The Government has resumed the search for oil and gas in Jamaica with the issuing of an exploration licence to British petroleum firm, Tullow Oil Plc.
The company has committed $6.7 billion (US$60 million) to undertake activities off the island’s South coast.
The exercise, which commenced on November 1, is being facilitated under a Production Sharing Agreement (PSA) signed by the Petroleum Corporation of Jamaica (PCJ), and Tullow Jamaica Limited.
The symbolic exchange of the agreement took place during a brief ceremony at the PCJ Auditorium, New Kingston, on Tuesday, November 11, which was attended by Science, Technology, Energy, and Mining Minister, Hon. Phillip Paulwell.
In welcoming the arrangement, Mr. Paulwell described it as a “significant step” in the continued search for indigenous fuel resources, pointing out that “I am still of the view that we have both oil and gas (here)”.
He said Jamaica is also expected to benefit significantly from important transfer of technology and training by virtue of Tullow Oil’s investment in relation to exploratory data collection.
“We do need to develop more expertise so that when we find oil and gas, we will have people on hand to assist us, going forward. We are looking forward to the day when we will become one of those major producers and we can sit at the table to determine the price of oil,” he said.
In his remarks, PCJ Group General Manager, Winston Watson, noted that Tullow Oil is the first “proven explorer with a …solid track record” to have expressed an interest in conducting oil exploration, “since we started our drive to seek interested companies…in 2005.”
Tullow Oil Plc’s interests currently comprise over 140 exploration and production licences across 21 countries, which are managed as three regional business units: West and North Africa; South and East Africa and Europe; and South America and Asia.
“We are greatly encouraged by the strong interest shown by a company of Tullow’s caliber. The PCJ looks forward to Tullow leveraging their technical know-how and experience for oil and gas exploration in Jamaica,” Mr. Watson said.
Tullow Oil’s Business Unit Manager for South America, John McKenna, said the company opted to conduct exploration in Jamaica based on indications of possible oil and gas deposits.
“Tullow is renowned for our strategy of exploration in…frontier areas,…where we have been very successful. We have a record of opening up new oil basins, and we are hoping that our involvement, here, will actually add to that and further enhance the prospect of… oil and gas…in Jamaica,” he said.
Exploration activities will target the Walton and Morant Basin regions, which cover an area of just over 32,000 square kilometers, and will, initially, entail extensive technical surveys and data gathering.
This is aimed at determining whether there are adequate deposits of oil and gas to facilitate commercial production, which would enable drilling and extraction activities to be conducted.
Under the PSA, the Government will secure between 45 and 48 per cent of production, totalling over 50,000 barrels.
The PCJ will oversee the arrangement, on behalf of the Government, in ensuring that the provisions are fulfilled.
By Douglas McIntosh