Six-month deferment of decision to drill for oil in Jamaica


Six-month deferment of decision to drill for oil in Jamaica

Drilling decision must now be made by July 31 this year

Observer business writer

Wednesday, January 15, 2020

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The two companies, involved in prospecting for oil in Jamaica, along the Walton Morant Basin, have agreed to a six-month deferment of their decision about whether to drill for the precious commodity in Jamaica.

The move comes as Tullow Jamaica and its overseas partner, United Oil and Gas PLC, have announced that the Production Sharing Agreement on the Walton Morant Basin has been amended. The amendment is to extend for a further six months the initial exploration period, during which a drill or drop decision is required.

The initial exploration period was due to expire on January 31, 2020, at which point a commitment to drill an exploration well would have been required to move into the next phase of the oil exploration licence issued by the Petroleum Corporation of Jamaica to Tullow Jamaica. With the extension to the initial exploration period, the joint venture partners now have until July 31, 2020, before the drill-or-drop decision is required.

Tullow Jamaica, which operates the Walton Morant Basin, is an 80% partner in the production sharing agreement while the remaining 20% interest is held by United Oil & Gas PLC, which is a traded oil and gas exploration and development company. Tullow Jamaica is a wholly owned subsidiary of leading independent oil and gas exploration and production company, Tullow Oil PLC.

A joint venture farm-down effort being led by Tullow (operator and 80% equity holder) is now in progress, with the aim of bringing in an additional partner(s) for exploration drilling in 2021 on the Colibri prospect. A number of interested parties are continuing their evaluations of the licence data.

As a result, the extension was granted to provide sufficient time for the evaluations to be completed. Chief executive officer of United Oil and Gas PLC, Brian Larkin in a statement yesterday pointed out that the extension does not require any additional work programme commitments.

According to Larkin, “we are very pleased with the extension that has been granted. We have seen additional interest in the licence towards the end of 2019, and this extension will allow those parties to fully evaluate this excellent opportunity.”

“We continue to be excited by the exploration potential in this super wild-cat area — not just in the Colibri prospect, but also in the follow-on opportunities that extend across the licenced acreage,” Larkin added.

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