PCJ reviewing Tullow, United partnership on oil licence
Petroleum Corporation of Jamaica (PCJ) says it is currently reviewing the proposal for United Oil & Gas Plc to take a 20 per cent equity in the exploration licence issued to Tullow Jamaica Limited under a production, sharing agreement in 2014.
United Oil announced this week that it formed a partnership on the Jamaica project with Tullow Oil. Both companies are based in the United Kingdom.
"The agreement between the two companies is subject to review by the PCJ as the entity which manages the contract with Tullow on behalf of the Government of Jamaica. The PCJ will issue its decision once its assessments have been completed," the agency said in response to queries.
The licence gave Tullow exploration rights on more than 32,000 square kilometres of Jamaica's offshore blocks. Under the contract, Tullow has already carried out extensive 2D seismic surveys and will move to more detailed 3D surveys in 2018. The proposed partnership with United Oil would see the companies sharing the risk for the next phase of the exploration.
"Subject to the approval of the PCJ, the exploration agreement will still be carried out by the existing operator, Tullow, with United bearing a portion of the costs," PCJ said.
United Oil stated in a market notice that starting November 1, its investment will see it paying a 20 per cent share of the costs for Phase 1c of the current exploration programme. That phase will inevitably involve 3D deep mapping of the seafloor to determine where substances resembling oil are located.
United Oil also said that Jamaica falls within the company's strategy of utilising funds earned in low-risk business in Europe to finance oil explorations in Latin America and Africa.
United Oil said Tullow's Walton-Morant licence offers a "commanding" exploration opportunity with access across three geological basins. So far, 11 wells have been drilled in the area, and despite difficulties with well placements due to a lack of seismic control, 10 of these encountered hydrocarbon shows, the oil company said.
Back in August, Tullow Jamaica country representative David Barrett said the company had spent more than US$20 million since it began investing in Jamaica in 2014.