How significant is T&T’s deepwater potential, and how feasible is extraction?
VINCENT PEREIRA: To have a gas discovery in T&T’s first frontier deepwater well is a good sign, and we certainly see tier-1, multi-trillion-cu-feet potential. However, the reality is that deepwater is very expensive to explore and develop. Therefore, we need to see sufficient scale to attract major investments and provide a reasonable rate of return for the risk that is involved. We remain very positive and encouraged, however, and are preparing for phase two of the drilling programme, which we hope to start in early 2018. We have clearly entered a new normal, with sustained low global oil prices. But, it also creates immense opportunity for innovation and increases in productivity. So, the feasibility of developing deepwater resources is actually decreasing on a cost basis, to the extent that we are confident that they can be developed at this price range. In terms of labour, T&T has been involved in this industry for over a hundred years. While there may be a need for additional training, it will be on top of an already strong resource base stemming from the country’s long history as an energy producer. Some of this will be tested through deepwater exploration programmes, but this is a global industry, and so the ability of international capability to come and build local capacity is there.
What improvements need to be made to enhance T&T as a destination for international investment?
PEREIRA: The capacity and capability of regulating agencies is a huge enabler for investment, and it determines whether a country is competitive or not. As things have tightened up, as capital has become harder to access, and as projects have gotten bigger, the need for rapid execution – particularly on the front end to get things moving – has become more significant. Investors are less inclined to wait, as there are other opportunities around the globe competing for their capital. If we lack competitiveness at the point of entry, the capital will go somewhere else. But, it should be acknowledged that companies are still investing in T&T, especially at a time when many other countries are not receiving the same focus. Now, we need to ensure that the next wave of investments is being lined up, which is contingent on the efficiency of the investment regime.
How can local energy service companies enhance value proposition and better position themselves?
PEREIRA: The reality is that it is an extremely competitive environment, but T&T has already demonstrated it can support energy service companies that compete on a global scale. The template is already there, and we have demonstrated the abilities of T&T energy service companies. In terms of accessing a new frontier like deepwater, the notion of creating joint ventures and partnerships with those who have done it before can be a very quick way of accessing expertise and business-building capabilities. Just recently every upstream player – and some downstream players – signed a charter with the Energy Chamber of T&T regarding local content. So we are all committed to playing our part to expand and encourage local capability in being competitive for regional and international work.
What effect is the lack of comprehensive and transparent data management having on planning?
PEREIRA: There are negative and positive aspects of this question. It is not a simple conversation, as people invest tremendous amounts of money to acquire data, and there are some short-term advantages that come with squiring information. But I have never seen more collaboration in T&T’s energy industry than at the present time. Changes may be a result of how the sector has matured in correlation with the local environment; regardless, it is a positive development, and we should look to utilise the spirit of collaboration that has emerged in the industry, harnessing it to open the discussion about data and other industry issues.
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