BP to take full control of Calypso gas field

An­drea Perez-Sobers

Se­nior Re­porter

an­drea.perez-sobers

@guardian.co.tt

BP is tak­ing full con­trol of one of Trinidad and To­ba­go’s largest, un­de­vel­oped off­shore gas dis­cov­er­ies, a move en­er­gy ex­perts say could ac­cel­er­ate de­vel­op­ment of a project ex­pect­ed to strength­en the coun­try’s long-term gas sup­ply and ex­port ca­pac­i­ty.

The Lon­don-head­quar­tered, multi­na­tion­al en­er­gy gi­ant yes­ter­day agreed to ac­quire Wood­side En­er­gy’s 70 per cent in­ter­est in Block TTDAA 14, giv­ing BP 100 per cent own­er­ship of the Ca­lyp­so gas project and op­er­a­tor­ship once the trans­ac­tion re­ceives reg­u­la­to­ry and Gov­ern­ment ap­proval. The deal is ex­pect­ed to close by the end of 2026.

Ca­lyp­so is an ear­ly-stage deep­wa­ter nat­ur­al gas project lo­cat­ed off­shore north-east of To­ba­go. BP al­ready has an ex­ten­sive pres­ence in T&T as the coun­try’s largest sup­pli­er of nat­ur­al gas and holds a 45 per cent stake in At­lantic LNG.

BP ex­ec­u­tive vice pres­i­dent for Up­stream, Gor­don Bir­rell, said the ac­qui­si­tion builds on the com­pa­ny’s ex­ist­ing op­er­a­tions and in­fra­struc­ture and has the po­ten­tial to un­lock new pro­duc­tion while sup­port­ing long-term growth in the re­gion.

En­er­gy sec­tor ex­pert Dr Thack­wray Dri­ver de­scribed the ac­qui­si­tion as a ma­jor boost for the coun­try’s nat­ur­al gas in­dus­try, say­ing it sig­nals BP’s in­ten­tion to move the long-de­layed project to­wards de­vel­op­ment.

He es­ti­mat­ed Ca­lyp­so con­tains about 3.5 tril­lion cu­bic feet of nat­ur­al gas and not­ed that ex­plo­ration drilling be­gan more than a decade ago. Ad­di­tion­al ap­praisal wells fol­lowed in 2021 as en­gi­neers worked through the tech­ni­cal chal­lenges as­so­ci­at­ed with de­vel­op­ing a deep­wa­ter field.

Dri­ver ex­plained that the block was orig­i­nal­ly award­ed to BHP, whose pe­tro­le­um as­sets lat­er be­came part of Wood­side En­er­gy fol­low­ing the merg­er of those com­pa­nies. BP pre­vi­ous­ly held a 30 per cent stake in the project.

He said BP is ex­pect­ed to con­nect Ca­lyp­so’s gas pro­duc­tion in­to Trinidad and To­ba­go’s ex­ist­ing gas net­work, with much of the out­put like­ly des­tined for At­lantic LNG and in­ter­na­tion­al ex­port mar­kets.

While stress­ing that the ac­qui­si­tion does not rep­re­sent a fi­nal in­vest­ment de­ci­sion, Dri­ver said pur­chas­ing Wood­side’s stake demon­strates BP’s com­mit­ment to ad­vanc­ing the project.

He cau­tioned that pro­duc­tion re­mains sev­er­al years away be­cause of the tech­ni­cal com­plex­i­ty of deep­wa­ter de­vel­op­ment. How­ev­er, once a fi­nal in­vest­ment de­ci­sion is made, en­gi­neer­ing, con­struc­tion and drilling ac­tiv­i­ties would gen­er­ate eco­nom­ic ac­tiv­i­ty, al­though much of the spe­cialised spend­ing would flow to in­ter­na­tion­al con­trac­tors sup­ply­ing drilling rigs and sub­sea equip­ment.

He added that once pro­duc­tion be­gins, the coun­try would ben­e­fit from high­er gas vol­umes, in­creased LNG ex­ports and ad­di­tion­al up­stream tax rev­enues.

For­mer en­er­gy min­is­ter Car­olyn Seep­er­sad-Bachan al­so wel­comed the ac­qui­si­tion, call­ing it an im­por­tant step to­wards bring­ing an­oth­er sig­nif­i­cant off­shore gas re­source in­to pro­duc­tion.

She said con­sol­i­dat­ing own­er­ship un­der BP should sim­pli­fy com­mer­cial de­ci­sion-mak­ing, im­prove project gov­er­nance and in­crease the prospects of reach­ing a fi­nal in­vest­ment de­ci­sion more quick­ly.

Seep­er­sad-Bachan said Ca­lyp­so’s his­to­ry al­so high­lights the need to mod­ernise T&T’s pe­tro­le­um leg­is­la­tion, pro­duc­tion-shar­ing con­tracts, uni­ti­sa­tion frame­work and reg­u­la­to­ry ap­proval process to re­duce the lengthy pe­ri­od be­tween li­cence awards, dis­cov­er­ies and first gas.

She ar­gued that ac­cel­er­at­ing fu­ture de­vel­op­ments such as Ca­lyp­so, Man­a­tee and Drag­on will be crit­i­cal to restor­ing up­stream pro­duc­tion, sus­tain­ing the down­stream en­er­gy sec­tor, strength­en­ing for­eign ex­change earn­ings and main­tain­ing T&T’s po­si­tion as the Caribbean’s lead­ing nat­ur­al gas pro­duc­er and LNG ex­porter.