1. Competitive Bidding 2010

2. Outline of Talk Introduction Gas Bid round 2009/2010 Oil
Framework for Presentation
Gas
Bid round 2009/2010
Areas Offered and Terms
Oil
Immediate to Short Term
Long term – Areas Offered and Terms

3. Government’s of Trinidad and Tobago’s Focus
Sustainable development of the energy industry
Provision of a competitive framework for investment
Provision of gas for expansion of downstream industries
Rebalance oil and gas production
Enabling greater participation of nationals and national enterprises
provision of incentives for investment

4. Gas Reserves and Resources (tcf)
PROVED
POSSIBLE
PROBABLE
Total
EXPL. RESOURCES:
A largely Static Picture

5. Change the Static Picture – How?
Challenge for gas- Build up probable and possible reserves base to feed into proven
Gas, because of its nature, has no value unless a market exists for it
Companies will not explore for gas unless a market is available
The entire value chain is interwoven
Upstream E&P
Midstream transmission - pipeline, ?LNG
Downstream – Primary Refining
Downstream – Manufacturing
Provision of a market

6. Projected Production Statistics
2017 Projected with Train X
GAS PROCESSING 1%
METHANOL MANUFACTURE
10%
REFINERY
AMMONIA AND UREA
MANUFACTURE
SMALL CONSUMERS
Down Stream Ammonia 4%
New Metals and
Plastics 7%
Down Stream
Methanol 4%
LNG 'Train X'
13%
Atlantic (LNG)
39%
POWER GENERATION 7%
Total
6042 MMscfd
Train X is still considered a viable option but there has to be considerable quantities of new gas discovered to move forward with this project.

7. Gas Round

8. Shallow and Average Water Round Acreage Offered
Blocks Offered
NCMA 2
NCMA 4
NCMA 3
NCMA 5
4(b)
North Marine
5(d)

9. Shallow Water Block Descriptions (1)
North Marine Block -280 sq km
Located in very shallow water
Close to infrastructure
This block has the potential to be both oil and gas bearing
Block NCMA 2 - 1,019 sq km.
This block deservedly attracted three bids in the 2006 round and has identified potential over 1tcf of gas
Block NCMA 3 - 1,019 sq km.
Several anomalies have been identified, although the block poses more of an exploitation challenge

10. Shallow Water Block Descriptions (2)
Block NCMA sq km.
This block has at least 300bcf of identified resources
the recent 2D speculative survey has identified some upside potential.
NCMA 5 - 2,311 sq km
This area lies north of the Angostura Field and holds promise for both oil and gas accumulations in Oligocene reservoirs.

11. Average Water Depth Block Descriptions
Block 4(b) sq km
One well on the eastern edge of the block (Las Cuevas 1) encountered hydrocarbons.
Several structures mapped - >2tcf of gas in shallow structures and the possibility of more at depth
 Block 5(d) sq km
Two wells in this block - El Nino-1 confirmed the presence of an active hydrocarbon system encountering gas-condensate sands, Sandpiper – gas bearing sands.

12. Timing
Competitive Bid Order was signed by the Minister on 31st 2010 March
Will be published and gazetted to have legal effect
Bids are to be submitted by the first Wednesday four months after publication of the CBO
Announcement of awardees six months after publication of CBO

13. Contained in Competitive Bidding Order
Terms and Conditions
Contained in Competitive Bidding Order

14. Pre-bid Qualification Fee
US$ 50,000 for Blocks NCMA 3, NCMA 4 and NCMA 5 which shall entitle the bidder to bid on any or all of these blocks
US$40,000 to bid on Block NCMA 2,
US$40,000 to bid on Block 4(b),
US$40,000 to bid Block 5(d)
US$40,000 to bid on North Marine Block

15. NCMA 2, 3, 4 and 5 and North Marine Block
TERM OF CONTRACT
1st Phase - seismic option – 2years
1st Phase - seismic and exploration drilling
seismic and 1 well – 3years
seismic and 2wells – 4 years
seismic and 3 wells – 5 years
2nd Phase - exploration drilling
3rd Phase - exploration drilling
Drilling of exploration wells is a requirement in the second and third phases
Bid Order will contain more information

16. MINIMUM WORK PROGRAMME WORK UNITS
(US$1MN equivalent to one work unit)
Geophysical
SEISMIC
3D Seismic ____________
Other Geophysical ____________
Geological
Studies
Drilling:
Wells Depth _____________
SIGNATURE BONUS US$ _____________

17. PSC Commercial Terms Shallow and Average Water Depth
Conventional styled (non taxable) PSCs, for Shallow(400m), Average ( m) with the following features:
GORTT’s Share of Profit Petroleum are in lieu of taxes with exception of the payment of Withholding Taxes and Stamp Duty
Ring-fenced – There will be no consolidation
Profit Shares are biddable, matrices are open with no constraints to bidding (Production is incremental)
Financial Obligations are fixed in the Contract
Cost Recovery Limit is fixed at 50%, 55% for shallow and average respectively
Fair Market Value as defined in Petroleum Taxes Act is utilised for the pricing of gas

