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BP will invest $2.5 billion to boost Trinidad LNG production
Larry Persily Petroleum News government affairs editor
BP PLC Chief Executive Office John Browne told business and government leaders of Trinidad and Tobago that the London-based energy giant plans to invest $2.5 billion over the next three years to boost natural gas production from the waters off the island nation’s east coast.
He said BP sees its Trinidad and Tobago natural gas production increasing from an average 2.24 billion cubic feet per day to almost 3.1 bcf per day by 2008, with the United States as BP’s primary market for the expanded supply of liquefied natural gas.
“All the reserves, contracts and projects are in place to accommodate that growth,” Browne told the May 20 luncheon gathering in Port of Spain, the nation’s capital.
BP has significant holdings in gas production and liquefaction in Trinidad through its interest in the Atlantic LNG Co. of Trinidad and Tobago. The company, established in 1995, operates three LNG trains and will put Train 4 in operation at the end of 2005. And there is a potential for a fifth train in the future, Browne said.
Partners include BP, British Gas, Belgium’s Tractebel, Repsol-YPF of Spain and the National Gas Company of Trinidad and Tobago. More production growth planned “We believe there is an even greater potential to come, and that’s why we are planning to resume exploration drilling this summer in the Columbus basin so that we can establish the basis for a further increase in production capacity beyond Train 4,” Browne told his audience.
The basin is just southeast of the islands that comprise the Republic of Trinidad and Tobago, just a few miles offshore from Venezuela. The republic’s two islands cover about 2,000 square miles and are home to 1.1 million residents.
BP’s upcoming $2.5 billion gas investment in the former British colony follows the $9 billion the company has spent in Trinidad in the past two decades, the CEO said.
Though a significant amount of money, BP’s three-year commitment to building up its LNG export business in Trinidad is just one of several ventures under way at the global energy giant. BP wrote checks totaling $9.6 billion in 2003 on capital expenditures for oil and gas exploration and production, according to its annual report, earning an average 16 percent return on its capital last year.
In deciding where to spend its investment dollars, BP looks for more than good oil and gas prospects, Browne said.
“International business looks for a number of things in choosing where to invest,” he said. “Transparency and good governance, a clear and stable policy environment, open markets which allow free competition, secure legal and fiscal regimes, and economic stability. BP will donate $10 million for university “Most important of all,” he added, “is the potential of the country, and that is embodied in the priority given to education.”
To help the republic build up its education system, Browne announced BP would donate $10 million to help establish the proposed University of Trinidad and Tobago. “We believe that such work is fundamental to the economic future of any country,” he said.
Primary education is compulsory in Trinidad and Tobago, with a 98.6 percent literacy rate, according to U.S. government statistics. Most residents finish the required seven years of school, with the average adult attending almost eight years of school.
Though other schools offer university programs for its residents, the nation does not have its own university.
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