BHP flops: Ruby oil field fails to shine - Trinidad Guardian .

Ruby Coding

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More bad news for the En­er­gy Sec­tor and the coun­try’s econ­o­my as there is now con­fir­ma­tion that BHP’s Ru­by field will pro­duce much less oil than orig­i­nal­ly thought and as a re­sult there will be no sig­nif­i­cant in­crease in crude oil pro­duc­tion this year.

In re­sponse to ques­tions from the Sun­day Busi­ness Guardian BHP has re­vealed that its pro­duc­tion will be low­er from Ru­by than orig­i­nal­ly an­tic­i­pat­ed be­cause there is less oil in the field that orig­i­nal­ly thought.

BHP said; “Ru­by’s pro­duc­tion fore­cast is low­er than orig­i­nal­ly ex­pect­ed due to low­er in-place vol­umes as­so­ci­at­ed with more sub­sur­face com­plex­i­ty.”

The com­pa­ny was ex­pect­ed to be be pro­duc­ing 16,000 bar­rels of oil per day (bo/d) from Ru­by but so far has av­er­aged clos­er to 4,000 bo/d, a quar­ter of the ex­pect­ed pro­duc­tion.

A lot of gov­ern­ment’s rev­enue was pro­ject­ed on high­er oil pro­duc­tion which was pred­i­cat­ed on BHP’s Ru­by field, but no such bump is forth­com­ing.

BHP told SBG that there is an at­tempt now at op­ti­mi­sa­tion by in­ject­ing nat­ur­al gas in­to the wells. This will have a neg­a­tive ef­fect on nat­ur­al gas be­ing avail­able to go in­to the na­tion­al grid.

“Pro­duc­tion op­ti­miza­tion ef­forts are on­go­ing, in­clud­ing gas in­jec­tion.” BHP re­vealed.

The Ru­by de­vel­op­ment is lo­cat­ed in Block 3(a) im­me­di­ate­ly east of the Greater An­gos­tu­ra Field.

Through its sub­sidiary NGC E&P (Nether­lands) B.V., NGC is a joint ven­ture part­ner in the Ru­by Project with op­er­a­tor BHP.

It was main­ly on the back of the pro­ject­ed in­crease in pro­duc­tion from the Ru­by field that Fi­nance Min­is­ter Colm Im­bert boast­ed that the coun­try will re­turn to pro­duc­ing over 80,000 bar­rels of oil per day.

He told the Par­lia­ment, “Oil and con­den­sate pro­duc­tion de­creased from 71,725 bar­rels per day in 2016

to 56,481 bar­rels per day in 2020; but since then, has been in­creas­ing and is pro­ject­ed to reach 64,000 bar­rels per day by the end of 2021, fur­ther in­creas­ing to 86,000 bar­rels per day in 2022 sta­bil­is­ing there­after around that lev­el in the medi­um-term.”

This ap­pears not pos­si­ble and from the lat­est pro­duc­tion fig­ures from the Min­istry of En­er­gy crude pro­duc­tion con­tin­ues to hov­er around 60,000 bo/d as of No­vem­ber last year.

For­mer En­er­gy Min­is­ter Kevin Ram­nar­ine point­ed out that the news is not good, not on­ly for BHP, but its part­ner the Na­tion­al Gas Com­pa­ny Lim­it­ed and was com­ing at a bad time, when prices are high.

He told SBG, “This is dis­ap­point­ing news for BHP and its part­ners in Block 3a which in­cludes the NGC. It al­so has con­se­quences for the coun­try’s eco­nom­ic re­cov­ery in 2022 and rev­enue col­lec­tion. It al­so comes at a time when oil prices are at its high­est since 2014. Any­one who be­lieves that the coun­try will ben­e­fit from a wind­fall of rev­enue from the Rus­sia—Ukraine in­va­sion should there­fore tem­per these ex­pec­ta­tions. Our past “booms” which were were based on a con­flu­ence of price in­creas­es and pro­duc­tion growth. At this time we on­ly have a price in­crease.”

Ram­nar­ine re­mind­ed that the Fi­nance Min­is­ter had talked about the in­crease and won­dered what it means now for the bud­get.