18. Natural Gas A B C D Crude Oil Cost Recovery: 50%
Shallow Water: Profit Petroleum Share Matrices
Natural Gas
Price
MMCFD A B C D
< $3.00
$3.00 -$4.50
$ $6.00
> $6.00 %
< 60 X
> 450
Crude Oil
Price
MBOPD A B C D
< $40.00
$ $55.00
$ $70.00
> $70.00 %
< 6 X
6 - 20
> 75
20% Carried participation
X represents the Governments Share of Profit Petroleum which is biddable
Windfall Feature:
BR + 70%*[(P – US$70.00) / P]*(1-BR)
Where:
BR is the base rate at Column D
P is the market price
Windfall Feature:
BR + 70%*[(P – US$6.00) / P]*(1-BR)
Where:
BR is the base rate at Column D
P is the market price
Cost Recovery: 50%

19. Average Water: Profit Petroleum Share Matrices
Natural Gas
Price
MMCFD A B C D
< $4.00
$4.00 -$5.50
$ $7.00
> $7.00 %
< 60 X
> 450
Crude Oil
Price
MBOPD A B C D
< $40.00
$ $60.00
$ $80.00
> $80.00 %
< 10 X
10- 25
25- 50
> 75
X represents the Governments Share of Profit Petroleum which is biddable
No Carried Participation
Windfall Feature:
BR + 70%*[(P – US$80.00) / P]*(1-BR)
Where:
BR is the base rate at Column D
P is the market price
Windfall Feature:
BR + 70%*[(P – US$7.00) / P]*(1-BR)
Where:
BR is the base rate at Column D
P is the market price
Cost Recovery: 55%

20. Evaluation Process

21. Bid Evaluation Two Biddable items Bid not totally self assessable
Work Programme self assessable
Pts per ft for wells drilled included in the Bid Order
Government Share is biddable but not self assessable
Internal benchmark will be set

22. 2010
Deep Water

23. Deep Water Blocks 39 blocks in water depths 1,000 – 3,500 metres
No decision has yet been made on the number of blocks to be offered
Blocks in the TTDAA can now be nominated
Prequalification criteria has been published
Operators must be prequalified
The document also asks for information on non-operators

24. Blocks available for Nomination
Deep Water Blocks
Blocks available for Nomination

25. Nomination Process
The Map indicates the blocks from which nominations are to be made (hatched area)
Companies will be required to submit a letter to the Minister naming the block nominated
All nominations will be treated as confidential commercial
Nomination is free
Nominations close May 7th, 2010
Final determination of blocks will be made by MEEI

26. Location of Leads Analysed (6)
Depth Structure Maps Showing Lead Locations
Lead NW
Lead NE
Lead 010
Lead 020
Lead 040
Lead 030

27. Reserves Analysis for Leads Identified
Uncertainty Analysis (for each lead)
Estimate Reserves Size Distribution
Multi-zone Monte Carlo Simulation
Reservoir Size, Thickness, & Recovery Factors
(Ps) Chance of finding HC’s in at least one zone
Risked & Unrisked Reserves
Hydrocarbon Type – Oil, Gas, GOR, Cond Yield

28. Reserves Identified

29. Deep Water Exploration Commercial Terms
Conventional styled (non taxable) PSCs, with the following features:
GORTT’s Share of Profit Petroleum are inlieu of taxes with exception of the payment of Withholding Taxes and Stamp Duty
Ring-fenced – There will be no consolidation
Profit Shares are biddable, matrices will be open with no constraints to bidding (Production is incremental)
Financial Obligations are fixed in the Contract
Cost Recovery Limit fixed at 60%
No carried Participation
Fair Market Value as defined in Petroleum Taxes Act is utilised for the pricing of gas

30. Deep Water: Profit Share Matrices
Crude Oil
Price
MBOPD A B C D
< $50.00
$ $75.00
$ $100.00
> $100.00 %
< 75 X
150 – 200
> 200
Natural Gas
Price
MMCFD A B C D
< $4.00
$ $6.50
$6.50 -$9.00
> $9.00 %
< 200 X
750 – 1,000
> 1,000
The technical terms have not yet been finalised for the deep water
X represents the Governments Share of Profit Petroleum which is biddable
No carried participation
Windfall Feature:
BR + 70%*[(P – US$100.00) / P]*(1-BR)
Where:
BR is the base rate at Column D
P is the market price
Windfall Feature:
BR + 70%*[(P – US$9.00) / P]*(1-BR)
Where:
BR is the base rate at Column D
P is the market price
Cost Recovery: 60%

31. Schedule & Timing
Competitive Bid Order will be finalized and published by end July, 2010
Bid offers are to be submitted by the first Wednesday four months from the date of publication of the CBO
Evaluation of bids – max 2mths
Announcement of successful bidders will be made six months after publication of CBO

32. Thank You