Energy Minister Franklin Khan may have departed this world on Saturday, April 17 but if we are to judge by the last full length interview there was some unfinished business he wanted to conclude.
According to Minister Khan one of things he wanted to accomplish was an increase in crude oil and natural gas production.
On the issue of natural gas production the Minister told the Business Guardian that its long term future was in T&T’s deep water, but he expected that by 2025 the country could return to near full capacity of over 4 billion cubic feet per day.
For that to happen and maintained after 2025 he was banking on two things, BHP Billiton bringing on its Northern deep water acreage and Royal Dutch Shell developing its Manatee field, which forms part of the cross-border giant 10 trillion cubic feet (tcf) Loran/Manatee discovery.
In his last full length interview before he passed away Khan told the BG: “To come back close to 4tcf we will have to wait until 2025 when Manatee is on full stream.”
At the core of Khan was his understanding and love for geology and during his March 5th interview he took significant time to explain what he felt was a major challenge for T&T and how it may be solved.
On the gas shortage he explained, “The core reason for that, Curtis, is a sub-surface reason….In any basin, based on seismic, you drill the large structures first. So in the historical evolution of a basin, the large fields are found first and then you look for subtle traps and smaller fields.”
The late Minister added; “There was a time when this country’s reserves to production ratio was 30 years. That’s when we got into the monetisation of gas. We built Point Lisas and when gas was still in surplus, so to speak, we went into LNG. But there isn’t an unlimited supply of geological provinces to explore. So in the Columbus Basin, I will be the first as a geologist to admit, that we are in the mature phase of the basin. So the very likelihood is we are going to continue to find more and more small fields…We go on the production side, there is something called natural decline. Gas fields decline at between 12 to 15 per cent per annum.”
To solve that problem Khan said more exploration was needed in the deep water and also the development of small pools of gas. Both of which he planned to address in the next year with three bid rounds.
Khan’s unfinished business included a deep water bid round carded for late this year or early 2022.
“I am not justifying the six years but now is the most opportune time based on the historical cycle of the exploration programme to come out with a deep-water bid round. And a deep water bid-round was not put forward in the last five years because of negligence,” he argued as the BG challenged him on the lack of a deep-water bid round during the last administration
Khan said it must be remembered that when the deep water bid-round went out in 2014 nine blocks were taken based on a limited amount of geological data available.
He said in the last six years BHP had an intensive exploration programme.
Khan explained, “They drilled 11 wells. They are now in the phase of relinquishing the acreage that they don’t want, but with a voluminous data set, that adds value to the acreage. We have been successful in negotiating with BHP that all the seismic will become available in the next bid round. None will be classified, even the seismic within their acreage…So that is why I am saying all things being equal by the end of this year we will go out with another deep water bid round and the only thing to stop it is the global economics.”
On the shallow-water bid round the Minister said he intended amending the fiscal terms to make the blocks that were rejected in the last bid round more competitive.
“The shallow-water bid round is telling us that we have to come up with a new economic model for marginal and stranded gas and we are about to start to do that.” Khan said.
He added, “I understand so, we are going to re-look at the terms and put the blocks back out.”
Khan was very extensive in his interview and gave a detailed breakdown of how the country would return to gas output that would meet the demand profile.
He said, “This is the state of play. In 2021, we have Matapal coming on stream. That is bpTT 300 mmscf/d (million standard cubic feet per day). Shell/Barracuda and BHP Ruby.
In 2022, the Cassia C Compression platform project will come on stream.
Touchstone we hope could give us about 150 mmscf/d on land and then coming to 2025 we have Manatee.”
He added, “As I speak we are finalising the Production Sharing Contract with Shell and Shell is working on a development model as to the type of infrastructure they have to put down. I’m telling you this for the first time probably, we are also looking at probably building some capacity that in the event, when the Venezuelans decide to develop Loran, probably post 2025, they may look at the option of monetising that gas across the border in T&T.”
On the question of oil Khan was convinced that there was more oil to be found on land.
He planned to ensure T&T’s crude oil production increased to over 90,000 barrels of oil per day (bo/d) by 2025 with most of the increase coming from state-owned Heritage Petroleum Company Ltd.
“We have a forecast here that says we can reach 92,000 in 2025. Unless we find new big fields. Remember this is on the periphery. Remember I still want to initiate an exploration programme for the Cretaceous, that was the southern basin with Exxon, and I trying to put the logistics in place for that.”
The Energy Minister said he was told that there was interest by the world’s largest oil and gas company to look again at T&T’s on land province.
“My understanding is that Exxon may be interested in it because its Cretaceous oil they finding in Guyana and Suriname you know. It is not the same basin, but we are already part of the eastern Venezuela basin. So as a long term strategy, that could be on the table, but then your time-line of the lifetime now of liquid fuels seem to be shortening, especially Guyana’s aggressive development plan which is driven by Exxon and I see the same thing is going to happen in Suriname,” Khan noted.
The late Energy Minister said there is fairly good justification to go after the Cretaceous “if we take a second look with the new technology that is available, the new thinking in geological modelling it is worth a try again.
“Curtis, imagine Exxon ran a Cretaceous exploration programme with only 2d seismic. That was in the 80s, I worked on that project, I was in Houston for two years and the team leader of that project contacted me last year, he is now retired. He said he has done some work in Papua New Guinea, you know they finding big gas there, and he said ‘I will like the opportunity to come back to Trinidad to take a look at the basin again’, so I think I will take up his offer shortly,” Khan said.
He did not live to take up the offer.
With respect to increased production from Heritage, Khan said the company’s first port of call was to stabilise its production which it has achieved.
Khan said, “I think they have done that so now I am speaking to them very regularly and I have told them I want a laser-beam focus on production and they are doing that. They have evaluated the Trinmar acreage, there is the Jubilee field that they are going out to a joint venture for, there is South-West Soldado which they will be going on a joint venture for, to bring in the investment level, to bring in the production.”
According to the late Energy Minister Heritage will also seek to increase the lease operatorship/farm-out onshore and he has told them they have to come up with their own drilling programme for the land-based assets.
The minister also promised to have a bid round for further deep exploration in what is called the Siparia syncline for Herreras, similar to what Touchstone has made several discoveries in.
He said, “This will probably take about two years but I can see Heritage ramping up to over 60/70,000 barrels of oil per day by 2024.”
With respect to the Jubilee field Khan said while Heritage had gone out to market with a Request for Proposal (RFP) it was now going out to tender the field.
“They are having a lot of interest in it. Jubilee is a heavy oilfield eh.”
But for Khan his greatest project which he wanted to complete was the creation of a new cadre of energy professionals at the Ministry of Energy.
He told BG he believed in the young people and that they will have to take the Ministry and country forward.
Khan started the process with the hiring of dozens of young people in the Ministry, he will now leave the business of mentoring others and he has finished his business with us.