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Trinidad and Tobago
Contents
Government Hydrocarbon Resources The People
Crude Oil Reserves Natural Gas Reserves Condensate Reserves
Petroleum Legislation Fiscal Regime Government Take
Petroleum Geology Source Relevant Field Information
Address

LOCATION OF TRINIDAD AND TOBAGO

The Republic of Trinidad and Tobago is the most southern of the Caribbean archipelago. It lies just off the north eastern shoulder of Venezuela in the South American mainland. The two islands make up a unitary statehood, the larger, Trinidad, comprising 427 sq.km. and Tobago, with an area of 297 sq.km. They both lie 11 km. off Venezuela's Paria Peninsula. Trinidad is a significant producer of oil and natural gas. Oil was first discovered in Fyzabad, a southern district, in the late 1800s and, traditionally, the southern section of the island is synonymous with oil production and related industrial activity. Trinidad is located at 10¡ 30' N and 61¡ 30' W. It lies in the path of the cooling Northeast Trade Winds which create annual temperatures ranging between 21¡C and 32¡C. This location serves to enhance air and maritime connections to major metropolitan centres in North and South America, Europe and Africa.

GOVERNMENT

Trinidad and Tobago, formerly a British Crown Colony, became self governing in 1956 and gained independence on August 31, 1962. On August 1, 1976 it became the Republic of Trinidad and Tobago whilst remaining within the Commonwealth of Nations. Under the Constitution, legislative power is vested in the Parliament, which consists of the President, the Senate and the House of Representatives. The President is elected for a term of five years by the Electoral College, consisting of all members of the Senate and the House of Representatives. The Senate (the Upper House) comprises 31 members, all of whom are appointed by the President: 19 in accordance with the advice of the Prime Minister, six on the advice of the Leader of the Opposition and nine at the President's discretion. All senators vacate their seats on the dissolution of Parliament. The House of Representatives is made up of the elected representatives of 36 electoral constituencies and the Speaker of the House. Elections are held at least every five years. The Prime Minister is appointed by the President from the ranks of the majority party in the House of Representatives. Judicial power is vested in the Supreme Court, which consists of the High Court of Justice and the Court of Appeal. Further appeals may be heard by the Judicial Committee of the Privy Council, sitting in London. The country has a long tradition of democracy and, since independence, elections have been held as required by the Constitution. All changes of Government have been through free and fair elections with a smooth and peaceful transition

THE PEOPLE

Trinidad and Tobago has a population of 1,234, 400 (1990) giving a population density of 240 per sq . km. Trinidadians comprise the most cosmopolitan mix in the entire Caribbean. At last census count, descendants of African and Indian origin made up the largest segment- about 80% - of the population. The remainder is divided among people of mixed races and persons of European, Chinese, Syrian and Lebanese descent. The Europeans are chiefly of British, French, Spanish or Portuguese origin. Freedom to worship is a right under the Constitution of the Republic. The principal religious groups include Roman Catholics, Hindus, Anglicans and Muslims.

English is the language of this highly literate society (adult literacy 95%). The national education programme provides free education at the primary and secondary levels and, in some instances, at the tertiary level at the University of the ~Test Indies - a regional institution with one of its campuses in Trinidad. In recent years, technical/vocational training programmes have been accelerated in order to prepare young nationals to meet the varied challenges and technological demands brought on by heightened industrial thrusts in various disciplines.

The rich tapestry of our culture can be seen throughout the year in festivals of the major ethnic groups. However, Carnival remains the special expression of our rainbow colours. There are also the colorful and deeply religious festivals of Holi (Phagwa) celebrated by the Hindus and l Hosay (Hosein Festival) of the Muslims. Trinidad is the birthplace of the 'steelpan' acknowledge
to be the only new musical instrument developed this century. The steelpan is now Trinidad and Tobago's National Instrument.

