JAVED RAZACK
This piece seeks to summarise the major happenings in the local energy sector for 2023.
Trinidad and Tobago’s 2023 budget, presented in September 2022, was based on oil at $92.50 per barrel and gas at $6 per mmbtu. WTI oil price averaged $78 during 2023 ($95 in 2022), with Henry Hub natural gas averaging $2.56 (this was $6.45 in 2022).
The 2024 budget is based on $85 for oil and $5 for gas.
The budgeted numbers appear high based on the last few months of 2023, and we will see the impact in 2024 on the actual vs expected revenue numbers.
Crude oil plus condensate production averaged just under 55,000 barrels per day for 2023, while gas production was 2.6 bcf/d for the same period. This is slightly down from 2022 (58,500 and 2.7).
The larger local players – BP, Shell, EOG, Perenco, Woodside and Heritage – have had a lot of activity over the year, the highlights of which we have tried to document below. Meaningful new gas has come online from Touchstone onshore, and we look forward to more from them. On the downstream end, we are happy to see Atlantic restructuring completed and new gas sales contracts with the Pt Lisas plants and NGC.
Regional geopolitics have dominated the headlines over the last few months. Over the year, Venezuela and TT have been progressing the negotiations on the Dragon gas field, getting support from the US to make this happen. However, the last two months have cast doubt on the project after Venezuela claimed the Essequibo region as their own, an issue that has arisen time and again for over the past 100 years. Fears of annexation, military action, US intervention, Russian instigation and many other factors have been expressed and discussed throughout the region. A meeting organised by Caricom in December appears to have put a temporary truce on the matter. Just before Christmas, we understand a licence has been granted by Venezuela for the Dragon project.
Meanwhile, ExxonMobil in Guyana began oil production from its third offshore asset, the Prosperity FPSO, which over the next few months will bring the country’s production up to over a whopping 600,000 barrels of oil per day (it’s currently at 500,000). The next three FPSOs are expected to be online by 2027, pushing Guyana to over 1.2 million barrels per day. At this point, they will be the highest oil producer per capita in the world.
Just a little further south, Suriname is following Guyana’s trajectory. Their first offshore project is expected to be sanctioned in 2024, after which Total Energies will be fast-tracking this to first oil in 2028. 200,000 barrels per day is expected, with an investment tag of US$9 billion. Several other discoveries are in the appraisal and evaluation phase.
So, our neighbours are moving full speed ahead with their offshore developments, which appear to be endless at this stage.
TT is focused on getting new gas from Dragon, Manatee (Loran too if we are lucky), Calypso (deepwater) and smaller bits onshore and in our shallow waters.
TT signed a few deepwater blocks in 2023
