Thu | Jun 21, 2018

Fishermen save oil survey, says Tullow

Published:Sunday | February 26, 2017 | 12:00 AMSteven Jackson
Tullow Oil's principal geoscientist Madeleine Slatford and exploration manager Jerome Kelly for South America and the Caribbean, speak in an interview on Friday, February 24, 2017.
John McKenna, Tullow Oil's Regional and Business Development Manager for South America and Caribbean.

Tullow Oil surveyed far and wide offshore Jamaica, utilising modern oil-sensing equipment, but largely to no avail until fisherfolk led the company to an oil sheen near the Pedro Banks.

Jerome Kelly, Tullow's exploration manager for the Caribbean, admitted in a Gleaner Business interview on Friday that if it were not for the fishers, the oil explorer might have considered halting its exploration in Jamaica.

"At the time, fishermen - whom we engage with closely when we are doing our offshore activities - said that there were some reports of slicks of oil in the area off 'Blower Rock' area at the eastern end of the Pedro Banks," said Kelly, who was interviewed alongside Tullow managers, among them principal geoscientist Madeleine Slatford; David Newton, the safety, sustainability and external affairs managers; and John McKenna, regional and development manager for South America and the Caribbean.

Usually, such tips show evidence of refined or ship pollutants. But not that time, he said.

"In this case, the sample seemed like natural crude oil," recalled Kelly, adding that the team returned last summer and retested the area, which confirmed the findings.

In early 2015 and 2016, the Tullow team concentrated their surveying in other locations, accumulating over 3,000km of data, which largely came up without oil evidence.

The team, building on the lead of the fishermen, now wants to conduct surveys covering an additional 670 kilometres of 2D data under their exploration licence with the Jamaican Government.

"The survey will start in March, and the median length would see it last five to 10 days," Kelly said about the survey, which will examine Blower Rock at Pedro Banks northwards to Kingston city.

"The live oil was of a tiny amount, so it doesn't say how much is underground, nor does it say where that oil has come from, and that is why we are doing the survey."

Kelly explained that in early 2016, the team chose to survey other areas because previous companies conducted unsuccessful oil surveys in parts of the Pedro Banks areas during the 1990s and early 2000s.

The findings are expected for release in May. If the results are positive, it would result in the company conducting a 3D survey. If those results are positive, the company could begin drilling as early as 2019-2020, said Kelly.

Gleaner Business asked whether it was first time oil was found offshore.

"Well, the fishermen would say that they always knew about it for years, but you've just never asked us," responded Kelly.




Slatford added that it was the first time oil was positively tested offshore Jamaica.

"Nine times out of 10, it's pollution, or whatever, but this is one case in which it turned out to be genuine," Kelly said.

He added that explorations could have ceased if this lead from the fisherfolk failed to materialise.

"It is possible we could have stopped. Remember, we are exploring in 18 countries," he said.

The Tullow Oil regional heads are in Jamaica now to sensitise private and public stakeholders on plans to start a 2D seismic survey next month, aimed at identifying the source of oil found off the coast of Pedro Banks.

Tullow described their preliminary find last year as the first 'live' or flowing oil in or off the coast of Jamaica. Oil previously found came from well basins that were dried up or 'dead', said Kelly.

"It's significant enough because although oil has been identified in the wells on the island of Jamaica in the '70s and '80s, no one ever reported oil offshore," Kelly said. "In Jamaica, there was evidence of dead oil in the rocks on the island and old wells back then. The live oil means that oil is being generated offshore and means that it is currently moving through the rocks underground as we speak, rather than happening millions of years ago."

Tullow, which is based in the United Kingdom, posted a US$600 million net loss on US$1.3 billion of revenue for year ending December 2016, due to write-offs and impairments. The company, which operates in 18 countries, holds net debt of US$4.8 billion and free cash flow of US$1 billion.

In November 2014, the Petroleum Corporation of Jamaica signed a production-sharing agreement with Tullow for oil and gas exploration in Jamaica's offshore areas. It includes 10 full blocks and one part block in shallow water to the south of the island.

In 2015, Tullow completed a bathymetry survey over the 32,056 square km Walton Morant Blocks. Also, it completed a 2D seismic survey in the first quarter of 2016 to delineate potential plays in shallow water.

Tullow previously reported that there have been oil or gas shows in 10 of the 11 onshore and offshore wells drilled in Jamaica.

The offshore area to the south of the island has been identified as having good frontier exploration potential, encompassing three geological provinces: the Pedro Bank carbonate platform and the Walton and 'Southern' sub-basins, which offer tertiary-aged clastic and carbonate reservoir targets in both structural and stratigraphic settings. Multiple leads have been identified on existing seismic data which lie in 25m to 2,000m depths.

Canadian company Sagres Energy, which previously held the rights in 2010, exited Jamaica in 2012 as it was unable to find a drilling partner.