United Oil & Gas is not giving up on prospecting for oil in Jamaican waters despite the pull out of its joint venture partner, Tullow Oil, in March this year.
The Jamaica Observer reported that United Oil & Gas has begun talks with the Jamaican Government to determine the future of its Walton Morant offshore oil exploration licence.
“We remain committed to progressing our Jamaica asset and while the operator (Tullow Oil) has now taken the decision to withdraw from the licence, we are optimistic about its potential,” United Oil and Gas reported.
The oil and gas exploration, development and production company is the minority partner on the Walton Morant oil exploration project, which covers 32,065 square kilometres and includes 10 full blocks and part of a block in shallow waters to the south of Jamaica.
Tullow Oil, which has an 80 per cent interest in the oil exploration project, has fully written off its oil exploration licence on which it has taken a US$36-million hit, while United Oil & Gas still holds a 20 per cent interest and is proceeding ahead with the project.
United said although a joint venture farm-out process led by Tullow to seek partners to drill an exploration well generated interest, market conditions have kept those plans from advancing. The minority interest holder added that discussions with the Government have been positive in the lead up to the expiration of the initial exploration period on July 31.
United and Tullow have already mapped positive prospects for oil in Jamaica over the years and were required to commit to drilling by this July. Prior to Tullow’s exit, the joint venture partners were searching for a third drilling partner.
It is believed that United is still in search of a partner or partners in proceeding with the next phase of oil exploration, as stipulated in its exploration licence with the Government through Petroleum Corporation of Jamaica, which initially issued the oil exploration licence.
However, the collapse in world oil prices added to the novel coronavirus crisis will make the search for a partner or partners difficult. In November 2017, United Oil & Gas agreed to farm-in to the Tullow Oil-operated Walton Morant licence, offshore Jamaica, at a 20 per cent equity level.
The Walton Morant licence extends for over 32,000 square kilometres (km2), and with numerous plays and prospects already identified across three separate basins, the opportunity provides United with exciting access to high-risk / high-reward frontier exploration.
In May 2018, the acquisition of 2,250 km2 of 3D seismic data was successfully completed. This was the first ever 3D survey completed in Jamaica, and was focused on the high-grade Colibri lead.
A joint venture farm-down effort is currently underway, with the aim of bringing in an additional partner for potential exploration drilling in 2021.
Established in 2015, United Oil & Gas is in the business of oil and gas exploration as well as development and production with existing assets in Egypt, UK, Italy, and Jamaica.