BP, Shell and EOG vie for land at Trinidad oil and gas auction

BP, Shell and EOG vie for land at Trinidad oil and gas auction
BP, Shell and EOG vie for land at Trinidad oil and gas auction

Trinidad and Tobago received six bids from BP, Shell and US shale producer EOG Resources for four oil and gas exploration blocks when the 2023 shallow water auction closed on Monday.

Trinidad plans to announce the winners in four months, Energy Minister Stuart Young said as the auction closed.

The three companies bid for the Modified UC block, which is close to the Teak, Sammaan and Poui production fields. There were no other bidders.

Trinidad is the largest producer of liquefied natural gas (LNG) in Latin America, with an installed capacity of 15 million tonnes per year of super-cooled gas. It is also one of the world’s leading exporters of methanol and ammonia, but its plants have operated below maximum capacity in recent years due to a lack of gas.

In October 2023, the Trinidadian government issued a tender for 13 blocks. Monday’s results mean nine of the 13 blocks received no interest and all bids came from companies already present on the Caribbean island.

EOG Resources has bid for three blocks, Modified UC, Lower Reverse L, which lies west of Shell’s Manatee discovery and on the border with neighboring Venezuela, and NCMA 4, in an area operated by Shell .

Shell bid for Modified UC, while BP, which bid for Modified UC, also bid for NCMA 2, which is north of Trinidad and not in the Columbus Basin, where the company operates since the 1970s.

Trinidad made several changes to fiscal conditions to attract more bids after its failed 2019 tender, including reducing the tax liability of shallow water producers, increasing cost recovery by 50 % to 60%, reducing the windfall profits tax from 70% to 50%, increasing the exploration period from six years to eight years, and reducing the offering fee from $40,000 to $30,000 .

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