Opening up Trinidad's tar sandsThe island holds large bitumen reserves. The head of a company wanting to develop them says the resource could help fix the country’s energy-import problem
Herbert Sukhu - 5 January 2017
Trinidad and Tobago's energy economy is in a parlous state. It imports about four-fifths of the oil it uses, and natural gas reserves-the state's key energy earner-continue to fall steeply. In 2015, they dropped by almost 8% compared with the previous year. It's vital that the country find new hydrocarbon resources to plug this gap, and we think large reserves of oil sands offer an answer.
The government is aware of the problem. To stop the decline its aim is to oversee a rise in conventional oil output. It estimates, for example, that the country's deep waters could hold between 3.1bn and 8.2bn barrels of oil in place. Oil and gasfields found in deep-water areas off Trinidad's eastern and northern coasts hold much potential, and old reservoirs in the Central and Southern Basin could also be revived. But will they be enough?
Trinidad and Tobago's petroleum production began in 1908, making it one of the oldest petroleum producers in the world. So it would be wrong to bet against a recovery. Still, it has a lot of ground to make up. Production peaked in 1978 at about 230,000 barrels a day-when it accounted for 60% of government revenue and 90% of export earnings. It's now down to around 66,000 b/d-equivalent to output in 1956-1957.
The country's oil sands resources can play a role in reversing this decline. While they aren't comparable in size to Canada's huge Athabasca deposits, their qualities are similar or even better, in terms of how much oil can be recovered in the mining process. Indeed, on those terms they rank eighth in the world (the top seven are found in Canada).
The oil sands have the potential to spur a third wave of energy development in Trinidad and Tobago. Synthetic oil could be extracted from the bituminous reserves found in the Forest Reserve, Parrylands, Guapo and Antilles-Vessigny fields, in the southwestern peninsula of Trinidad.New approaches
Extracting and producing oil sands involve methods that are different from those used in conventional oil. So the process will need to be understood and reviewed if the country is to seize the opportunity.
A better understanding of surface and sub-surface geological and geochemical characterisation will be necessary, as will identification of relevant exploration and reservoir modelling techniques, and bitumen recovery processes that can be applied in an environmentally friendly way.
Much learning will come from Alberta, where producers use five main extraction processes: the Clark hot-water process (CHWP); hot-water extraction (HWE); steam-assisted gravity drainage (Sag-D); cyclic-steam stimulation; solvent processes; and toe-to-heal air injection. Another method is a retort process to extract the entire organic fraction from the oil sands ore that, simultaneously, carries out primary upgrading of bitumen to produce a distillate that can be pumped.
If these techniques are to be used in Trinidad, they'll need to overcome some of the environmental and economic concerns that have dogged their application in Alberta. There may, for example, be no backing from stakeholders for using CHWP, HWE or SP.
Oil sands development in southwest Trinidad would also have to overcome the unpopular legacy of an aborted aluminium project, to which the government granted a certificate of environmental clearance without consulting the public. To understand the concerns of stakeholders for large development projects, potential oil sands developers should hold interviews and meetings with the public and civil society groups. For people living in communities that might be affected by a project, fear of environmental damage (through extraction techniques with either water or solvents, and derivatives of each) is real. Developers would have to address them.
Trinidad's stakeholders-aware of the potential economic benefits but conscious of the need to protect their environment-now require preliminary project-development work to carry out sufficient due diligence. This should allow for a thorough examination of known and unknown impacts, so they can be correctly assessed.
The economic case is sound. An integrated financial and economic model, developed to determine the project viability for synthetic crude oil, shows that output could reach 11m, 18.3m or 36.5m barrels a year (between about 30,000 and 100,000 b/d) for a minium of 25 years. This is a major opportunity that could reduce the country's imports of crude oil.
But the government has not yet articulated a policy framework or sought the qualified expertise to review and help it decide how it should handle its unconventional oil potential.Grasping opportunity
The country's oil sands resources were also curiously omitted from the Ministry of Energy and Energy Industries' (MEEI) white paper on its National Minerals Policy (2015). This has made it difficult even to conduct the necessary research into the opportunity. Because the government took no decision about whether to produce its bitumen, neither an environmental-impact assessment nor a certificate of environmental clearance has been issued. It has all left the prospect of development of a potentially significant source of domestic energy in limbo.
There are some signs of progress. Earlier this year, energy minister Nicole Olivierre noted that the country had to undertake "sustained monetisation" of all its energy sources, "including tar sands". But the cabinet was reshuffled at the end of October, with Franklin Khan replacing her as minister, and it's not clear yet whether he endorses Olivierre's statement on monetising all energy sources, including oil sands. Still, we are pressing ahead. InvestTT, the government's investment-promotion firm, has signed a memorandum of understanding with Geominex Resources. It states that the agency will "facilitate approval to conduct a full socio-economic and environmental-impact assessment on the development of Trinidad and Tobago's tar sands south of the region of La Brea for the production of crude oil".
While only the beginning, this is a positive step for the country. The opportunity for a third wave of energy development, through unconventional crude oil production, can hardly be considered a gamble for Trinidad and Tobago.
It is, though, becoming an economic necessity-and one that can no longer be ignored.
Source: http://www.petroleum-economist.com/arti ... -tar-sands