BP, Shell and EOG Compete for Acreage in Trinidad’s Oil and Gas Auction.
Trinidad and Tobago recently concluded its 2023 shallow water auction, attracting bids from industry giants BP, Shell, and US shale producer EOG Resources. The auction, which closed on Monday, received a total of six bids on four exploration blocks.
Energy Minister Stuart Young announced that the winners of the auction would be revealed in four months, highlighting the significant interest from major players in the oil and gas sector.
Among the blocks, the Modified UC block garnered bids from all three companies. Situated near the Teak, Sammaan, and Poui producing fields, the Modified UC block holds strategic value for further exploration and development.
Trinidad and Tobago, known as Latin America’s largest producer of liquefied natural gas (LNG), boasts significant capacity for LNG production. However, in recent years, its plants have operated below full capacity due to gas shortages.
In an effort to revitalize interest in its energy sector, the Trinidadian government offered 13 blocks for bids in October 2023. However, Monday’s results revealed that only four of the blocks attracted bids, all from companies already operating in the region.
EOG Resources submitted bids for three blocks, including the Modified UC, the Lower Reverse L, and NCMA 4. Shell, on the other hand, placed a bid solely on the Modified UC block. BP, bidding on the Modified UC as well, also submitted a bid for NCMA 2, demonstrating its interest in expanding operations beyond the Columbus basin.
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Trinidad’s government implemented several changes to fiscal terms in an attempt to attract more bids following the disappointing 2019 bid round. These changes included reducing tax liabilities for shallow-water producers, increasing cost recovery to 60%, cutting the windfall tax, extending the exploration period to eight years, and lowering the bid fee.
Overall, the participation of industry giants like BP, Shell, and EOG Resources underscores the potential of Trinidad and Tobago’s energy sector and its attractiveness to major players in the global oil and gas market.
