MINISTER Stuart Young said the signing of deepwater production sharing contracts (PSCs) for deep water blocks will result in increased upstream activity. He made the statements during the signing of the contracts on Tuesday.

The signing means the closure of a deal between Trinidad and Tobago and a consortium of oil and gas giants BpTT and Shell on three of four deepwater blocks on which bids were made last year.

Young said in a speech the closure of the deal was a testimony of the commitment to the country’s energy sector by all parties involved. He added that exploration is necessary to maintain TT’s energy sector.

“It is no secret that the levels of petroleum production in the country are not where we would like them to be. As such, continued exploration on land, shallow water and particularly in the country’s deepwater province, is the key to maintaining our world-class energy sector,” he said. “Globally, deepwater production is expected to climb to 17 million barrels of oil equivalent per day in 2030. TT has the potential to be a significant deepwater player.”

He said the awarding of the PSCs was the combined result of extensive negotiations, adjustments in last year’s budget with regard to fiscal incentives and guidance by provisions set out in the Petroleum Regulations (Deep Water Competitive Bidding) order of 2021 and the 2021 model deepwater production-sharing contract.

The proposals were reviewed by a technical evaluation and overview committee established by Cabinet and representatives from the Energy Ministry, the Finance Ministry and the AG’s Office were involved in its review.

He said activity in the blocks is expected to start within 24 months of the effective date of the PSC.

“We are satisfied that the negotiations achieved its objective of arriving at equitable terms that will accrue to the mutual benefit of Government as a resource holder and bidders as key stakeholders and investors in TT’s deepwater province,” he said. “We are aware of the statements made in the public domain about the speed at which these PSCs were negotiated. In this regard, I wish to state that these negotiations were quite intensive and to ensure the optimal balance of benefit, multiple engagements and detailed analyses were required.”

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