The performance of tile Trinidad and Tobago economy has been strengthening in recent years. In 1994, real Gross Domestic Production increased by 4.7 percent over the previous year. In current prices, GDP amounted to TT$28,388 million, with the petroleum sector inclusive of petrochemicals accounting for 26.5 percent. Total exports amounted to US$1678.9 million and imports were US$1005.8 million, resulting in a positive visible trade balance. The strong trade performance has contributed to the stability of the TT dollar, which was floated against the US dollar on April 7, 1993. The dollar began trading at TT$5.76 to US$1.00, and has stabilized within a range of $5.76 - $5.99 TT.

Trinidad and Tobago has a long history of industry: the earliest being in sugar and rum manufacture and, since 1908, in petroleum exploration, production and refining. Light manufacture and assembly followed in 1950, and chemical fertilizers and other petrochemical production in the 1960's; all with supporting and service industries. The nation has a bountiful resource base which includes crude oil (proven reserves of almost 490 million barrels) and natural gas (proven reserves of 10.1 trillion cubic feet). These resources provide all the fuel required for domestic industrialal activity and a considerable amount of feedstock for those activities downstream of oil and gas production.

The establishment of a Natural Gas Liquids Recovery plant has further widened the available feedstock base for downstream production and provided additional business opportunities. Agricultural production includes sugar, coffee, cocoa, horticulture and teak.

Heavy manufacturing activities include crude oil refining, production of ammonia, methanol, urea, direct reduced iron and steel and cement.

The light manufacturing sector produces a wide range of goods such as nails, garments, household appliances, processed food, adhesives and cosmetics.

The USA is the country's major trading partner accounting for 57 percent of its exports and 41 percent of its imports.

The country is placing greater emphasis on tourism by increasing the number of hotel rooms and expanding the cruise ship facilities.

Hydrocarbon Resources

1866 - First oil deposits discovered at Aripero by Walter Darwent
1908 - Crude oil production begins 1912 First oil refinery established
1954 - Marine drilling begins in Soldado Field in the West Coast
1959 - Commercialization of natural gas to first ammonia plant
1968 - First commercial oil and gas discovery off the East Coast 1971 Natural gas discovered off the North Coast.
1990 - Land exploration for oil in the deeper and older geological formations.

Crude Oil Reserves

Trinidad and Tobago's exploitable crude oil reserve base has developed along with the industry. exhibiting growth and decline at times remarkably similar to the historical profiles for crude oil production. It is not surprising therefore that the highest level
of proved reserves recorded - 670 million barrels - occurred in 1978, the year of peak oil production. The reserve base has, however declined significantly since then and proven
reserves as at January l, l 996 are listed at 481 million barrels. As a percentage of world proven reserves. Trinidad and Tobago's share is 0.05%

Proven oil reserves are essentially evenly distributed between the three crude oil provinces - Land, Marine East and West. Although the breakdown is not shown in the table, it should be noted that to a large extent additional (probable plus possible) potential is located in the marine fields off the West Coast.

Approximately 24% of the proven reserves in the West Coast Marine Area are heavy oil reserves which may not be economically recoverable under current market conditions. Estimates of these heavy oil reserves are in excess of two billion barrels and the potential of these reserves, if economically exploitable, would be significant. Given the current production rate of 48 million barrels (mmbbls) per year. existing proven reserves could be expected to last 10 years. However? if the total reserve potential is in fact realizable, then the reserves-to- production ratio improves to over 36 years.

Natural Gas Reserves

The reserves of non-associated natural gas are of increasing importance to the future of the economy of Trinidad and Tobago. Approximately 70% of proven reserves occur in the East Coast Marine Area and are currently under development. The other significant deposits are located in the North Coast Marine Area. The following represents the typical composition of gas produced from the respective fields:

Typical Composition of Gas(%)
Offshore South
East Coast
Offshore North
Coast
Methane
92.6
99.4
Ethane and heavier
6.9
0.3
Carbon Dioxide
0 4
0.1
Nitrogen
0.1
0.2
Sulphur
0.0
0.0
Total
100.0
100.0





OIL RESERVES AS OF JAN 01, 1996
IN MILLIONS OF BARRELS
PROVEN PROBABLE POSSIBLE TOTAL
Land 218 100 50 368
Marine 263 281 800 1,344
TOTAL 481 381 850 1,712

Based on the Ministry of Energy's estimates and evaluations of gas reserves conducted by independent and internationally-known petroleum consulting firms, the proven natural gas reserves for the country are 12.3 trillion cubic feet (TCF) as at January 1,1996. This represents about 0.2% of the world's proven reserves. At the 1996 average production rate of 723 million cubic feet per day (mmcfd), the proven reserves can be expected to last in excess of 47 years. If the total risk-discounted reserve potential is realized, the reserve-to- production ratio improves to 68 years.

