Sources say that Shell is the preferred bidder in Trinidad for a shallow water block

Three people familiar with the process have confirmed that Trinidad and Tobago has selected Shell as its preferred bidder to bid on a shallow-water block. This bidder beat out BP and EOG Resource.

Trinidad and Tobago's natural gas production has declined in recent years, and the country has struggled to supply its petrochemical and liquefied gas plants. The government organized bid rounds and pressed producers to deliver the first output of offshore projects.

Shell and BP have the largest stakes in Trinidad's Atlantic LNG Project, which is a 15.3 million ton per year project. They are trying to increase production to ensure feedgas for the trains.

Shell and the government are in talks about the Modified U (c) block. This is the most controversial of the 13 areas that the Caribbean government offered in an auction for shallow water last year.

Official data estimates that the 13 areas have a total gas resource of 13,4 trillion cubic feet.

Shell and BP refused to comment. Trinidad's Government and EOG didn't immediately respond to requests for comments.

EOG and BP were the only bidders for the Lower Reverse L Block, NCMA 4(a) and NCMA 2 in the May shallow water auction. Reporting by Curtis Williams, Houston; Editing and proofreading by Lisa Shumaker

(source: Reuters)