NGC on Dragon deal, exploration company: It’s common practice

The content originally appeared on: Trinidad and Tobago Newsday

THE National Gas Company of TT (NGC) says it is common practice to remain tight-lipped about new developments in deals including the establishment of subsidiaries such as NGC’s newest subsidiary, NGC Exploration and Production Ltd (NGCE&PL).

That company will be the license holder for production in the ongoing Dragon Gas deal between TT and Venezuela.

In an e-mail correspondence through head of communications and brand Nicola Ghouralal, NGC said the strategy was one it had used for years.

“This is the structure utilised by NGC over the last ten years or more for all its investments across the energy value chain, including several of its current upstream participating interest investments in TT.”

National Energy Ltd, TTNGL Ltd, Labidco and NGC Green Ltd are part of NGC’s overall group of companies listed on its website. The group also has more than 15 subsidiary companies and more than ten associated companies.

NGC said it was standard global practice for energy companies with operations across the value chain to manage investments through subsidiary companies.

The structure protects NGC from potential liabilities but also ring-fences the particular investment.

NGC also said NGCE&PL would partner with Shell in the exploration and production aspect of the deal.

“Shell will be the operator of the Dragon E&P license, NGC will be a non-operated joint venture partner.

“This structure is not only consistent with international practice for exploration and production-sharing contracts including in TT, but is also consistent with NGC’s participation in other upstream investments.

The establishment of NGCEPL was raised during an opposition press briefing on February 4, when MP DR Roodal Moonilal claimed NGC formed a “secret” company to assist with the Dragon Gas deal. The company was listed along with Shell Venezuela SA as the company involved in the 30-year license for the Dragon Field.

Almost immediately after the press conference, Energy Minister Stuart Young, in a statement, denied Moonilal’s allegations that NGCE&PL was a secret company.

Mark Loquan and chairman Dr Joseph Ishmael Khan were named directors of NGCE&PL, despite the fact that Loquan will be stepping down as director on the NGC board and its affiliates on August 31.

NGC said Loquan would continue as director of the company until his exit.

“As the company begins the executive search for a successor, Mr Loquan will continue to work with the board and leadership team to execute NGC’s strategic plan. Once a successor is named he will work with the new president to ensure a smooth transition.”