www.advisian.com

Energy Conference Trinidad and TobagoBrian McShane - Senior Vice President, Americas

Deep Water in the Caribbean

As we journey through the world we see continual changes in the energy sector ranging from how it’s consumed, to a heightened sensitivity for social and environmental impacts and significant reductions in commodity pricing.

Change is inevitable, but today’s energy sector - particularly in hydrocarbons - is dramatically changing relative to the norms that we have become used to over recent years.

The Evolving World of Energy

Commodity Pricing

• Reducing available capital for projects• Forced industry consolidation• Reducing available resource capacity• Experienced personnel and knowledge

base are retiring

United Nations - Paris Agreement• 125 of 197 countries have ratified the

proposal of keeping global warming to <2⁰C (including many CARICOM nations – e.g. Barbados, Guyana, Trinidad and Tobago)

• Forecasts estimate that fossil fuel consumption needs to reduce by 35%

• A number of countries have drafted their Nationally Determine Contributions (NDCs)

Global WarmingTotal U.S Greenhouse Gas

Emissions by Economic Sector in 2014

• Forecasts are predicting a significant increase in the use of renewable energy over the next 25 years

• Power generation capacity is significant ->50 MW

• Cost of energy storage is reducing

Renewable Energy

• Battery technology• Electric vehicles (e.g. cars, bikes etc.)

How quickly will they change the landscape?

New/Disruptive Technologies

It wouldn’t be the first time: • 1913 - New York Avenue • Model T Ford first produced in 1908 • Now cars are the main form of

transportation • This happened in less than 13 years

New/Disruptive Technologies

Image credit: George Grantham Bain Collection http://www.shorpy.com/node/204?size=_original Reference: https://www.youtube.com/watch?v=Kxryv2XrnqM

Industry Response

• Reduced CAPEX solutions• Accelerated delivery schedules• Ensure certainty of outcomes• Compete globally

Cost Efficiency

Refresh Energy Delivery Strategies• Start to balance the energy footprint –

not just fossil fuels Revisit Energy Consumption• CNG vehicles• Use Renewables to supplement energy• Electric vehicles including bikes when

they are ready

Energy Consumption

• One team• Recognize that we have to change how

we work together• Align stakeholders across the value

chain (Upstream, midstream, downstream) to enable projects to be successful

• Be proactive in helping each other• New partnering/ contracting strategies

Collaboration

• Revisit alternate solutions that provide significant CAPEX reductions e.g. Low Heave Semi Submersible

• Implement effective standardization

New Solutions/Approaches

Deep Water Activity in the Caribbean

Trinidad• Exploration wells drilled

by BHP during 2016 – LeClerc (BHP/Shell) and Burrokeet (BHP/BP). Results being assessed

• BP are planning exploration in the Columbus basin

• Continued exploration activity

Deep Water Activity in the Caribbean

Guyana• Exploration continues to be

successful on Liza• ExxonMobil moving forward

with Liza development Sanction scheduled for 2017

• Seismic surveys:• Completed in adjacent block

(ExxonMobil/Mid Atlantic/JHI) currently under assessment

• More planned for other blocks in 2017 (Repsol/Tullow)

Suriname• Increased activity in

block ownership• Seismic program for

deepwater Block 58 (Apache) and Block 42 (HESS/Chevron /Kosmos)

• Drilling planned by Apache in Block 53

• Knowledge sharing and Public Education (e.g. publications, lectures, workshops related to deepwater etc.)

• Coordinate resource needs across the CARICOM nations (e.g. Supply of fuel, vessels etc.)

• Expand existing port and key side facilities to meet the needs:• Receiving, offloading, and loading of line pipe, subsea structures, umbilical

reels, etc.• Multi-purpose service vessels (MSVs), and barges,

• Develop a Long-term plan with all stakeholders• Explore capability of existing facilities for some subsea structure fabrication and

subsea system integration testing (SIT)

Expanding Deepwater Capability

• Deliver the most CAPEX efficient projects – accelerated schedules, effective solutions

• Start looking a Energy Supply and Consumption differently• Embrace Global Warming and the importance of emissions

management• Rekindle our Pioneering Spirit

Key Takeaways

But remember…

Collaboration is key