Petroleum Corporation (PCJ) of Jamaica Caribbean treasure trove
www.pcj.com
Caribbean treasure tr
The Petroleum Corporation of Jamaica (PCJ) exists this idyllic island nation self sufficient in energy: to it is engaging other oil producing governments and exploration companies to develop the oilfields that
written by: John O’Hanlon research by: David Brogan
Petroleum Corporation of Jamaica (PCJ)
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Petroleum Corporation of Jamaica (PCJ)
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amaica is not lacking in natural contracts, explore for oil and develop Jamaica’s resources – for example it is a petroleum resources in the national interest. major exporter of bauxite, the raw In 1995 PCJ’s remit was extended to develop material for aluminium – but it indigenous renewable energy resources. It is not currently known as an oil has established a large biodiesel project with producer. In fact it has to import its oil at a the aim of eventually producing 16.5 million rate estimated at 80,000 barrels a day if oil gallons of biodiesel from crops that grow well on based products like asphalt, are included. Oil nonproductive or marginal land. It also built a to fuel cars boats and aircraft is imported from wind farm at Wigton near Manchester, Jamaica Mexico, Venezuela and other neighbouring in 2004. This facility saved the country $5.3 Caribbean countries. million in 2011/12, proving that renewables Should oil be found in significant quantities could be an important contributor to cutting in Jamaican waters – something that appears oil imports, and more wind capacity is planned almost certainly just a matter from both PCJ’s facility and of time – there could hardly private generation companies investing into the market. be a more attractive location However the holy grail for in the world – the Caribbean is eminently accessible to the PCJ lies offshore in the North American markets and exploration blocks lying to international trade routes; the the south of the island and government is encouraging, selling this potential to the Gross oil-based imports keen to negotiate terms that world’s exploration majors is to Jamaica are attractive to international the work of Brian Richardson, oil & gas exploration and PCJ’s Oil & Gas Exploration production companies; the legal system is Manager. Though a good deal of due diligence democratic and founded on British law; and needs to be done, a large amount of money of course Jamaica is English-speaking. Add to spent on drilling and further geophysical that the fact that it controls a major potential and geological survey work in the waters hydrocarbon reserve that has seen very little surrounding the island. The work done in exploration over the last quarter-century and the 1970s indicated that there were reserves it begins to look like the next big thing. of hydrocarbons, he says, but early surveying The Petroleum Corporation of Jamaica just scratched the surface. It did however was set up in 1975 to find ways of reducing produce some very encouraging results: of Jamaica’s dependence on imported energy. It eleven exploratory holes that were drilled is a statutory corporation mandated to take onshore and offshore only one failed to show part in every stage of hydrocarbon trade, from hydrocarbons present. “In the last five years exploration to retail. Specifically the government or so that work has been updated to refine gave it the exclusive right to manage import our knowledge of where these reserves lie. In
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Petroleum Corporation of Jamaica (PCJ)
particular, work has been done in the south- production sharing contracts (PSCs), east section of the Jamaica oilfield which government instruments that allow an oil indicated that there are huge sedimentary company to prospect, subsequent profits being structures in that sector.” shared between Jamaica and the company. A preliminary bid round in 2004 resulted Richardson is on a mission to market this in two junior exploration companies coming untapped reserve. Last November PCJ’s Oil on board, whose involvement effectively & Gas department was at PETEX in London: cut the perceived risk facing investors to in February 2013 it was the turn of North an acceptable level. “We are now confident American Prospect Expo (NAPE), held twice that over the next two to yearly at Houston, and in three years we will be able March the focus will shift to convince one of the majors back to London where the to take an interest in Jamaica APPEX conference is taking and commit to a drilling place. “The take away is that there is increasing interest programme.” The first step in Jamaica’s offshore, and is to dispose of the rights in 12 months we expect to licences on the available Size of the Joint see that interest translating blocks in and around Regime Area into activity on the ground.” the Walton, concluding
52,000 km2
Once people understand the structure, then interest will accelerate, he believes. His department’s aggressive marketing strategy includes reigniting old leads that have gone dead because the picture has changed rapidly. Recently he has taken calls from 25 organisations or companies that had been unaware of the opportunity. “I have hanging in my office a picture of a rig that was installed offshore in 1984 – I am committed to seeing a new rig out there three to five years from now!” If you look at Jamaica on the map, it is surrounded by successful oil economies. Nicaragua, Venezuela, Colombia and Honduras are cases in point. Jamaica buys energy at preferential rates under various local agreements, and a Joint Regime Area between Jamaica and Colombia, situated south of the Pedro Bank was established in 1993. In 2008, an agreement was signed between the two countries for the conduct of surveys relating to the hydrocarbon potential of the 52,000 square kilometre area. PCJ is actively looking to establish government-to-government level agreements with those neighbours with which it shares the Caribbean Basin. “We want to build on their strengths and also provide our data into the melting plot to understand the Caribbean
basin hydrocarbon scene. Every piece we can place in the Caribbean jigsaw puzzle helps to reveal the whole picture!” It is also benchmarking a country that has highly relevant experience though it doesn’t share the same waters. Uruguay, like Jamaica had a 20-year hiatus in its exploration programme and followed a similar marketing trajectory in 2008 before hitting success in awarding exploration
“Work has been done in the south-east section of the Jamaica oilfield which indicated that there are huge sedimentary structures in that sector”
Petroleum Corporation of Jamaica (PCJ)
blocks. The Uruguayan government recently signed offshore exploration and production deals with British oil firms BG Group and BP, Ireland’s Tullow Oil and France’s Total. The companies concluded 30-year concession contracts in April last year for eight oil blocks - three each for BG and BP and one each for Tullow and Total. Between them they have committed to investing a total of roughly $1.56 billion. “The Uruguayans are helping us a lot with their geophysical and geological knowledge and theirs is a scenario that we would dearly like to emulate here!” Any oil company wanting a head start in a relatively unexploited region that nevertheless is within easy reach of the infrastructure and skills the industry needs, not to mention the prime global markets of the Americas, would
be well advised to take an early position in Jamaica. Brian Richardson points out that indicated oil reserves range between 500 million and a billion barrels, with anywhere between two and four trillion cubic feet of gas. More detailed geological and geophysical work will be carried out over the coming twelve months, followed by drilling a couple of years down the line. At the end of this process lies a commercial bonanza for the oil companies, and the realisation of PCJ’s raison d’etre – to make Jamaica an oil exporter rather than an importer. For more information about Petroleum Corporation of Jamaica (PCJ) visit: www.pcj.com
Petroleum Corporation of Jamaica (PCJ) www.pcj.com
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