinidad and Tobago issued licenses for five blocks on Friday arising out of the 2022 onshore and nearshore competitive bidding round, insisting that it is seeking to maximize the country’s hydrocarbon resources.
Energy and Energy Industries Related Minister Stuart Young told the signing ceremony that the blocks are located in the central and southern onshore areas of Trinidad and have significant untapped potential for future discoveries.
“The grant of these licenses will allow our country to progress current opportunities within these acreages and identify new prospects. This exercise is a part of the government’s ongoing program to maximize the exploration and development of the country’s hydrocarbon resource,” Young said.
He said the government has taken into account the industry’s concerns and created a fiscal environment that supports investment in the upstream and provides a just return to the state as the resource owner.
Young said that the oil and gas sector continues to significantly contribute to the socioeconomic development of the Twin Island Republic, noting that “it is a major revenue earner, a major foreign exchange source, and also a key contributor to domestic downstream activity.
“We must continue to foster investor participation to maintain a vibrant upstream sector. Hence, our continuing program promotes ongoing exploration of land, shallow water, and deep-water regions to sustain our energy sector. To this end, we remain steadfast in our commitment to leaving no hydrocarbon molecule behind.”
Young said the licensees’ award results from a very “comprehensive and transparent process” and that the 2022 onshore and nearshore competitive bid rounds opened on July 8, 2022, and remained open for six months.
He said companies were granted six months to submit a bid on any of the 11 blocks available and that upon the closure of the bid round, 16 bids were received for eight blocks.
He said the bid proposals were reviewed by a technical evaluation committee and an overview committee established by the Cabinet, which included representatives of the Ministry of Energy and Energy Industries, the Ministry of Finance, the Office of the Attorney General, and the Ministry of Legal Affairs.
Young said that the reports and recommendations of these Committees were then submitted for the Cabinet’s approval.
He said that arising from this process, the Cabinet authorized the Ministry of Energy and Energy Industries to negotiate exclusive agreements with the preferred bidders on the terms of the licenses.
Young said the negotiations were guided, in part, by the provisions of the Petroleum Regulations (Onshore and Nearshore Competitive Bidding) Order 2022 and the terms and conditions outlined in the Model 2022 Exploration and Production License.
He said the negotiation team met with the preferred bidder for each block over eight months, and at the end of the period, there was agreement on the license terms between the government and the preferred bidder on five of the eight blocks.
“Based on our recommendation, Cabinet agreed to award licenses for five of the eight blocks, namely the Aripero, Buenos Ayres, Charuma, Cipero, and St. Mary’s Blocks, for which negotiations were completed. The negotiation on the terms of the licenses for the remaining three blocks, namely the Tulsa, Guayaguayare (onshore), and South West Peninsula (onshore) blocks, are ongoing, and we expect to make a decision soon on this matter,” Young added.
He said the key provisions of the approved licenses are the financial obligations to the state and the work program to be undertaken by the licensee.
Young said the financial obligations include a signature bonus, production bonus, technical equipment bonus, environmental bonus, royalties, minimum payments, and annual surface rent.
“This is a crucial point to note. One would expect to find These standard terms and conditions in exploration and production licenses: signature bonuses, production bonuses, technical equipment bonuses, and environmental bonuses.
“So, when you hear persons out there try to start a narrative that something is untoward with Trinidad and Tobago in our nearby license, for example, with Dragon, paying a bonus, there is nothing unusual with that.”
Young wanted to reassure citizens that “we negotiated those downwards when we did those negotiations.”
He said provisions have also been made for training, research, and development contributions, along with national scholarships.
Young said the successful licensees have committed to minimum exploration work programs, including drilling at least 25 new exploration wells, reprocessing 2D and 3D seismic data, and acquiring onshore 2D seismic.
Young said exploration activity on these respective blocks will be conducted over six years.
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