BP, Shell and EOG vie for acreage in Trinidad’s oil and gas auction

By Curtis Williams

HOUSTON (Reuters) – Trinidad and Tobago received six bids from BP (NYSE:BP), Shell (LON:SHEL) and US shale producer EOG Resources (NYSE:EOG) on four blocks to explore for oil and gas as its 2023 shallow water auction closed on Monday.

Trinidad plans to announce the winners in four months, Energy Minister Stuart Young said at the closing of the auction.

All three companies bid for the Modified UC block, which is close to the Teak, Sammaan, Poui producing fields. The auction had no other bidders.

Trinidad is Latin America’s largest producer of liquefied natural gas (LNG), with installed capacity of 15 million metric tons per year of the super-cooled gas. It also is one of the world’s biggest exporters of methanol and ammonia, but its plants have been operating below full capacity in recent years due to a lack of gas.

In October 2023 the Trinidad government put out 13 blocks for bids. Monday’s results mean that nine of the 13 blocks did not receive any interest and all the bids were from companies already operating on the Caribbean island.

EOG Resources bid on three blocks, the Modified UC; the Lower Reverse L, which is west of Shell’s Manatee discovery and on the border with neighboring Venezuela; and NCMA 4, in an area operated by Shell.

Shell had one bid on Modified UC while BP, which bid on Modified UC also placed a bid for NCMA 2 which is north of Trinidad and not in the Columbus basin where the company has operated since the 1970s.

Trinidad made several changes to the fiscal terms to attract more bids after the failure of its 2019 bid round, including reducing the tax liability for shallow-water producers, raising cost recovery to 60% from 50%, cutting the windfall tax to 50% from 70%, increasing the exploration period to eight years from six years and lowering the bid fee to $30,000 from $40,000.