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Exploration and Production Division Report

In 2005/ 2006, Petrotrin’s upstream operations recorded a successful year once again with net profits of TT$684.5 million (unaudited). Vice President Exploration and Production Mr. Victor Mitchell gave this update while addressing technocrats of the Ministry of Energy and Energy Industries and the Ministry of Finance at the Annual Technical Meeting held at the Petrotrin Learning Centre on April 4.

Victor Mitchell delivering the opening remarks at
the start of the Annual Technical Meeting

In his address, Mr. Mitchell stated that the Division’s net profits of TT$684.5 million resulted mainly from high crude and gas prices. During the period, WTI crude price averaged US$66.05/ BBL and netback wellhead gas price averaged US$5.48/ MCF. Consequent to the high crude and gas prices, the Company contributed significantly towards Government’s revenues for the year via royalties and taxes. Total Government Take was $4.35 billion.

The Exploration and Production (E&P) Division took advantage of opportunities presented by these high oil and gas prices by investing in growth initiatives, production enhancement projects and the upgrade of facilities. There was also an increased focus on HSE project in an effort to achieve compliance with new regulatory standards. 

During 2005/ 2006, total equity oil production was 59,405 BOPD and gas production was 59,405 BOPD and gas production was 142.4 MMCFD leading to an overall oil and gas production average of 83,965 BOEPD, a slight decrease of approximately 147 BOEPD or 0.2% from the previous year. 

Production decreased by 6% in Land and Galeota by 3% in Trinmar, while equity production from Joint Ventures increased by 7% compared to the previous year. 

Total proved reserves at year-end were 538 MMBOE, an increase of 34.4MMBOE or 7% from the previous year. The major increase was in Trinmar (49.6MMBOE) due mainly to stronger drilling programmes and increased crude prices. 

“These studies resulted in the proposal of several drilling candidates and drilling of proposed locations in the Barrackpore field commenced,” he said. “The Trinmar Main Field Red Marker Waterflood study was completed and a pilot waterflood is proposed.” 

A Development Plan was also completed for the Southwest Soldado field in Trinmar, which outlines a development scenario for reactivation of this field.  

Work on the Upper Morne L’Enfer (UMLE) Steam Flood Expansion project in Forest Reserve continued during this period. Thirteen (13) wells were drilled for the project during the year. Final works were in progress at year’s end and steam injection commenced in November 2006 in the current fiscal year. 

Various studies of the Trinmar Heavy Oil area were conducted during the year with the aim of monetizing the significant reserves in the area. 

In the operated areas, Land & Galeota and Trinmar, E&P continued to focus on increased drilling and workover activities, arresting production decline, platform and other infrastructure upgrades, addressing safety and environmental concerns and undertaking works towards achieving HSE compliance with new regulatory standards.

“Production from these areas averaged 55,266 BOEPD, a decrease of 2,284 BOEPD or 4% from the previous year with Land and Galeota accounting for a decrease of 1,176 BOEPD or 6% and Trinmar accounting for a decrease of 1,108 BOEPD or 3% from the previous year,” Mitchell said. 

Mr. Mitchell also placed a strong emphasis on safety, which he said had escalated to the highest priority in E&P operations. 

Ministry of Energy Staff at the Annual Technical Meeting

“The Company’s declared policy of zero accidents was manifested in the proactive decision to take all the Company’s workover rigs engaged in onshore operations out of service for several months during the year to undertake a comprehensive maintenance programme, including the replacement of key components with new equipment, and re-training of personnel to ensure compliance with safety standards and safe working methods,” he said. “While this impacted adversely on the Company’s production target for the year, we were able to realize a significant reduction in accidents and equipment failure after the recommissioning of these workover rigs and a preventative maintenance programme has been implemented. Petrotrin’s Drilling Rig 1 was also taken out of service from February 2006 to undertake major repairs to meet safety standards. During this period the drilling crew was assigned to one of the Company’s workover rigs. The rig remained out of service at year’s end and is expected to be back in service later this month.” 

He praised Joint Venture (JV) successes stating that for the year, equity oil production increased by 946 BOPD from the previous year to 4,177 BOPD. Equity JV gas production increased by 4.5 MMCFD from the previous year to 115.6 MMCFD. This represents an overall JV production of 24,103 BOEPD, which was an increase of 1,719 BOEPD or 8% over the previous year. Lease Operatorships and Farmouts contributed an average of 6,184 BOPD for the year. 

In 2006/ 2007, the Exploration and Production Division continues to focus on increasing production and reserves, restructuring our production portfolio to increased gas production and increased production from growth assets, reducing operating costs and improving HSE performance.