“In his Oc­to­ber 2021 bud­get speech the Min­is­ter of Fi­nance based his fore­cast of 5 per cent growth in 2022 on the in­crease in oil pro­duc­tion in 2022. He saw oil pro­duc­tion reach­ing 64,859 bar­rels/ day by end of 2021 (this has not hap­pened) and in­creas­ing to 86,163 bar­rels per day in 2022. These pre­dic­tions would have been based on an ex­pect­ed 16,000 bar­rels per day from the BHP Ru­by project. It’s now seems that Ru­by will not de­liv­er the pro­duc­tion that was ex­pect­ed.” He told SBG.

The NGC which is a share­hold­er in the Ru­by field was ju­bi­lant when it start­ed pro­duc­ing, with its Pres­i­dent Mark Lo­quan even pre­dict­ing a net in­crease of oil and gas pro­duc­tion. BHP lat­er re­fut­ed Lo­quan’s claim of in­crease in gas pro­duc­tion.

First gas is ex­pect­ed to oc­cur soon, at the time the NGC stat­ed.

“On com­ple­tion of all de­vel­op­ment ac­tiv­i­ties lat­er this year, the Ru­by field is ex­pect­ed to pro­duce up to 16,000 gross bar­rels of oil per day and 80 mil­lion gross stan­dard cu­bic feet of nat­ur­al gas per day,” NGC not­ed.

In Ju­ly 2020, NGC and BHP signed a Gas Sales Con­tract al­low­ing NGC to pur­chase 100 per cent of the gas pro­duced from the Ru­by field to add to its ex­ist­ing port­fo­lio of nat­ur­al gas sup­ply.

NGC as a joint ven­ture part­ner is al­so en­ti­tled to a share of the field’s oil pro­duc­tion.

“This will be mar­ket­ed as part of its En­er­gy Mar­ket­ing and Trad­ing port­fo­lio, pro­vid­ing valu­able sup­ple­men­tal in­come to the Com­pa­ny,” NGC stat­ed in 2021.

Lo­quan, said the achieve­ment on the Ru­by project, to­geth­er with pos­i­tive news from oth­er pro­duc­ers, gives cause for op­ti­mism.

“NGC has been work­ing close­ly and con­sci­en­tious­ly with up­stream op­er­a­tors, both as a val­ue chain stake­hold­er and Joint Ven­ture part­ner in sev­er­al de­vel­op­ments, to ad­vance work pro­grammes and bring more gas in­to the pipeline. It is ex­treme­ly heart­en­ing to see that work bear­ing fruit,” Lo­quan said.

“The an­nounce­ment of first oil from Ru­by sig­nals im­por­tant progress on an im­por­tant project. We look for­ward to more pos­i­tive news from the field and ex­pect as­so­ci­at­ed gas pro­duc­tion which would con­tribute to fur­ther sta­bil­i­ty in sup­ply. This is promis­ing news for our down­stream sec­tor, for our Com­pa­ny, and for the coun­try,” he stat­ed.

NGC said its in­vest­ment stake in these up­stream projects has al­lowed it to deep­en its par­tic­i­pa­tion along the gas val­ue chain, and fur­ther its strate­gic ob­jec­tive of grow­ing the busi­ness and its im­pact with­in the en­er­gy sec­tor.

But BHP short­ly af­ter told SBG that the Ru­by field will not mean any net ad­di­tion­al gas will be added to the com­pa­ny or T&T’s nat­ur­al gas pro­duc­tion but would in­stead be used to keep present pro­duc­tion at peak lev­els for a longer time.

Coun­try Man­ag­er of BHP T&T, Michael Stone, told SBG that at present, BHP pro­duces from its An­gos­tu­ra field be­tween 300 and 360 mil­lion stan­dard cu­bic feet per day (mm­scf/d) and Ru­by will al­low it to main­tain pro­duc­tion in the high­er range.

He ex­plained, “With just An­gos­tu­ra it ranges be­tween 300mm­scf/d and 360mm­scf/d. What we would ex­pect is with the 80mm­scf/d com­ing on from Ru­by, it al­lows us to pro­duce at the up­per end of that range sus­tain­ably, but it’s not go­ing to in­crease be­yond the up­per end of that range.

“What it’s go­ing to do, for­tu­nate­ly, is it’s go­ing to elon­gate the pro­file and al­low us to pro­duce at the high­er end of that range for the longer pe­ri­od of time, but it’s not go­ing to take us be­yond that up­per end of the range to an­swer your ques­tion.”