BHP Billiton announces $327M US to develop Trinidad oil and gas field

www.canada.com Canadian Press Thursday, March 13, 2003

PORT-OF-SPAIN, Trinidad (CP) - Australian energy and mining giant BHP Billiton plans to spend $327 million US in developing its first oil and natural gas field in Trinidad, a project partly owned by Canada's Talisman Energy Inc.

BHP estimates the field off the northeast coast of Trinidad - not far from the prolific oilfields off the coast of Venezuela - contains 160 million barrels of oil and 1.75 trillion cubic feet of natural gas.

Talisman, the Calgary-based company that is one of Canada's most international oil producers, has a 25 per cent stake in the Trinidad project. French oil giant TotalFinalElf, owns 30 per cent.

The Trinidad oilfield is one of several new projects Talisman believes will help the company replace lost oil production from its controversial Sudanese joint venture, which Talisman sold for $1.1 billion in a deal that closed this week.

Talisman was unable to comment about the BHP announcement Thursday, but energy analyst Brian Prokop of Calgary-based Peters & Co. said the Trinidad play is "a field of size."

"And it will also identify Trinidad as a new area for Talisman," he said, noting the company is currently doing exploratory onshore work in the Caribbean island as well.

"Obviously they think there's some potential there, otherwise they wouldn't have purchased assets on the eastern side of the island."

Talisman is also expected to profit from the working relationships with TotalFinaElf, one of the world's largest energy companies.

Talisman is also expecting production from new projects offshore Malaysia and Vietnam as well as Algeria to regain its reputation as a developer of significant oil properties throughout the world.

On the Toronto stock market Thursday, Talisman shares (TSX:TLM) fell 53 cents to close at $58.87 Cdn.

When operating, the new field will boost Trinidad and Tobago's output of crude oil by nearly 70 per cent. Government officials have said such an investment will bring new wealth to the Caribbean country.

The first oil from what is being called the Angostura Oil and Gas field is scheduled to be pumped by the end of next year. The field has an estimated production life of 19 to 24 years, the company said in a statement.

"With our sanction of the Angostura project, Trinidad and Tobago will become a core development area for BHP Billiton," chief executive Philip Aiken said. He said once "production begins, Angostura will be one of the company's largest operated assets."

The company, based in Melbourne, Australia, is a diversified resources company with interests in oil, natural gas, aluminum, coal, iron ore, titanium minerals, nickel, diamonds and silver.

In Canada, BHP owns and operates the Ekati diamond mine in the Northwest Territories, Canada's first diamond mine, which began production in the late 1990s.

Trinidad and Tobago's economy, already based largely on oil and natural gas, currently produces 150,000 barrels of oil a day. BHP expects the Angostura field will produce 100,000 barrels a day.