Trinidad and Tobago’s 2023 shallow water oil and gas auction has attracted bids from major players in the industry, including BP, Shell , and US shale producer EOG Resources. The auction, which closed on Monday, saw a total of six bids placed on four of the 13 blocks on offer.
The Modified UC block, located close to the Teak, Sammaan, and Poui producing fields, received bids from all three companies. No other bidders were present for this block.
Trinidad is a significant player in the global liquefied natural gas (LNG) market, with an installed capacity of 15 million metric tons per year of the super-cooled gas. It is also one of the world’s largest exporters of methanol and ammonia. However, the country’s plants have been operating below full capacity in recent years due to a lack of gas supply.
In an effort to attract more bids, the Trinidad government made several changes to the fiscal terms for the 2023 auction, including reducing the tax liability for shallow-water producers, raising cost recovery to 60% from 50%, cutting the windfall tax to 50% from 70%, increasing the exploration period to eight years from six years, and lowering the bid fee to $30,000 from $40,000.
EOG Resources placed bids on three blocks: the Modified UC, the Lower Reverse L (which is west of Shell’s Manatee discovery and on the border with Venezuela), and NCMA 4 (an area operated by Shell). Shell bid on the Modified UC, while BP bid on the Modified UC and NCMA 2 (which is north of Trinidad and not in the Columbus basin where the company has operated since the 1970s).
The winners of the auction will be announced by the Trinidad government within the next four months, according to Energy Minister Stuart Young.