British energy major BP Plc (BP)’s unit BP Trinidad and Tobago (“BPTT”) plans the appraisal of the deepwater exploration blocks offshore Trinidad, following two production sharing agreements with the Caribbean state government.
BP intends to explore blocks - 23(a) and TTDAA 14 - awarded to the company in the 2010/2011 deepwater competitive bid round in July 2011. The company holds 100% working interest in both the blocks.
Located about 186 miles northeast of BPTT’s Galeota Point operations’ base, Block 23(a) spans 1,000 square miles. Spread over further 385 square miles, Block TTDAA 14 lies adjacent to Block 23(a). The blocks lie in water depths averaging over 6,560 feet.
BP’s operations in Trinidad account for over 50% of Trinidad and Tobago’s natural gas yield. BPTT is also one of the leading producers of hydrocarbons in the states of Trinidad and Tobago. In 2011, BPTT’s average daily production was 408,000 barrels of oil equivalent.
BP’s operation in Trinidad and Tobago dates back to 1960s. Currently, the company has 13 offshore platforms and 2 onshore processing facilities. The energy giant also has stakes in all of the four Atlantic liquefied natural gas production trains on Trinidad.
The exploration activities in Trinidad and Tobago offer the company new prospects with high potential, as these deepwater regions remain mostly unexplored. We believe, the company's new strategy of active portfolio management, higher exploration activity, and refining and marketing repositioning will generate value for shareholders.
BP holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation on the stock. The company faces competitive threats from Chevron Corporation (CVX) and Total SA (TOT).
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