In the East Coast area, gas fields were found by Amoco, British Gas/Texaco and the South East Coast Consortium (SECC) during aggressive oil exploration programmes in the late 1960s and 1970s. In the deeper waters off the North Coast, Trintoc (now Petrotrin) and a group comprising British Gas, Deminex, Agip and Occidental made substantial gas discoveries in the mid-1970s and 1980s. These gas fields are located in water depths ranging from 180 to 550 feet and at distances of 25 to 50 miles offshore.

At present, associated gas and a small quantity of non-associated gas are produced on land and off the west coast. This gas is used for gas-lift operations and as fuel by the operating companies.

Commercial gas production was initiated by Amoco from its Teak field in 1974 and from its Cassia field in 1983. In 1988, a new company, Trintomar, a joint venture comprising Trintoc, Trintopec and The National Gas Company, was formed to develop the natural gas reserves in the Pelican field. By 1990 gas was being produced from this field. In 1992, the SECC Block (excluding the Pelical Field), was assigned to Enron Gas and Oil Trinidad Limited (Enron). Enron immediately proceeded to develop the Keskidee and Ibis fields. Gas production from British Gas/Texaco's Dolphin field began in March 1996.

Condensate Reserves

This resource is located in the gas condensate fields in the East Coast Marine Area and is produced in association with natural gas. Condensate reserves are expected to play an increasingly important role in the future.
As at January 1, 1996 reserves were as follows:

Condensate Reserves
Million Barrels
Proven 70
Probable 130
Possible 40
Total 240


Non Associated Gas Reserves as of Jan 1, 1996
In Billions of Cubic Feet

DISCOUNTED DISCOUNTED
PROVEN PROBABLE POSSIBLE TOTAL
East Coast Marine Area 9,286 2,361 1,801 13,448
North Coast Marine Area 2,990 1,369 139 4,498
Other 64 0 0 64
TOTAL 12,340 3,730 1,940 18,010

Petroleum Legislation

The petroleum industry in The petroleum industry in Trinidad and Tobago is principally governed by the Petroleum Act (1969), the Petroleum Regulations (1970) made thereunder and the Petroleum Taxes Act (1974).

The Petroleum Act establishes a framework for the grant of licences/contracts for the conduct of petroleum operations including exploration and production activity on land and in submarine areas underlying the country's territorial waters.

Under the Act, the Minister of Energy and Energy Industries is responsible for determining the areas to be made available for petroleum operations and may elect to invite applications, for the rights to explore for and produce petroleum from these areas, via competitive bidding.

Persons wishing to engage in petroleum exploration and production operations must apply to the Minister, who may issue the following types of licences/ contracts:

(i) An Exploration Licence which grants the licencee the non-exclusive right to carry out the petroleum operations provided for in the licence.

(ii) An Exploration and Production Licence which grants the licencee the exclusive right to explore for, produce and dispose of petroleum in accordance with the terms of the licence.

(iii) A Production Sharing Contract for the conduct of petroleum operations relating to the exploration, production and disposition of petroleum within a prescribed contract area.

On the basis of the Petroleum Act and its subsidiary regulations, the Ministry of Energy and Energy Industries regulates and gives broad direction and guidance to the petroleum industry.

The Petroleum Taxes Act is administered by the Minister of Finance through the Board of Inland Revenue and establishes the system of taxation for companies engaged in petroleum operations.

