International oil and gas explorers are, once again, back in Jamaican waters, venturing on a data-collection exercise. The explorers now have the support of the National Environment and Planning Agency (NEPA) and local fishing community.
This is the first exploration company in the past 10 years to re-energize the search for oil off the Jamaican shore. The United Kingdom-based company leading the efforts, Tullow Oil, has brought the gamut of data-capturing equipment for the second phase of its venture.
Phillip Paulwell, minister of science, technology, energy and mining, recently took a tour of the vessel, BGP Challenger, yesterday at the Kingston Port. During the tour, Paulwell spoke on the importance of this exploration, stating that “this is a major deal for Jamaica’s oil-and-gas exploration.”
Paulwell was also accompanied by State Minister Julian Robinson, who added: “For them to start this work, they had to get approval from NEPA, and they have signed an important agreement with our fisherfolk in the event of any matter for full compensation.”
Oil and gas exploration in the area began in the 1980s; at the time, only the Government of Jamaica was responsible for the funding of the project. According to Paulwell, the new exploration project has gained momentum with the private sector now coming on board with Tullow Oil signing an agreement.
Back in November 2014, the Petroleum Corporation of Jamaica (PCJ) signed a production-sharing agreement with Tullow Oil for oil and gas exploration in Jamaica’s offshore areas. Paulwell told The Gleaner that $70 million was committed to the project.
“They have so far spent US$10 million, and this exercise will cost them another US$4 million to acquire additional data,” stated Paulwell. “Although we are convinced that we have oil and gas in and around Jamaica, we really have to pinpoint the location before drilling can take place.”
Despite the large drop in the price of oil, the firm has still demonstrated a firm commitment to the project. The agreement was signed 15 months ago when the price of oil was well over $100 a barrel. “Today, it is about US$30, but they are still committed, and not only them, since we signed the agreement, others have approached PCJ.”
Paulwell added that they are still in negotiation to bring on another major firm as well. There has been a high level of confidence in what they have done so far, leading to interest from other organizations. This level of interest, despite the current price of oil, shows the confidence that the industry still has moving forward.
To read more about this story, check out this article from The Jamaica Gleaner.
About The Author
Anatoly Vanetik is a Venture Capitalist, Oil and Gas Expert, and Businessman in Orange County, California. He is the President and Chairman of the Board of Directors at Vanetik and Associates, a popular venture and consulting firm in the resource industry that Anatoly began. He brings many years of professional experience in the engineering and energy industries. Outside of his career, Anatoly Vanetik is passionate about animal welfare and art history, and maintains monthly blogs about each one.