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Barbados is currently reviewing submissions for its latest offshore round.
|Three operators have submitted bids for the latest offshore licensing round in Barbados, which featured 24 blocks on offer. (Image courtesy of Ministry of Finance, Economic Affairs and Energy)|
Barbados has nearly 100 producing wells onshore with as many as 240 drilled to date since the 1900s. The island currently produces 1,000 b/d of 26-30°-gravity light sweet crude and 1.6 MMcf/d of gas. Its offshore history is slim with ConocoPhillips as the only previous operator, which relinquished its control (with Total SA as partner) of the entire offshore area of Barbados in 2004. The operator’s last offshore seismic survey was completed in 2000. The area holds good prospectivity and several operators are now stepping in.
Barbados’ offshore licensing round closed Sept. 30 this year. Although several players showed an interest in the region, only four operators submitted pre-qualification documents. Of those, three companies submitted bids: BHP Billiton, Windward E&P, and Jupiter Petroleum.
Barbados’ Energy and Environment Ministry started interviews on Oct. 20, and its recommendations scheduled for submission to the cabinet on Nov. 6. According to the ministry, blocks are due to be awarded on Nov. 20. More operators showed interest in the round initially, but according to reports, entry of some was limited more by recent economic uncertainty in world markets rather than the quality of the prospects on offer.
The 24 blocks on offer cover a total of 25,192 sq miles (65,248 sq km). The average size of the blocks on offer is 1,050 sq miles (2,719 sq km) and the water depths range from 3,281 ft to 9,843 ft (1,000 to 3,000 m).
To date, there has been limited offshore activity in Barbados although the state-owned Barbados National Oil Co. (BNOC) produces upward of 1,000 b/d from onshore fields — about 15% of the country’s energy needs. The Sandy Lane 1 and Sandy Lane 1Z were drilled 81 miles (130 km) south of Barbados in 7,000 ft (2,135 m) of water (Sandy Lane 1Z as a sidetrack) and recorded gas shows although it was only methane with no presence of heavier oil or gas. The greatest potential appears to be in the southern and western areas offshore Barbados in the Barbados and Tobago Troughs and along the Barbados Ridge, however recent successes in Trinidad and Tobago and offshore Venezuela are encouraging companies to move northward.
Each license is valid for eight years divided into two or three phases depending on the prospectivity of each block. The ministry has good data on five blocks, which will have a first phase of one to three years with a 50% relinquishment, second phase in years four to six with 50% relinquishment, and a third phase for years seven and eight.
Limited data is available for eight of the blocks and a first phase from year one to four with 50% relinquishment, and a second phase from year five to eight. The remaining eleven blocks have an unknown prospectivity with phase structures similar to those blocks with limited data.
Extension plans will be available for the completion of activities specified in an appraisal plan or to locate a market for non-associated gas discoveries. Commercial discoveries will qualify the licensee to apply for a production license.
In addition to a signature bonus, each participant in the round was required to bid a minimum annual training expenditure of US $100,250 and an annual coastal and marine environment research fee of $50,125. No specific amounts for bids offered have yet been released. The ministry also states that its carried interest will be 10%, 15%, or 20%. The state will have the option to assume all or part of its interest in a production license at start up of production. Exploration costs (excluding dry holes) will be reimbursed out of the State’s share in production at no more than 25% per year.
Specific awards have not been listed for the three operators who submitted bids. For an extensive list of the available blocks and the terms set forth by the government of Barbados visit the Ministry’s Web site at www.energy.gov.bb.