Exploration and Production Division Gives Account at Annual Technical Meeting

 At the recent Annual Technical Meeting with the Ministry of Energy and Energy Industries, it was explained that 2008/2009 was the fifth and final year of the Company’s 2005 to 2009 5-Year Strategic Plan. During this period the Exploration and Production Division continued to implement strategies and initiatives towards realisation of the objectives as specified in the Strategic Plan. These included:

• Addition of oil and gas reserves
• Increasing oil and gas production
• Improving the production portfolio to comprise more gas and less mature assets
• Improving health, safety and environmental standards throughout the upstream operations

It was pointed out that these initiatives had a mixed degree of success in their respective implementation, particularly as the Company sought to focus its operational strategies during the year to meet with the challenges of the global economic and financial crisis.

In the context of an average WTI crude price of US $57.44 per barrel for 2008/ 2009, Petrotrin’s upstream business realised a net after tax (unaudited) loss of TT$47 million. Average WTI crude price for the year was 47% lower than the previous year. Average gas price for North Coast Marine Area gas was us$2.61/mcf; and for Central Block gas was US$1.86/mcf, compared to the previous year’s overall total average of US$6.55/mcf. Government’s take from the upstream operations, via taxes and royalties was TT$2.6 billion or 40% of the upstream gross revenue.

Total equity oil and gas production averaged 74,840 barrels of oil equivalent per day for the year and this comprised 48,024 bopd and gas production of 155.53 mmcfd. This represents a 1% increase in oil equivalent from the previous year, with gas production increasing by 8% and oil production decreasing by 2.5%.

The main contributors to the overall modest decline in oil were:

• The partial divestment of Galeota into a new joint venture arrangement, which took effect from May 2009.
   
• Land production, which declined by 581 bopd, even as efforts continued to sustain these mature fields, with higher than expected production from the EOR drilling that was undertaken early in the fiscal period.
   
• Trinmar production, which showed a relatively small decline of 108 bopd as production enhancement efforts continued and several previously drilled wells were completed and put on production.

Gas production increased in 2008/ 2009 mainly the SECC, NCMA and Central Block Joint Ventures, as supplies were adjusted to meet increased demand.

Total proved reserves at year end were 378 mmboe, which was a downward revision of 15% from the previous year. This write-down in the reserves estimates was attributable mainly to fewer wells in the Trinmar drilling programme, the further deferral and consequent non inclusion of the Trinmar Red Marker Waterflood project, the higher drilling costs on Land, which negatively impacted the economics of the drilling programme and the normal write down due to production, particularly in he Joint Venture gas assets.

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