Trinidad's Shallow Water Auction: BP, Shell, EOG Reportedly Placed Bet Lured By New Terms

Zinger Key Points
  • BP, Shell, and EOG reportedly submitted bids for four oil and gas blocks in Trinidad and Tobago's 2023 shallow water auction.
  • All three companies bid on the Modified UC block; EOG bid on three blocks, Shell on one, and BP on two.

BP p.l.c. BPShell plc SHEL and EOG Resources, Inc. EOG reportedly offered six bids to Trinidad and Tobago.

The bids are for four blocks to explore for oil and gas as its 2023 shallow water auction closed on Monday, reported Reuters.

There were no other bidders in the auction, and Trinidad’s Energy Minister Stuart Young said the winners would be announced in four months.

As per the report, all three companies bid for the Modified UC block close to the Teak, Sammaan, and Poui-producing fields.

In particular, EOG bid on three blocks (the Modified UC, the Lower Reverse L, and NCMA 4), Shell had one bid on Modified UC , and BP bid on Modified UC and NCMA 2. 

Notably, in October 2023, the Trinidad government had put out 13 blocks for bids. The results reflected that nine of the 13 blocks did not receive any interest, and all the bids were from companies already operating on the Caribbean island.

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After its 2019 bid round failed, Trinidad made several changes to the fiscal terms to attract more bids, the report further added. This includes reducing the tax liability for shallow-water producers and raising cost recovery to 60% (from 50%), cutting the windfall tax to 50% (from 70%), boosting the exploration period to eight years (from six years), and lowering the bid fee to $30,000 (from $40,000).

ReadShell’s LNG Gambit: Aussie LNG To Reportedly Quench Asia’s Thirst

Notably, Trinidad is Latin America’s largest producer of liquefied natural gas (LNG), with an installed capacity of 15 million metric tons annually of super-cooled gas. Also, it is one of the world’s biggest exporters of methanol and ammonia, but its plants have been operating below full capacity in recent years due to a lack of gas.

Price Action: BP shares are up by 1.03% at $37.10 and SHEL by 0.24% at $70.99 premarket at the last check Tuesday. EOG shares closed lower by 0.61% at $123.27 on Friday. 

Photo via Shutterstock

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