Raymond Wright, consultant to PCJ. - File
The government, hoping for an early break in the ongoing search for oil and natural gas in Jamaica's territorial waters, will be looking to attract more investors to the fossil fuel exploration when it launches another bid round in the first quarter of next year.
Energy and Mining Minister James Robertson is expected to make public the exact bid dates.
Three groups of foreign investors are already immersed in the search under licence from the state, with one group said to have covered enough ground to start drilling in 2011.
"In the first quarter of next year we expect that we will start the promotion activity for a formal bid round, where we will be opening these 19 open blocks to the international industry," Dr Raymond Wright, consultant to the state-owned Petroleum Corporation of Jamaica, told Wednesday Business.
The offshore area is divided into 31 blocks, 12 of which are already under licence.
Three have been awarded to to Rainsville Energy of Calgary Canada, four to the Australian Finder Exploration PLY
The Australian company and its partner in the exploration project, Gippsland, are said to be the most advanced, having collected sufficient seismic and aero-magnetic data to commence drilling.
"On the basis of the data collected, they have identified drillable prospects in water depths of between 450 and 600 metres, which may contain significant quantities of either oil and/or gas," Robertson reported to Parliament two weeks ago.
Having already missed an initial drilling timeline of 2008, the Australian joint venture has now set a new deadline of the first quarter of 2011 to start pulling up fuel.
According to the PCJ consultant, Finder/Gippsland considers that the areas that they have under licence may be more gas-prone than oil-prone and the group has completed a study on the economics of available gas in these blocks. Up to two years ago the investors were said to be hunting cash to finance the drilling phase. It is not known if they have now come up with the necessary funding.
Industry sources say interest in the remaining 19 blocks to be put o the market will be predicated on the availability of the new seismic data that was collected by Norwegian contractors, Wavefield Inseis.
The information is being analysed and processed by British geologists and should be completed by October.
Contractual arrangements
Interested parties will bid on the basis of a model contract, Wright, a geologist, said, and contractual arrangements will include production sharing - which means that the company searches for the oil and, if any is found, it is shared with PCJ, the agency of government responsible for developing the country's petroleum resources.
"Under the contracts we now have, they also pay a royalty to the government of Jamaica," he noted.
Payment is made to the PCJ after the contractors have recovered their exploration costs.
Jamaica has been searching for oil for the past half a century, with 11 wells drilled between 1955 and 1982.
Ten of these showed yields of oil and natural gas but the results were not enough to attract commercial interest.
But with major advances in exploration technologies and recent developments in the energy sector, the PCJ is convinced that explorers will be able to unearth oil or gas in commercially viable quantities.