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posted 8 Jun 2020, 21:21 by Gerry Kangalee   [ updated 9 Jun 2020, 05:45 ]
Gerry Kangalee
The privatisation of the remaining oil holdings of the State is well on the way to completion. This process began in 1989, six months after The NAR government entered into entered into a fourteen (14) month standby arrangement with the IMF to the tune of US$99 million. Since that time there has been a gradual privatisation of oil production.

When Petrotrin was busted up, the Heritage Petroleum company was formed to deal with exploration and production, both on and offshore. The jewel in the crown is the Jubilee field.  

According to the Guardian of April 11 2012, on March 30th, ‘Prime Minister Kamla Persad-Bissessar announced that Petrotrin had made a discovery of a 48-million-barrel field in Cluster 6 of Trinmar's 
southwest Soldado acreage. She declared that God was a Trini and that as a result of the Jubilee discovery, Government would be in a position to make economic decisions faster because of the
Royalty Lease Evaluation Distillation Data an Underutilised tool ...
availability of additional funds.

She said: "So what does it now mean for the man in the street, for the citizen of T&T? In a phrase, if I would sum it, I would say better times in the best of initiatives that will benefit you the citizen of T&T." Trinmar's chairman Lindsay Gillette also announced that the discovery was made close to existing infrastructure and in shallow water, allowing the company to produce the field within a year”.’

That was eight years ago. Not a litre, far less a barrel of oil, has been produced. What has happened instead is that the integrated oil company, Petrotrin, has been dismantled, Heritage established and they are now seeking “joint partners” (read foreign capital) to develop the field.

While, all this noise was being made about Jubilee, the exisisting operations were handled awfully. 
The assets of Heritage are in a bad way. The fancy way of saying it is that asset integrity is under question. Years of poor maintenance has taken its toll. Without the expenditure of massive amounts of money deterioration of assets will continue. The government has already signalled that it is not prepared to invest the necessary funds to bring Heritage up to speed. Yet a billion dollars was invested in refurbishing the South West Soldado fields with nothing to show for it. Wells were drilled nd capped without flow lines attached to them. Money flowed like water, but did not result in one cent going into the treasury.

According to an astute observer of production matters; “When one considers the age of the infrastructure in terms of pipe lines and other equipment associated with production, we must realise that the company is indeed challenged. Added to that, the cost of abandoning a well completely is a very costly exercise. An offshore well, of which there are approximately 200, costs about $17M to cap off.” This observation was made long before there was any move to mash up Petrotrin.

According to the famous Lashley Report, which did not call for the dismemberment of Petrotrin “there are endemic and critical safety problems with its well stock, well production equipment, logistics, platforms, pipelines and storage tanks. Turning around operations will require significant expenditure and expertise as well as know-how in integrity management and late field life recovery. Petrotrin’s recent history of on-going leaks and seeps would suggest that it is almost a “burning platform”

The report went on to say ‘The E&P assets were deemed to be at high risk and in need of urgent attention. There are asset integrity initiatives within the next 10 years to upgrade berths, sea lines, port facilities, tanks, pipelines and on the E&P side to implement a repair program for pipelines, tanks, platforms and for the safe and proper abandonment of wells. While these initiatives would equate to s
ignificant improvements in asset integrity, the cost is estimated at TT 3.4 Billion”.  

The chickens are coming home to roost.  The recent rupture of tank no. 27 in Point Fortin during pressure testing and the resultant flow into surrounding areas of 600,000 gallons of water and some hydrocarbon residue, caausing respiratory problems for residents and the knocking out of the the desalination plant, has rammed home the situation with a vengeance. 

So Heritage, already trying to confuffle one's brain with their sleight of hand financial statement now seeking expressions of interest with hope of attracting what they term the “right partners” for developing the Jubilee field which will need “significant capital injections and the application of specialised technology."  To this end Heritage is inviting local and international exploration and production companies to participate. So we have come full circle. From the plantation to the plantation! 

Tony Bedassie’s statement made in 2016 has hit the bullseye. He saidOne does not allow an entity with such a significant direct impact on government revenues to falter while sitting idle and doing nothing, except, of course, if they have another hidden agenda. Maybe that's what they want. Let it fail, so that they can justify closure and bringing in private ownership.
Gerry Kangalee,
8 Jun 2020, 21:21