Wed | Jan 27, 2021

Brian Richardson | Transparency in Jamaica’s oil and gas exploration

Published:Sunday | May 19, 2019 | 12:00 AM
Brian Richardson

It is important to answer, clarify and refute claims made in the article entitled ‘Tullow and Jamaica – Why the Silence Over the Big Oil and Gas Find?’ which was published in The Sunday Gleaner on May 12, 2019.

  The writer implied that there had been a major oil and gas find offshore Jamaica, which the Government of Jamaica (GOJ) and the Petroleum Corporation of Jamaica (PCJ) had failed to bring to the attention of the public. The claim referenced the geological data which was acquired as a result of a 3D seismic survey which was completed in May 2018.

  First, there has been no discovery of oil or gas, be it onshore or offshore Jamaica.

  Secondly, the 3D survey cited by the writer is not a scientific basis for such a claim. A 3D survey is used as a means of measuring rock properties and providing detailed images of various rock sequences to identify potentially high grade areas for possible future drilling. Proving an oil or gas discovery can only be done with the drilling of an exploration well.

  The 3D survey in Jamaica’s off-shore – our first ever – was carried out by Tullow Oil PLC, under a 2014 Production Sharing Agreement (PSA) between that company and the PCJ. In November 2017, United Oil and Gas (UOG) farmed in on a 20 per cent stake in the exploration licence, which is a normal occurrence for exploration in unproven areas to spread associated risk.


  In 2019, UOG stated that “229 million stock tank barrels of gross unrisked prospective resources have been identified by a Competent Persons Report (CPR)”.

  How did UOG reach this number? After the initial processing of a 3D survey, geological leads and potential reservoirs may be identified and mapped using specialized software. An expert can give their best estimate of what oil might be present, hence the figure of 229 million barrels of oil.

  However, because a well has not been drilled, and there are no wells in production across Jamaica’s exploration blocks, the factors involved in this estimate will have a wide range of uncertainty and hence will still be very risky.

  The UOG article made it clear that any well that is drilled has a chance of success of only 20 per cent. The PCJ has been working with Tullow to see how much we can lift this geological chance of success, as it is one of the major indicators of potential project success.


  In the 1970s and 1980s, multinational companies drilled 11 oil and gas exploration wells onshore and offshore Jamaica. The article stated that oil and gas was found in 10 of these wells, but if this were correct, Jamaica would currently have a flourishing oil and gas upstream industry. The PCJ can confirm that 10 of the wells drilled had oil and gas “shows”, which means that only trace amounts of hydrocarbons were encountered.


  The United States Energy Information Administration (EIA) lists countries based on their amount of proven reserves, which are quantified after successful drilling and mapping of subsurface structures. Based on the EIA, Venezuela ranks number one and, yes, Trinidad ranks at number 53; however, Jamaica is not included in these rankings because, at this point, we are still at the prospective resource level, with no exploration well drilled.


  The Polarcus Adira was the ship used to carry out the 3D Seismic Survey in the Walton-Morant Basin in April and May of 2018. The fact that the survey went according to plan and finished ahead of time was not due to good results (as these cannot be interpreted so quickly), but as a result of significant pre-planning, favourable weather conditions, state-of-the-art equipment and seasoned professionals onboard the Polarcus vessel, as well as strong local stakeholder engagement, particularly with the fishing community and local support vessels that worked diligently and tirelessly.

  Rigorous processing of this newly acquired data began in June 2018 and was completed in April 2019. The processing of the data has fine-tuned the imaging of the rock properties and sequences offshore Jamaica, with state-of-the-art technology outlining leads (potential areas of interest). The final data product became available in May 2019 and the PCJ, Tullow and UOG are currently evaluating that data. We expect this work to conclude by the end of the third quarter of 2019.


  In 2018, the PCJ and CGG GeoConsulting performed an islandwide geological mapping of Jamaica. During this mapping exercise, two live oil seeps (the first ever) were identified onshore and tested via a third party to understand the type of hydrocarbons present. A third seep, known as the Windsor Gas Seep, has been flowing for 100 years and has maintained its chemical composition but due to the limited amounts, at this stage it is uneconomical to develop. These seeps are not of any commercial significance but are of scientific importance in understanding Jamaica’s oil and gas potential.


  Although quite complex in detail, the PSA involves an exploration phase and a production phase that, under the Petroleum Act, cannot exceed 25 years in the first instance, with the potential for renewal for up to another 25 years, if agreed. The exploration phase can last anywhere between six and eight years, with the production phase being the remainder of the 25 years. The potential total government take will range between 50 and 60 per cent in favour of Jamaica if there is a commercial and producible accumulation of hydrocarbons.

  If we do discover oil, then, as is customary in the oil and gas industry, each barrel of oil is shared between the explorer and the host government. Jamaica will earn first through royalties, the scale of which will depend on the depth of the water, and then the explorer will be allowed to recover their costs (called cost recovery); the remainder is split between the explorer and the PCJ.


  The involvement of Jamaican investors in the oil and gas exploration programme is primarily a financial matter. Exploration requires firms to invest sums that can range over US$100 million, with a probability of zero return. Not many local firms can gamble hard currency like that.

  In conclusion, and for the avoidance of doubt, Jamaica has not yet discovered oil. Oil and gas exploration is a science and data driven business and while as patriotic Jamaicans, we at the PCJ are cautiously optimistic and even hopeful; science must have the final word.

  This journey can either firmly place Jamaica on the oil map or take us off and we would much prefer the former. As such, the PCJ is open to suggestions, queries, recommendations and questions on this oil search journey, as transparency is in the country’s best interest.

  Above all, we will continue to work steadfastly and wisely for Jamaica – the land we love.

- Brian Richardson is the acting group general manager, Petroleum Corporation of Jamaica. Email feedback to