March 25, 2010 / 3:48 PM / 10 years ago

BP Trinidad needs capital to sustain gas output

* Firm warns of “steep declines” without capital inflows

* Deep-water gas next frontier for energy-rich nation

PORT OF SPAIN, March 25 (Reuters) - BP Trinidad and Tobago needs capital investment totaling up to $600 million per year to sustain its current level of production of 450,000 barrels of oil equivalent per day, the company’s top executive said.

“We estimate that it would take U.S. $500 to $600 million in annual capital investment to sustain our current production capacity,” said BPTT Chairman and President Robert Riley.

Speaking to a meeting of business leaders on Wednesday, he warned of “steep declines in our existing production reservoirs and for BPTT’s business” if the necessary investment fails to materialize.

Major upstream companies operating in the twin-island Caribbean country, which is a leading global supplier of natural gas, include British Gas Trinidad and Tobago, Repsol (REP.MC) and BHP Billiton (BHP.AX) BLT.L.

All have large international parent companies with significant assets and revenues for capital expenditure.

BPTT, a subsidiary of BP Plc (BP.L), is the largest natural gas producer in the country. Though Riley said there was enough gas in place to sustain BPTT’s current contracts and obligations to 2025, he warned it could have a significant challenge on its hands over the next decade if it fails to make a successful new find, beyond the 12 offshore platforms where it currently operates.

Deep-water acreage represents the next exploration frontier in Trinidad and Tobago, but it will demand strong balance sheets to support what will be billion-dollar investments and proven track records of technology application and deep-water exploration capability, Riley said.

“We are clearly at a point where we are relying on exploration success in the deep waters off Trinidad and Tobago for expansion of our hydrocarbon industry,” Riley added.

Trinidad and Tobago’s energy sector produces 4 billion cubic feet a day of gas, with 60 percent exported as liquefied natural gas (LNG), 27 percent used in the petrochemical sector and 7 percent for power generation.

A gas audit released in December 2008 by U.S.-based petroleum consultant Ryder Scott showed that Trinidad and Tobago’s proved reserves stood at 15.4 trillion cubic feet, down 1.6 trillion from an audit a year earlier.

Probable reserves were estimated at 8.5 tcf and possible reserves at 6.3 tcf. (Reporting by Linda Hutchinson-Jafar; Editing by Lisa Shumaker)

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