First Look

PCJ signs agreement with Tullow Oil for oil and gas exploration

Petroleum Corporation of Jamaica | 2014-11-12 00:00:00

The Government of Jamaica, through the Petroleum Corporation of Jamaica (PCJ), has signed a Production Sharing Agreement (PSA) with Tullow Jamaica Limited, a wholly-owned subsidiary of Tullow Oil plc, for oil and gas exploration  offshore Jamaica in the Walton Basin and the Morant Basin.  Tullow has a 100% operating interest.

The PSA, which became effective on November 1, 2014, allows Tullow to begin exploratory work on ten of Jamaica’s 31 blocks and on a portion of another block. The blocks are located south of the island and cover approximately 32,065 square kilometres. 

In announcing the agreement, Minister of Science, Technology, Energy and Mining, Phillip Paulwell said the Government’s decision in 2005 to revive oil and gas exploration is now bearing fruit.

“The Ministry of Energy and the PCJ have been working hard to attract international investment for oil and gas exploration in Jamaica and our efforts are now paying off with the signing of a Production Sharing Agreement with Tullow Oil, a leading independent exploration company,” he said.

“The Government remains focused on delivering more affordable energy for Jamaica and if our oil and gas exploration programme is successful, it can be a game-changer for our country,” Minister Paulwell added.

Angus McCoss, Exploration Director, Tullow Oil, said:  “We look forward to further cooperation with the Government of Jamaica as we begin our exploration of these prospective frontier blocks. This is a long-term project and a great deal of geological and other essential work is required before any drilling can take place. Tullow prides itself on adhering to the highest technical, environmental and social standards and these considerations will be critical throughout our work in pursuit of finding oil and sharing the prosperity it can bring with the Government and people of Jamaica.”

Over the first phases of the PSA the exploration work programme includes carrying out geological and geophysical surveys, environmental assessment and seismic data acquisition, processing and interpretation to make an evaluation of the presence of hydrocarbons beneath Jamaica’s seabed. If these evaluations are favourable then the company can elect to proceed to the next phase of the agreement which will involve making a decision about drilling any exploratory wells.

The Exploration Phases of the PSA can last up to 7.5 years and if any wells contain oil and gas in quantities that allow for commercial level production, then the parties will move into the Production Phase of the Contract which can last between 17.5 and 19.5 years.

As the government entity with responsibility for contract implementation, the PCJ will oversee the entire process to ensure that the contract deliverables are achieved.  In outlining his organisation’s role in the execution of the agreement, the PCJ’s Group General Manager, Winston Watson, underscored that the PCJ will “diligently manage the implementation of the production sharing agreement.” 

The PCJ boss also cited the lengthy project timelines and noted that oil and gas exploration is “a marathon and not a sprint”.

“While we acknowledge that securing a Production Sharing Agreement with Tullow is a major milestone, we are also acutely aware that this is a long term project and there are no guarantees about the outcome,” Mr. Watson explained. 

“We are greatly encouraged by the strong interest shown by a company of Tullow’s calibre and we hope to engage other capable and committed explorers in the near future,” Mr. Watson added.


Posted By :Camille Taylor

Company Name : Petroleum Corporation of Jamaica

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Company Address : 36 Trafalgar Rd. Kingston 10

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