Dr Raymond Wright, consultant to PCJ. - File
Dr Raymond Wright, consultant at the Petro-leum Corporation of Jamaica (PCJ), believes confidence and optimism is returning to the global energy industry, and that Jamaica's new oil exploration bid round on 19 offshore blocks in open acreage is well timed for next March in London.
"By the time the bids close, which will probably be in January 2011, ten months or so later, oil prices would have gradually risen," said Wright.
"We expect it to rise to approximately US$90 a barrel, therefore, there is a great deal of interest in the industry going into looking for new oil, including frontier provinces, such as Jamaica which are not yet oil producers," he told The Financial Gleaner this week on the sidelines of an energy conference in Port of Spain, Trinidad.
Renewed interest
Wright, who has been in the energy industry spanning over three decades, said there is renewed interest in the frontier areas, particularly if it does not involve a lot of the costly deep water drilling.
The formal bid round will kick off in early March, with a presentation in London, during the American Association of Petroleum Geologists (AAPG)/Prospect and Property Expo (APPEX London 2010) conference, March 2-4.
A presentation will also be made to the industry in the lecture hall of the Geological Society of London.
A second road show will be held in Houston, Texas in late April.
The PCJ will also be exhibiting in the International Pavillion at an AAPG meeting in New Orleans, also in April.
"I can't make a prediction but I am hopeful we will have a few bids because of the acreage we showed with the new seismic data," said Wright.
"The data quality is high. There are industry structures that we have never seen before, so to speak, so that a number of plays will be developed based on this new seismic data which we believe will be attractive to the industry."
Over 8,700 line kilometres of 2D seismic data was collected earlier this year by Norwegian contractor Wavefield, now taken over by CGG Veritas.
It involved 6,118 line kms covering various open offshore blocks and 2,594 line kms on three shallow water blocks - 9, 13 and 14 - licensed to Rainville of Canada.
Bid documents will be prepared on the basis of production sharing arrangements, which are the preferred industry option.
While royalty is not a requirement, it can be a negotiable number.
If preferred, it should be 12.5 per cent or less, the PCJ consultant told delegates attending the annual IBC Energy Caribbean conference in the Trinidadian capital.
Wright described offshore Jamaica as underdeveloped with little exploration activity in the last 24 years.
New seismic data acquired in 2006 and 2009 reflect hydrocarbon with onshore and offshore seeps, that is, fissures or fractures in rocks that allow gas to escape to the surface.
A number of large drillable prospects have already been identified, he said.
A total
Rainville has three, while the Finder/Gippsland joint venture of Australia has exploration licences for five - blocks 6, 7, 10, 11 and 12 - while Hong Kong-based Proteam has four - blocks 1, 5, 8, and 17.
Jamaica is keen to find commercial oil or gas as it faces a high energy bill annually, about US$2 billion, from having to import 90 per cent of energy supplies, mainly oil.
The remaining 10 per cent comes from coal and renewables, such as wind, hydro, biomass and solar.
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