PORT OF SPAIN — Trinidad and Tobago plans an auction this quarter of up to 20 offshore natural gas exploration blocks under new fiscal terms designed to increase the pool of potential bidders, people familiar with the matter told Reuters.
The Caribbean nation has been working to stem a decline in its natural gas output and to spur exploration in its shallow waters, where almost all of its natural gas is produced. The new fiscal terms and a plan to provide seismic data aim to lure new bidders, the sources said.
Minister of Energy and Energy Industries Stuart Young confirmed the bid round at a ceremony last week to close an onshore auction in which it received 16 bids on 11 blocks.
The new terms follow a 2020 auction in which the sole bids came from a consortium of bp and Shell, according to Ministry of Energy and Cabinet officials who spoke on condition of anonymity because the information was not public. Those bids were not accepted.
The new fiscal regime would assign a 12.5% royalty on a producer's gas profits and instead of gross production, improving the proceeds to an operator, the people said.
Seismic data on the blocks to be offered will be reprocessed by TGS, they said. The data could help convince bidders that there remain untapped fields on its continental shelf.
Trinidad and Tobago has a natural gas deficit of 25% of its installed processing capacity, with daily production of just under 3 Bcf/d leading to a shortfall in LNG and petrochemical production.
Young said Trinidad is committed to transparent and fair bidding processes and will continue to work with stakeholders to ensure the success of future bid rounds.