Oil

Crude Oil

The process of producing crude oil involves extracting the oil from beneath the earth (onshore or offshore) and bringing it to the surface for local use or for export.

In Trinidad, onshore production is concentrated in three (3) broad areas located in South East Trinidad (e.g. Moruga, Guayaguayare), South West Trinidad (e.g. Point Fortin, Guapo and Forest Reserve) and Central Trinidad (e.g. Central Range Block and Central Block). Offshore, production is concentrated off the North Coast (North Coast Marine Area), the East Coast Marine Area and the South West Coast (South Coast Marine Area).

In Tobago, there is no production onshore, but Shell (formerly Centrica Energy) produces natural gas offshore in Block NCMA 4 off the East Coast and BHP Billiton is conducting exploration drilling off the north east Coast in Block 23 (a).

Oil producers comprise both foreign and local companies. Petrotrin, the largest producer, is state-owned and it contracts smaller companies under arrangements known as Lease Operatorships (LO), Farm Outs (FO), or Incremental Production Sharing Contracts (IPSC), to produce from its smaller oilfields.

Challenges Facing the Oil Industry:

1-      Oil fields are aged/mature- Part of the solution to this problem is to use enhanced oil recovery (EOR) and other techniques to boost production.

2-      Low oil prices and decreasing oil production: By constantly reviewing the taxes and incentives offered to producing companies (i.e. the fiscal regime), T&T can encourage companies to explore for and produce oil.

3-      Pollution (oil spills): Two essential ways of addressing this problem is to improving aged infrastructure (especially at Petrotrin’s Refinery) and for State agencies to better monitor companies to ensure that they comply with environmental standards.

Uses of Crude Oil in Trinidad and Tobago