Exploration - Deep Water Acreage - (Should T&T develop this area?)

The question succinctly posed - Exploration -  Deep water acreage - should T&T develop this area?

This question has been asked for ages. It was asked in 1992 when NGC and CABOT decided to develop Atlantic LNG, and its been asked even before that when the government of the day allowed for bp to reenter Trinidad territory after the merger with Amoco, Its been asked since the beginning of the labour movement and I suspect it will be asked for another decade before we ask the right question vs the obvious question.

What's the right question? Well its quite a simple one; what else should we be doing? Thats the right question!

We need to go after the deepwater wells. We've no choice. Presently we are unable to meet consumption demands and there is a growing threat with emerging markets from Qatar, Brazil and US Domestic explorations and production.

Therefore the obvious answer to the obvious question is yes.

So what else should we be doing? Decisions have already been made to pursue crude (oil) pay zones to reengage this market. But again that another obvious answer. its obvious because the world's inhabitants are hooked on hydrocarbons. Its the heroin of the planet and there is no cure for our thirst for energy. So the idea is to treat with the planet's inhabitants as addicts and weed them off of this...drug.

In weeding any addict off of a substance there are basic principles to follow:

- Substitution
- counseling
- Strategy revision
- Analysis
- Reengagement

We substitute the 'drug' with a healthier vice. for addicts it maybe sports, art etc. in the context of the energy sector we need to pay closer attention to probable alternative energy solutions. Solar, Wind, Hydro, etc. What ever it maybe. there are pros and cons but without thorough assessment one cannot justifiably ignore it as an option. A simple example could be to reduce our domestic consumption of hydrocarbons by 'substituting' it and thus allowing for us to maintain our ability to satisfy external customer demands.

Sounds terribly simple? The answers to the worlds problem are often more simple than we chose to admit. Over complicating them seems to justify the existence of those that make a living off of it....food for thought huh?

Counseling is critical. The education of the people to be energy conscious is one that needs to be employed continuously. As its easy for addict to fall off the wagon its easy for a people to loose its way. Trinidad is a living example of that present day with our ill placed faith into a headless government and opposition alike.

Trinidad may need to suspend its environmental laws and other restrictions which dissuade investment for a period of two years in the first instance.

During this period we must heavily market the country's limited bureaucratic restrictions and ease of doing business and tax holidays for specific types of business.

Given the government's large majority it can definitely undertake such ventures, however, the penchant for political obstructionism makes it difficult to convince investors to come to Trinidad, given the dangerous precedents recently established not to honour contractual arrangements and other projects that were in advanced stages of implementation.

The old model of a government or elected administration operating in a winner takes all environment are over, as the Greek and Italian bail out models recently demonstrated.

All political stakeholders and even special interest groups will be mandated to come together in the hope of anything getting done and giving confidence to foreign investment. In the Greek/Italian model everyone was mandated to sign off on all agreements for future help, or virtually die a natural economic death.

LOWERING THE RISKS

Regardless, there is no going forward if all that currently obtains and obtained in the past remains. Kevin Christian Ramnarine, Minister of Energy and Energy Affairs is hoping that the next bid round for deepwater acreage does not produce the same un-encouraging result as in 2010 and one has to agree. Ramnarine intends to do much better than his predecessor and is looking into a more attractive fiscal package as that acreage auction attracted bids for only three of the 11 blocks offered. What that translates to and how it benefits the people of this country remains the issue of note, and one that should dominate the decision and not just the drive to drill.

[Many thanks to Mike Shand and David Fraser for their assistance with this piece]