Fiscal Regime

The fiscal regime in Trinidad and Tobago can best be described as an enhanced two tier system consisting of production based Royalty, Production Levy and Supplemental Petroleum Tax (S.P.T.) supported by a profits based corporation tax called a Petroleum Profits Tax (P.P.T.). Incentives and allowances are structured into the system to encourage investment particularly in exploration projects and enhanced oil recovery schemes.

The petroleum taxation system was revised in 1992 to enhance its competitiveness by providing additional relief to new investors and the introduction of an S.P.T. rate structure sensitive to oil price variation. The system (illustrated on the accompanying chart) includes the following:

i) A Royalty charged at a rate of 12.5% of all petroleum produced.

ii) A Production Levy of up to< 3% of gross income from crude oil.

iii) A Supplemental Petroleum Tax (S. P. T.) charged on production of crude oil and based on an oil price sensitive rate structure. This ranges from 0% for crude prices under US$ 13.01 per barrel to a maximum of 36% for crude prices in excess of US$49.50 per barrel.

Supplemental Petroleum Tax is computed on gross income from crude oil less allowances for royalty payments and various expenditures incurred in exploration and development activity. In addition, companies are eligible for a productivity allowance," equivalent to a 20% reduction in S.P.T. rate, on all production in excess of 90% of the preceding year's average. A "small field" allowance equivalent to a 20% reduction in the S.P. T. rate is also granted for fields in which the production rate is less than 200 barrels per day per well.

iv) A Petroleum Profits Tax (P.PT.) or corporation tax charged at a rate of 55% of gross revenues from all
sources less deductible expenses and allowances. Eligible deductions include operating and administrative expenses; royalty, production levy and S.P. T. payments; capital allowances (depreciation) and a heavy oil allowance on projects designed to recover crude of 18 degrees API or lower.

Royalties and Taxes are remitted quarterly to the Minister of Energy and Energy Industries and the Board of Inland Revenue respectively.

Government Take

= Revenues
Less: Royalty @ 12.5%
Less: S.P.T. Allowances
Equals: Income Subject to S. P.T.
Less: S.P.T.
Less: Production Levy (3% cap)
Less: Operating Cost
Less: Other Taxable Allowances
Equals: Income Subject to P.P.T.
Less: P.P.T. @ 55%
Equals: PROFIT

Petroleum Geology

Exploration for hydrocarbons in the offshore East Coast area started in 1953, when the entire area was leased to Dominion Oil, an affiliate of Chevron. In that year, the first well, Galeota #1, was the discovery for what is now Petrotrin's Galeota field. A consortium including Pan American Oil Company leased the area in 1961. The following year saw the running of seismic surveys and the drilling of the well Offshore Pt. Radix #1 (OPR#1). In 1966, Pan American then bought out its partners in the consortium and in 1969, changed its name to Amoco Trinidad Oil Company. In the same year, the giant Teak oil field was discovered by the well OPR #3. This was followed by the Samaan (1971) and Poui (1972) oil fields, both considered giant fields by world standards. Since then some seven (7) oil and gas/condensate fields have been discovered in the area.

Trinidad has produced in excess of 2.73 billion barrels of oil since the start of commercial production in 1903. Peak production from the East Coast area occurred in the late 1970's, reaching in excess of 139,000 bopd. Proven crude oil reserves for the entire country at 31 st December, 1993 were 488 million barrels. Probable and possible reserves at 31 st December, 1993 were estimated at 420 million and 370 million barrels respectively. Average East Coast daily gas production for 1994 was 674 mmcf, and is expected to increase as new fields and downstream industries are developed. Proven gas reserves for the entire country at 1 st January, 1995 were 10.0 tcf, with probable and possible reserves estimated at 6.0 tcf and 2.6 tcf respectively.

PETROLEUM GEOLOGY - EAST COAST TRINIDAD

The East Coast of Trinidad, considered to be the extension of the Eastern Venezuela Basin, can be divided structurally into two basins.

