Hopes that Jamaica’s oil and gas potential might follow the lead provided by those of sister Caribbean Community member countries, Guyana and Suriname, continue to be backed by the confidence which the UK-based company United Oil and Gas Plc (UOG) is demonstrating in the strong likelihood that the beneath the waters offshore the region’s foremost tourist island lie significant deposits of recoverable oil.
UOG’s recent announcement that it has just invested more than US$400,000 in its continuing hunt this year for oil in commercial quantities offshore the Caribbean island signals its determination to keep alive the dream of Jamaica becoming the Community’s fourth major oil producing country.
If the investment for this year, more than tripled over the amount spent by UOG on its ongoing probe in 2021, is a drop in the proverbial ocean compared to the multi-million dollar investments in Guyana and Suriname by big spender, ExxonMobil, the company would appear to be biding its time, backing its reviews that point to the presence of commercial reserves of oil and gas offshore Jamaica.
Were UOG’s confidence to be vindicated in a major oil find, such a development could open up the prospect of transforming the region into an energy power base the might even eventually rival the Middle East in terms of global clout.
This, however, is for the time being, very much wishful thinking since a major UOG oil find offshore Jamaica would then require the company to secure the financial backing of at least one of the heavy hitters in the oil recovery sector. UOG holds the licence to explore the Walton-Morant Block, where significant deposits of oil are believed to be located. It acquired the property from its former majority exploration partner Tullow Oil Plc, which also has an interest in the ongoing oil and gas pursuits of both Guyana and Suriname. UOG also reportedly possesses “production and development assets” in the United Kingdom, Italy and in Egypt. Whatever the outcome of what appears to be UOG’s abiding faith in Jamaica’s oil prospects, a major discovery offshore Jamaica will still leave a company with decidedly modest financial resources, with the responsibility of finding a ‘big brother’ to finance the recovery operations.
UOG has been the licence holder since August last year after the company was assigned Tullow’s 80% equity. Under the existing agreement with the Jamaican government, UOG has a deadline of January 31 next year after which it will have to make what is termed a ‘drill or drop’ decision. That decision will almost certainly depend entirely on whether or not it can secure a partner for the recovery phase.
UOG’s interest in the potential of its Jamaica property has heightened markedly since a report it commissioned from the UK-based petroleum consulting company Gaffney, Cline & Associates delivered a dramatic hike to upwards of 2.4 billion barrels “of resources that resemble oil” in the Walton-Morant area. The most promising resources were reportedly found in a micro-zone known as Colibri, triggering an initial search for partners to fund drilling in that area, according to a UOG report.
“The group has commenced a work programme to further de-risk the high-graded Colibri prospect and perform detailed interpretation of the numerous follow-on targets,” is what the UOG said in a recent report.
Prospects of the discovery of recoverable oil resources of fortune-changing proportions in the waters of three Caribbean Community states over a period of less than a decade, once thought to be beyond belief, now appear to be a likelier prospect that could trigger an unprecedented surge of international investor interest in the region.
UOG’s Jamaica assets were valued by the company at US$3.6 billion up to December last year.
