The Company’s core strategy focuses on the Energy Transition to greener energy. The pragmatic role of gas is recognised as a “sustainable” source of energy to bridge the gap between the expectations of a green energy goal versus the economic and socially equitable reality of preserving an orderly and affordable energy market during what might be perceived as a new industrial revolution.
The Role of Gas in the Energy Transition
The Company is also of the opinion that the upstream gas industry has much expertise to offer the renewable energy sector. This is particularly relevant in the area of green hydrogen in relation to subsurface storage in former gas reservoirs; transport using gas infrastructure; potential blending of green hydrogen; and natural gas for power generation.
The Board believes that the Company’s medium-term future is tied to gas as being the flexible energy source to replace coal and oil as a fuel for power generation to help de-carbonise the energy sector, thereby reducing CO2 emissions, as gas by comparison is less CO2 pollutant.
Reducing current high levels of CO2 emissions by replacing carbon-intensive fuels used in the industrial sector in Morocco is a realistically achievable near-term objective for executing the Company’s high level business strategy.
Adapting Strategies for Carbon Capture and Renewable Energy Integration
The Company has assembled material and influential equity positions in a portfolio of assets combining existing gas discoveries and new gas prospects adjacent to infrastructure owners seeking new opportunities to utilise spare capacity and industrial markets heavily reliant on imported fuel oil.
Following the Company’s presentation to the Ministry of Energy and Energy Industries (“MEEI”) Carbon Capture and Carbon Dioxide (CO2) Enhanced Oil (“CO2 EOR”) Recovery Steering Committee on 17 August 2021, the Government of Trinidad and Tobago is seeking consultation on its Draft Policy to Create Carbon Capture Utilisations and Storage Specific Legislation.
Trinidad is a high emitter per capita of CO2 gases due to its large number of ammonia and methanol plants. CO2 sequestration in reservoirs in Trinidad’s mature oil fields is an area where the Company can seek to apply its business development strategy using its practical expertise gathered from the successful execution of its Inniss-Trinity pilot CO2 EOR Project.
The implementation of CO2 sequestration must be justified both by a credible commercial model, access to international funds and by providing a socially just and equitable protective umbrella for local communities and economies which are largely dependent on the oil and gas sector for their immediate livelihoods.
Efficient Operations and Strategic Adaptation
The Company believes that the availability of investment capital for the fossil fuel sector is becoming increasingly squeezed due to re-alignment of available funds with green energy projects.
Accordingly, the business strategy of the Company has been adapted to reflect these changed circumstances and to minimise where possible its capital requirements through:
- Ensuring that all field operations are carried out in an efficient, safe, environmentally aware and cost-effective manner to eliminate, where possible, unnecessary waste;
- Using innovative technologies, such as Sandjet, to address specific geological circumstances that could impact well deliverabilities;
- Determining that all contracts with service and equipment providers are robustly negotiated to obtain the best possible commercial terms for the Company;
- Utilising management’s extensive experience, know-how and industry network to build a low-cost operating capability;
- Focussing capital resources on only projects where near-term monetisation is a realistic goal and can be achieved within the constraints of a modest capital outlay;
- Spending capital only in those geographic jurisdictions where there remains a strong internal market demand for the products that the Company may produce in the near-term;
- Directing capital towards those jurisdictions where the Company’s business development strategy is aligned with current government and regulatory policies;
- Focussing on projects that have robust project economics with considerable headroom and therefore have high potential to generate positive cash flow in the short-term following operational success and which are capable of creating assets suitable for alternative monetisation through near-term trade sales to peer companies and consumers of energy;
- Addressing projects in countries that have higher ESG potential where the Company can make a real and sustainable difference;
- Ensuring that management is enabled and incentivised to maintain its high profile in the investment community which has resulted in ten successful over-subscribed Placings since 2018 whilst operating and maintaining an undiluted equity interest in the Company’s portfolio of material projects. This was achieved against the backdrop of financial markets impacted by BREXIT, COVID, Climate Change Activism, inflationary pressures generated by the Energy Crisis and the Ukraine-Russia and Red Sea conflicts.
Geological risk mitigation has been enacted through screening suitable projects for the Company’s portfolio and through showing flexibility and creativity in overcoming operational hurdles and subsurface issues using management’s extensive and relevant industry experience. This expertise and know-how is essential to the Company’s business development strategy as it allows the Company to move to secure assets and opportunities that have been historically over-looked and under-valued. Management’s creative and innovative thinking facilitates the development of those assets selected for the Company’s portfolio.