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Jamaica to know if it will drill for oil in six months

Jamaicans will have to wait another six months to know whether there will be drilling for oil along the Walton Morant Basin, located off the island’s coast covering some 32,065 square kilometres.

Jamaica will know in approximately six months if there will be drilling for oil.

This as the two companies involvement in the prospecting for oil along the basin have agreed to a six month deferment of their decision whether to drill for oil. Tullow Jamaica and its overseas partner, United Oil and Gas PLC, have announced that the Production Sharing Agreement on the Walton Morant Basin has been amended.

The amendment is to facilitate an extension for a further six months of the initial exploration period during which a drill or drop decision is mandated by the oil exploration licence granted initially to Tullow. The initial exploration period was due to expire on January 31, 2020, at which point a commitment to drill an exploration well is mandatory based on the current exploration licence.

“We continue to be excited by the exploration potential in this super wild-cat area – not just in the Colibri prospect, but also in the follow-on opportunities that extend across the licenced acreage.”

– Chief Executive Officer of United Oil and Gas PLC, Brian Larkin

In fact this commitment is obligatory to move into the next phase of the oil exploration licence issued by the Petroleum Corporation of Jamaica to Tullow Jamaica. With the extension to the initial exploration period, the joint venture partners now have until July 31, 2020 before the drill-or-drop decision is required.

The news of the extension was shared this morning by United Oil & Gas. Tullow Jamaica, which operates the Walton Morant Basin, is an 80 per cent partner in the production sharing agreement while the remaining 20 per cent interest is held by United Oil & Gas PLC, which is a traded oil and gas exploration and development company.

Tullow Jamaica and United Oil and Gas are on the project to prospect for oil.
(Photo: tullowoil.com)

Tullow Jamaica is a wholly owned subsidiary of leading independent oil and gas exploration and production company, Tullow Oil PLC. A joint venture farm-down effort being led by Tullow (operator and 80 per cent equity holder) is now in progress, with the aim of bringing in an additional partner(s) for exploration drilling in 2021 on the Colibri prospect.

A number of interested parties are continuing their evaluations of the licence data. As a result the extension was granted to provide sufficient time for the evaluations to be completed.

The Petroleum Corporation of Jamaica issued the licence to Tullow Jamaica.

Chief Executive Officer of United Oil and Gas PLC, Brian Larkin, in a statement today points out that the extension does not require any additional work programme commitments. According to Larkin, “we are very pleased with the extension that has been granted.  We have seen additional interest in the licence towards the end of 2019, and this extension will allow those parties to fully evaluate this excellent opportunity.”

“We continue to be excited by the exploration potential in this super wild-cat area – not just in the Colibri prospect, but also in the follow-on opportunities that extend across the licenced acreage,” Larkin added. Tullow acquired the rights in the Jamaica basin back in 2014. The company has so far carried out one 2D seismic survey, and two 3-D seismic campaigns.

The Colibri Prospect

Although offshore Jamaica is a true Frontier Basin, there is compelling evidence that a working petroleum system is present. Eleven wells have been drilled to date (nine onshore, two offshore), with the most recent in 1983.

None of these appear to have tested valid structures, yet all bar one contained hydrocarbon shows. Since getting into the licence in 2014, Tullow has bought the existing 2D seismic data, shot and interpreted a further 3,650km of 2D seismic, and conducted extensive fieldwork and drop core studies.

This work has served to increase the confidence in the presence of a working petroleum system, has high-graded the preferred plays, and led to the identification of numerous structures, including the robust Colibri prospect, which is in an optimal location to test the offshore Jamaica petroleum system, and which has been further supported by the recent identification of an active thermogenically derived offshore oil seep to the south of the structure.