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Tullow Oil to move to 3D surveys of Jamaican blocks

Published:Monday | August 7, 2017 | 12:00 AMSteven Jackson

Oil and gas company Tullow Oil confirmed that it will conduct a 3D seismic survey off the coast of Jamaica to provide more detailed information of an area it found with live oil.

Those surveys will get under way sometime next year.

"We cannot give exact dates or costs for the 2018 3D seismic survey at this time as the work programme for next year is yet to be finalised," said David Barrett, country representative at Tullow Jamaica, in response to Gleaner Business queries.

A 3D survey would show the dimensions of the flat details found in two earlier 2D surveys. Tullow completed a 2D seismic survey in the first quarter of 2016 and another 2D survey in the first quarter of 2017, which covered 667 kilometres.

"The data in Jamaica will be used to refine the location of a potential 3D seismic survey planned for 2018," stated Tullow in its update to investors for the half year period ending June.

Tullow Oil, based in the United Kingdom, has invested over US$20 million in Jamaica on its oil explorations since 2014, Barrett said.

The company operates in 18 countries. Tullow Uruguay is one stage ahead of Jamaica in the assessment of drilling spots, having completed a 3D survey at the time Jamaica completed its 2D survey. Tullow now plans to assess the 3D data and determine where to drill for oil prospects for Uruguay.

In February, Tullow disclosed that it found 'live oil' off the coast of Jamaica in its latest search. Live oil seeps, that is, oil flowing to the surface, are positive indications of petroleum systems in the basins surveyed.

Tullow recently raised US$750 million in a fully underwritten rights issue part of its strategy to return the company to profitability. The oil and gas company made a US$519 million pretax loss on US$788 million in revenues for the six months ending June 2017. That compared to a profit of US$24 million from revenues of US$541 million a year earlier.

Tullow Oil CEO Paul McDade indicated that the company cut nearly US$1 billion in debt but going forward did not mention whether the oil exploration ventures would be affected.

"Despite continued challenging market conditions, Tullow performed well in the first half of 2017, delivering strong revenues and organic-free cash flow. Combined with the rights issue completed in April, this has allowed us to retain operational and financial flexibility and reduce our debt during the first half by around US$1 billion," said McDade.

"Since taking over as CEO, I have appointed a new and highly experienced executive team who are focused on returning Tullow to growth through financial discipline, efficient use of capital and by delivering on the potential of our diverse portfolio of low-cost production, development and exploration assets," he said.

The Petroleum Corporation of Jamaica signed a production-sharing agreement with Tullow in November 2014 for oil and gas exploration in 10 full blocks and one part block in shallow water to the south of Jamaica.

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