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Do you know how oil is made?
The oil industry for many years the mainstay of the Trinidad and Tobago economy. Ever since commercial
production started in 1908, oil has held an important place in the national economy, reaching a zenith between
1974 and 1981 - the so called "boom years". During this period, because off high levels of domestic production
and high oil prices, the economy experienced boom-conditions characterised by high rates of growth real Gross Domestic
Product (G.D.P.), high levels of government revenue and expenditure, balance of payment surpluses, a strong foreign
exchange reserve position, rapid growth of income, and a significant reduction in the level of unemployment.
At present crude oil production in Trinidad and Tobago averages 170,000 barrels of oil daily
(bopd) and natural gas production averages 691.5 million cubic feet per day (mmcf/d). East Coast crude from Amoco
(53% of the country's total production) is exported and the rest is refined locally. Natural gas production is
used for electricity generation by T&-TEC and for energy-based industries at Point Lisas (steel, methanol,
urea, ammonia etc.)
The producing companies operating in Trinidad at this time are Amoco (totally foreign owned),
Trinidad-Tesoro, Trintoc, Trinmar and Premier Consolidated Oilfields Limited.
Other companies with leases in Trinidad, are Tenneco, Occidental, AGRP, and Deminex.
HISTORICAL
The history of oil exploration in Trinidad goes back to the 19th century, when the first oilwell
was drilled in Trinidad. The first successful oil well was drilled in 1866. Commercial production began in 1908.
Oil production fluctuated over the years - during the 1940's and 1950's, it averaged about 50,000 bopd. in the
1960's production peaked at 183,298 bopd; in the early 1970's it dropped to 130,000 bopd. In the 1977 '78 period
production peaked again at an all time high of 230,000 bopd.
Over the years, more than 100 oil companies have been involved in the petroleum industry - in
Trinidad, including multinational giants such as Shell, Texaco, BP, to little known companies
such as Golding Petroleum and Siparia Trinidad Oilfield Ltd. (STOL).
STRUCTURE
The petroleum industry could be conveniently divided into four (4)major components:
(1) Exploration
(2) Production
(3) Refining
(4) Marketing
EXPLORATION
Exploration involves activities related to the search for hydrocarbons. People involved in this
area of the petroleum industry include geologists, geophysicists, paleontologists (who study animal fossils), palynologists
(who study plant fossils), and petroleum engineers .Oil is formed from the remains or dead micro-organisms which
accumulate in sediments on the sea floor. Over millions of years oil globules migrate and accumulate in what are
called 'reservoirs,' below the surface of the earth. These reservoirs can either be sandstones or limestones. The
exploration effort involves finding these oil-bearing reservoirs.
Most of the early oil fields on land were found by drilling near to oil-seeps on the surface
and from the mapping of surface anticlines by geologists. However, the new oilfields off the east coast were found
using very sophisticated technology. At present, geologists and geophysicists from all the companies are actively
involved in the search for new hydrocarbon reserves in Trinidad and Tobago.
PRODUCTION
The production arm of the Petroleum Industry involves all activity related to the drilling, production,
storage and transportation of crude oil. People involved in this area are petroleum engineers, production engineers,
drillers, mechanical engineers, technicians and a wide range of other skilled personnel.
Once a geologist identifies an area of hydrocarbon accumulation, the next phase involves the
drilling of a well; this is the responsibility of the driller. In Trinidad, wells range in depth from less than
100' to over 15,000'. If oil is found and there is sufficient pressure at depth, the oil is allowed to now via
pipelines into a storage tank. In areas of low formation pressure, oil is produced by the use of submersible pumps.
Most of our land wells are pumping wells, whereas the offshore wells are mostly flowing wells. From the storage
tanks the oil is pumped to the refinery (Pointe-a-Pierre or Point Fortin) for processing. In the case of the East
Coast on, it is pumped into tankers for export.
After several years of producing oil, a well 'dies' i.e. it can no longer produce. This does
not necessarily mean that there is no more oil underground, in fact, the well by " time has only produced
15 – 20 % of the oil. in-place. Methods of enhanced oil recovery (EOR) can now be implemented to boost production.
This includes steam injection, water flooding or carbon dioxide flooding. At present, there is tremendous potential
for EOR projects on land in Trinidad.
REFINING
In Trinidad we export our east Coast oil as crude and pipe the rest to our local refineries for
processing. The total refining throughput capacity in Trinidad is approximately 330,000 bopd. At present only 85,000
bopd. Is being refined.
Crude oil consists of a complex of many different hydrocarbon compounds. Each compound has a
different boiling point. The fundamental principle in oil refining is called fractional distillation. This involves
the heating of crude oil to progressively higher temperature. With each incremental increase in temperature different
compounds evaporate and these are subsequently cooled to give the various products. Other more complex treatments
(desulphurization etc.) are carried out after this basic Process. The main products produced at our refineries
are fuel oil, 94solene, kerosene, aviation fuel, lubricants, and greases.
MARKETING
A Product has no value if it cannot be sold. Thus, marketing is of major importance to the oil
industry. Prior to thc- nationalization drive in the oil industry, marketing was handled by the major multinational
companies (Texaco, Shell, Esso etc.). These companies have very sophisticated international marketing arrangements.
At present, Amoco markets its own oil -- it ships all its East Coast crude to a special refinery in the United
States.
Most of our locallv produced refined oil is sold to Caricom and the Eastern Seaboard States of
the United States of America. National Petroleum Marketing Company Limited handles all aspects of marketing.
The oil industry has long been, and will continue to be for some time, the main industry in Trinidad
and Tobago. At Present, there are estimated reserves to carry us into the 21st Century. However, oil is a wasting
asset and once new reserves are not found to replace produced reserves, the industry will inevitably grind to a
halt. Because of this, serious attempts are now being made to reduce the country's dependence on oil by diversifying
the economy. Whatever the future holds, Oil would have left its indelible mark on the history of the people of
Trinidad and Tobago.
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