dr keith rowley

Prime Minister Dr Keith Rowley

Prime Minister Dr Keith Rowley said that while the success of Heritage Petroleum Company Limited has been espoused many times by Energy Minister Franklin Khan, it becomes no less impressive each time it is repeated, as Heritage has delivered a stellar performance since its inception, and continues to do so time and time again.

Rowley made the remark while delivering the feature address at the signing of an exploration and production agreement between Heritage and EOG Resources Trinidad Limited on Wednesday at Heritage’s Queen’s Park West, Port of Spain headquarters.

The agreement will see EOG farm into a portion of Heritage’s acreage within the Exploration and Production (Public Petroleum Rights) Licence covering the offshore Trinidad Northern Areas Block in the Gulf of Paria (“TNA Licence”).

“We have witnessed a remarkable turnaround in exploration and production operations since the restructuring of Petrotrin. In its short existence, Heritage was able to increase liquids production to an average of 35,000 barrels of oil per day in 2020, from Petrotrin’s 2017 production levels of 21,500 barrels of oil per day. In December 2020, Heritage’s production reached as high as 36,000 barrels of oil per day. Increased production was the result of the considerable work put in by Heritage, including the completion of workovers and gas lift installation on offshore wells.

“Just imagine that during a year with two black swan events, namely a pandemic and historically low energy prices dipping into negative territory, Heritage was able to maintain production levels above that of the former Petrotrin. Heritage had been doing so well prior to the pandemic that the company was in a position to store its production during the period of lowest market prices, while still meeting debt commitments and the costs of its operations.”

The PM noted that in addition to increasing production, Heritage has also been able to achieve lower   lifting costs than its predecessor, in the range of US$28 per barrel, compared to US$35-38 under Petrotrin.

“With the combination of increased production and reduced costs, it comes as no surprise that Heritage has been able to turn a profit in its first two years of operation, to the tune of $1.4 billion and $884 million for financial years 2019 and 2020 respectively, whilst contributing almost $2 billion in taxes and royalties to the State.

“Heritage has set a vision for itself, “to be a source of pride for Trinidad and Tobago by focusing on profitability, operational excellence and world class talent as a performance driven oil and gas company”, and by all accounts thus far, Heritage is realizing this vision. I applaud the members of the board, the CEO and the management team for your astute leadership, focus and pragmatism in steering the company to where it is today,” Rowley said.

He added that an integral part of the management of the company is recognizing opportunities and forming synergetic partnerships, and thus he believed that Heritage has found an equally nimble, innovative and resilient partner in EOG.

“In its past projects such as the South East Coast Consortium (SECC) joint venture, EOG has proven to be a valuable partner for Heritage, clearly showcasing its ability to deliver on time and on target, while demonstrating subsurface competency, and efficient well planning and execution. In its almost thirty-year history in Trinidad and Tobago, EOG has consistently signalled that it is capable of setting and achieving aggressive targets, at relatively low costs.

I expect this partnership between Heritage and EOG to be a fruitful one, given the alignment of the strategic objectives of both parties, with EOG’s intent being to expand its operations in Trinidad and Tobago, and Heritage’s intent being to increase its production and develop its reserves in a timely manner.”

Rowley said in March 2019, he met with a high-level delegation from EOG Resources, led by its chairman and CEO William Thomas, where they discussed several items, including EOG’s prospective exploration and production schedule for Trinidad and Tobago for the next five years.

The PM added that notwithstanding the competitive global environment, EOG also reaffirmed its commitment to Trinidad and Tobago and expressed the company’s intention to continue investing in the country.

“As a Government, we endeavour to encourage and support continued investment in our energy sector, and all other sectors of our economy. Last year, EOG spent just over US$100 million in capital expenditure in Trinidad and Tobago, and the impact of such expenditure is not lost on us, especially as we witness the changing tides in the energy industry, and the shifting priorities of major international energy companies.

“We recognize the importance of companies such as EOG in the maximization of value of our natural resources for the benefit of our citizens. We welcome the continued participation of private capital in our local economy, in partnership with our State Enterprises, to stimulate the economy along the supply chain, and, more importantly, through the generation of foreign exchange, to maintain the standard of living to which our citizens have grown accustomed,” Rowley noted

The PM wished both parties the greatest success in their joint venture, and stated that he hope to see announcements of discoveries in the near future.

With regards to the joint venture, Heritage executed a new TNA licence with the Ministry of Energy on February 8, which was a consolidation of two offshore licensed areas previously held by Heritage, and which created a single area of nearly 97,000 hectares, now called the Trinidad Northern Areas Block (“TNA Block”).

The granting of the TNA Licence allowed Heritage to bring on a strategic partner to advance its exploration agenda in the TNA Block. The area of interest in which Heritage and EOG will collaborate represents approximately 14,000 hectares in the southern region of the TNA Block.

Heritage will retain 35% participating interest in the TNA Block while EOG, as the operator, will hold a 65% participating interest. The joint venture is expected to commence drilling its first exploration well this year.

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