ExxonMobil Returns to Trinidad and Tobago, Investing Billions in Hydrocarbon Exploration

Strategic Insights -

ExxonMobil is set to invest a significant sum in Trinidad and Tobago after more than two decades, with the potential investment amounting to up to US$21.7 billion. The strategic move follows the signing of a Production Sharing Contract (PSC) between ExxonMobil and T&T Deepwater Ltd. The agreement marks a significant milestone for the country's energy sector and has the potential to unlock vast hydrocarbon resources. Prime Minister Kamla Persad-Bissessar hailed the agreement as a testament to the country's welcoming energy policies and expressed confidence in the project's ability to deliver high-margin returns and long-term prosperity for the nation.

Key Takeaways:

  • ExxonMobil to invest up to US$21.7 billion in Trinidad and Tobago if hydrocarbons are discovered offshore
  • The investment is part of a Production Sharing Contract (PSC) signed between ExxonMobil and T&T Deepwater Ltd
  • ExxonMobil will spend approximately US$42.5 million during the mandatory first phase of the project, with total development costs potentially ranging between US$16.4 billion and US$21.7 billion
  • The agreement will enhance Trinidad and Tobago's national subsurface database and deepen the country's understanding of its petroleum potential
  • The ultra-deepwater exploration has the potential to deliver very large volumes at high margins, easily offsetting the capital costs and technical challenges inherent in the project
  • Prime Minister Kamla Persad-Bissessar stressed the importance of energy security and emphasized the country's commitment to minimising emissions while maximising the benefits from its resources
  • The agreement is expected to lead to more agreement-signing ceremonies in the future, with the country aiming to expand exploration frontiers
  • ExxonMobil will drill two exploration wells in the optional second and third phases of the exploration period, with financial obligations amounting to US$12.8 million in phase one
  • The eastern deepwater area exceeds 2,000 metres in depth and spans 7,165 square kilometres, which is larger than Trinidad and Tobago's land area
  • Petroleum geologist Dr Krishna Persad estimates that Trinidad and Tobago's undiscovered oil resources could total up to five billion barrels

Statistics:

  • US$21.7 billion: the potential investment by ExxonMobil in Trinidad and Tobago if hydrocarbons are discovered offshore
  • US$42.5 million: the amount ExxonMobil will spend during the mandatory first phase of the project
  • US$16.4 billion: the lower end of the total development costs potentially ranging between US$16.4 billion and US$21.7 billion
  • US$12.8 million: the value of the financial obligations in phase one of the project
  • 7,165 square kilometres: the size of the eastern deepwater area
  • 5,128 square kilometres: the land area of Trinidad and Tobago
  • 5 billion barrels: the estimated undiscovered oil resources in Trinidad and Tobago

Sources:

  • Global Data Point
  • SyndiGate Media Inc.