Trinidad and Tobago will need as many as nine exploration wells to be drilled annually to maintain the country's gas reserve base, which according to an independent audit, dropped to 15.4 trillion cubic feet (tcf) in 2008 from 17 tcf in 2007.

"This is assuming that one in three exploration campaigns can find at least 500 billion cubic feet (bcf) of gas which is close to the minimum reserves needed for an economic development, " energy minister, Conrad Enill said this week.

US-based petroleum consulting outfit, Ryder Scott, which carried out the December 2008 audit for the government, said proved reserves stood at 15.4 tcf, probable at 8.5 tcf and possible at 6.3 tcf.

In 2000, proved gas reserves were 19.67 tcf and peaked in 2002 to 20.75 tcf.

Tremendous pressure

Herman Acuna, Ryder Scott's managing senior vice-president, who presented the audit said the reduction in reserves last year resulted from increased production in gas fields.

"There is tremendous pressure to continue exploration to replace the reserves," he said.

The volume of gas produced during 2008 was 1.5 tcf at an average rate of 4.1 bcf of gas per day.

The energy minister said an analysis of the gas results indicate that gas reserves were being used at an optimum level.

" However, there is need to increase activity to support or increase the current reserve to production ratio. In light of this, there is a critical need for Trinidad and Tobago to encourage exploration as well as appraisal and development drilling to move hydrocarbon resources from the unrisked to the risked category," he added.

In the government's most recent efforts to encourage exploration, the ministry of energy signed several new production sharing contracts for blocks.

"The ultimate goal of our current upstream strategies is to attract companies to the new exploration provinces including the deep water, while encouraging existing companies to develop their licensed/contracted acreage," said Enill.

New exploration provinces

Government also plans to attract companies to new exploration provinces through the 2009/2010 competitive bid round and a revised petroleum fiscal regime, which seeks to create an environment to encourage and promote exploration and development activities and offer a more equitable sharing of the economic rent.

Six blocks in shallow water will be offered in a bid round during the first quarter of 2010.

The blocks which comprise 870,000 hectares that are primarily gas prone with 8 tcf of unrisked identified exploration resources.

"The acreage is close to existing production facilities, adjacent to successfully explored blocks and in one of the blocks proven resources have been identified," Enill added.

A deep water bid round is also planned for the second quarter of 2010.

Helena Inniss-King, director of resource management at the energy ministry said a study which was recently completed on the deep water areas indicates large volumes of oil and gas.

Meanwhile the energy minister said the country also continues to have large volumes of uncommitted gas because several projects have not yet come on stream.

"It must also be emphasized that most of the major operating companies have expressed a high level of confidence in the ability of their existing reserves to meet their current contracted demand. The country will therefore be assured of a long-term supply of natural gas to meet not only its domestic needs but also to service our vibrant export based industry," he said.

Responding to a question about whether there is a market for any substantial gas discovery, Enill said the answer lies in the continuous expansion of the downstream industrial base which includes 10 ammonia and seven methanol plants which feeds the demand.

Global downturn

A central bank April 2009 monetary policy showed that the global downturn had impacted on the volume of oil and petrochemical exports over the preceding five months, declining by 11.6 per cent compared with the corresponding period of the previous year.

The plunge in external demand for petrochemical exports in particular has negatively impacted the domestic energy industry. Natural gas utilisation also fell by 2.1 per cent and is likely to remain low until there is some recovery in demand in the major markets.

The volume decline has been accompanied by a dramatic fall in prices - 49.2 per cent for methanol and 17.2 per cent for ammonia.

linda.hutchinson-jafar@gleanerjm.com