Trinidad and Tobago on Wednesday launched an auction of 13 shallow-water oil and gas exploration blocks, more than double the number of blocks in its last auction, as the Caribbean nation tries to increase energy supplies for its industrial based, according to people familiar with the matter.
In a 2019, the government offered six blocks and a Shell and BP consortium bid for three. Those bids were rejected by the government for failing to meet the minimum threshold.
Trinidad is Latin America's largest producer of 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.
The latest auction was launched in Port of Spain a year later than originally planned by the energy ministry.
The government is offering 13 shallow-water blocks, all located on the continental shelf near areas where both oil and gas are being produced. The round's period for receiving bids will finish on April 2, the people said.
Trinidad Finance Minister Colm Imbert this week announced changes to the fiscal regime, including a reduction in tax liability for shallow-water producers, which Trinidad hopes will make it more attractive to bidders.
Among the changes are an increase of cost recovery to 60% from 50%, the windfall tax was reduced to 50% from 70%, the period for exploration increased to eight years from six years and the bid fee was reduced to $30,000 from $40,000 the Ministry announced at the launch of the bid round.
BP and Shell operate in shallow waters off Trinidad, with BP producing an average of some 1.3 billion cubic feet per day (bcfd) of natural gas and Shell 750 million cubic feet per day (mcfd), according to recent data from the energy ministry.
BP and Shell recently signed production-sharing contracts to explore three deepwater blocks in Trinidad and are the largest shareholders in the country's flagship LNG project, Atlantic LNG.
(Reuters - Reporting by Curtis Williams in Houston; Editing by Lisa Shumaker and Marguerita Choy)