Trinidad and Tobago
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More drillingnecessary toturn aroundthe oil decline

Letters to the Editor
Newsday

THE EDITOR: The sides are lining up: Russia, Iran, Turkey; Ukraine, Europe, US. It could end bad.

The only thing good that could come out of this is that TT would benefit from higher oil prices.

This year Heritage Petroleum Co Ltd plans to drill at least ten shallow wells and three deep wells on land, as well as five wells offshore.

The smaller oil producers combined should drill an additional 20 wells on land this year.

Total daily oil production from all wells drilled this year could add an additional 3,000 barrels of oil per day (BOPD) to our daily output.

TT really needs to have at least one drilling rig offshore and two on land drilling continuously to turn around our decline and increase production.

As the oil prices have declined over the last few months and the wholesale price index (WPI) is presently below US$75, no supplemental petroleum tax (SPT) will be paid by the independent operators. With no SPT to pay, more wells will be drilled by the operators.

Three wells have already been drilled on land by the operators this year so far, and Heritage will start its onshore wells by mid-February.

The independent producers will drill more wells if they could write off 100 per cent of the cost of these wells against SPT. Presently only 30 per cent of the drilling costs are allowed against SPT.

In 2023, earnings from oil is expected to be $25 billion of the $56 billion revenue budget. The Finance Minister pegged the budget price at US$92.60 per barrel. Ukraine gave us some additional revenue, but how much is uncertain and also this price has not really been sustained in the new year.

Remember too that gas production the last few years was on the decline, so unless production is ramped up we may get a double whammy (the Dragon still has a lot of tail to grow). So where are we really?

GORDON LAUGHLIN

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