1. The Columbus Basin

Structure
This basin is flanked by the Darien Ridge to the north and Delta Amacuro Platform to the south, expanding east towards the Atlantic. It is characterized by an older southwest trending series of compressional anticlines. These have been overprinted by a normal-fault regime, downthrown to the east, with resulting northwest trending rollover anticlines. The region was recently subjected to an episode of strike slip faulting which has further complicated the structural picture. The result is a myriad of trap styles, making the Columbus Basin an interesting and challenging area to explore for hydrocarbons.

Stratigraphy
In the Columbus Basin, petroleum production has been from deltaics and turbidites of Pliocene and Pleistocene ages. Cretaceous age rocks are thought to have been buried to depths greater than 25,000 ft., and have yet to be encountered in the area.

2. The Northern Basin

Structure
Trending in a northeast direction, this basin lies between the Darien Ridge to the south and the offshore extension of the Northern Range complex to the north. The entire basin extends westward onshore and into the Gulf of Paria. The Northern Basin is divided by the Central Range strike-slip fault system into the Nariva sub-basin to the south, and the Caroni sub basin to the north. The Nariva thrust belt is the predominant structural feature in the Nariva sub-basin. Repeat sections of Cretaceous rocks encountered by wells at shallow depths, indicate the involvement of these rocks in thrusting. The basin has also been affected by recent strike-slip faulting.

Stratigraphy
Sediments ranging in age from Cretaceous to Recent overlie Jurassic(?) basement. In the Northern Basin, the Cretaceous occurs at depths as shallow as 3,000 ft. To date however, petroleum has not been encountered in commercial quantities in the offshore Northern Basin. Good shows in the Upper Cretaceous Naparima Hill and Gautier formations indicate that there is a strong hydrocarbon potential in the basin. Reservoir targets include Upper and Lower Cretaceous deep-water sandstones of the Naparima Gautier and Cuche formations, Upper Cretaceous fractured argillites, and Early Tertiary turbidites.

Source

The main source rocks in the Trinidad area are the Upper Cretaceous Naparima Hill argillites and Gautier shales. Studies have indicated that they consist of four major facies types: carbonates, marine siliciclastics, terrestrial-rich clastics and marine siliciclastics with significant terrestrial input. The abundance of vitrinite within the facies varies from trace amounts to a maximum of 50%. Total Organic Content (TOC) values can range between 2.1% and 9%, making this one of the richest source rocks in the world. The basin has a low geothermal gradient of 1. 1_ F/100 ft. and Ro values associated with maturation are unusually low. These factors result in the source rock being within the oil window down to depths of 40,000 ft. at the present time.

In the Columbus Basin, the source rocks have been buried to depths in excess of 25,000 ft. Ongoing studies indicate that the known occurrence of gas/condensate fields in this area is a result of variation in kerogegen type, rather than over maturity of the source rock as previously postulated. In the Northern Basin, hydrocarbons have been found in-situ within the source rocks.

Relevant Field Information

Crudes produced from East Coast fields are typically medium to light grade. Initial production in some wells has beer as high as 6,000 bopd. Cumulative production to date is in excess of 800 million barrels. Utilizing natural reservoir pressure and an efficient water drive, 30% of the original oil in place is produced by primary methods. New technologies, such as horizontal drilling, are being used to recover significant amounts of crude oil.

The compositional characterization of Trinidad East Coast crudes, along with PVT correlations describing the behaviour of the oils, have been well documented in the literature. Research has shown that all three types of crude exist within the area: paraffins, naphthenes and asphaltenes.

Reservoir Parameters
Producing Sand Thickness up to 400 ft.
Porosity 14 - 33%
Permeability 10 - 400 md
OOIP 4 billion barrels
Specific Gravity 25 - 43_ API
Viscosity (at 60 F) 0.6 - 3.0 CP
FVF(Boi) 1.10 - 2.30
GOR 300 - 1000 scf/bbl

THE NATIONAL GAS COMPANY OF TRINIDAD AND TOBAGO LIMITED Office Location
Orinoco Drive Point Lisas,
Couva,
Republic of Trinidad and Tobago, W.I.
Tel.: (809) 636-4662, 4680
Fax: (809) 679-2384

Mailing Address
P.O. Box 1127
Port of Spain.
Republic of Trinidad and Tobago, W.I.