Sarges yet to commit to Jamaican oil drilling

Must do so by March 2011

Friday, September 03, 2010

Sagres doesn't have to drill for oil offshore Jamaica by next March but only has to commit to the next phase of exploration by the deadline date, the firm's president, David Johnson, clarified.

At the same time, officials at the Petroleum Corporation of Jamaica (PCJ) are confident that the small oil outfit will find a financial backer to move forward.

"Sagres has until next March to elect to enter the into second phase of exploration on one or more of its three blocks," Johnson told Caribbean Business Report. "This second phase of exploration carries a commitment to drill a minimum of one exploration per block."

Special projects manager of the Petroleum Corporation of Jamaica (PCJ), Dr Raymond Wright, who on Wednesday confirmed that the seismic structure indentified by the company in Jamaican waters was very significant and "could contain up to 3 billion barrels of crude oil", said in a JIS News interview that the firm was "now seeking a partner and they are very active. I am sure they will be successful".

Wright, explained that Rainville Energy — the subsidiary of Sagres Energy with three exploration blocks offshore Jamaica — was a small oil exploration outfit and could not itself drill a well.

"Wells cost a lot and depending on the depth of the water, it could cost up to US$40 million to drill a well," he noted.

He added that an equity partner would therefore be needed to either drill, operate or provide the capital to drill and operate, while sharing the economic rent that accrue from the venture.

Should oil be found, Sagres and its equity partners would recover its exploration cost and the oil and/or gas is shared among the investors and the Government, but neither the PCJ nor the Government will make any investment.

A discovery would also significantly boost Jamaica's balance or payments as the country imports over 90 per cent of its energy needs with an oil import bill projected to reach nearly US$2.5 billion in 2010.

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COMMENTS (13)

tina chambers
9/5/2010

@Carlos Bryson...i can see you r interested let us start a twitter page to help the GOJ ..TO INVEST ...i have seen what investing in oil can do.... let us lobby the Jamaican government to sell shares to the Jamaican people to invest in the drilling of our oil.....

tina chambers
9/5/2010

why can't the Jamaican people be apart of the investment...i have money to invest in the drilling ...and i am sure other Jamaicans both here and abroad will invest ...the GOJ need to start selling stocks......someone please start a twitter page ....why can't ordinary Jamaicans be millionairs......once we have oil off the shores of Jamaica we need to invest

Anthony Everton
9/4/2010

I am quite skeptical about the amount of oil found and the costs to get it to production. I have to keep following up on these developments and see how eveything will pan out.
But still for Jamaica's sake I hope everything will work out positively and we get much needed revenues.

9/3/2010

So the sayings might be true indeed! "Jamaica is a little island with everything on it"; "God placed his thumbprint on that one", "Wi likkle but wi tallawha!"
Carlos Bryson, I think you might be on to something. Why can't the people of the Jamaica be shareholders here, buy in, and invest?
I am more than willing to put US$100 into this ASAP. I am poor right now, (by American standards) but willing to invest even more. I do not think I am alone - but the residents there come first.

Nejeeper KNG
9/3/2010

“Bauxite was first produced commercially in Jamaica in 1952 by Reynolds Metals Ltd. In only six years, Jamaica became the largest producer of bauxite in the world”. How much do we have to show for it? This is a country that has been traumatized by misrepresentation and squandering of our resources. This possibility can take us into a developed world status if undertake properly. Our country is blessed; our CURSE is the gov that shortchange and misrepresent us. We could have been much further.

Carlos Bryson
9/3/2010

With US$185M toward this venture, I can see us emplying the best personnel money can buy to represent our investment and change to spare for other worthwhile efforts.

Carlos Bryson
9/3/2010

Dr. Wright is a geologist and a Jamaican and he's the one representing the govt in all this. So, hopefully, we are in good hands. On the other hand, why not us Jamaicans be the equity partner? Couldn't we each come up with US$100 by March of next year? We dont need the govt. to sanction our effort. We set up like any other corporation and file the appropriate documents, the right structure and the right personnel in place.

the realest no fakeness
9/3/2010

I know that oil deh a JAmaica long time. I hope Jamaicans will benefit from this first and foremost, and i agree with person who said Jamaicans need to be at forefront of this thing, not a bunch of foreigners who will want to leech, exploit and steal, cause this is one thing if come to fruition jamaica should unite and fight with blood sweat and tears over...even if they have to murder 2.6 million people. Its ours we should not give it away.

Owen Clarke
9/3/2010

I really hope a partner can be found for this venture. It would do Jamaica a world of good if handled right and professionally.

A Sil
9/3/2010

I am sure that most Jamaican wouldn't object to the acquisition of a loan to speculate on this so that the maximum benefits will accrue to Jamaica. It's ironic that they can find taxpayer's money to waste on projects like the Palisadoes highway. If they are going to use our money, at least do it on something that gives us hope. Don't we have good enough geologists who can advise on this. Pay them, instead of paying "consultants" to do what regular govt. employees can do and are paid to do.

Carlos Bryson
9/3/2010

To follow up, I know many are cynical. I am too, considering the many tales of dis-honesty amongst each other and even surrounding both governing parties; but, with the right structure of accountability and transparency let's take a dive. What's our exposure $100? What's the benefit? National pride? Seriousness in building our nation?
Messrs Christie and Adams among others could be part of the oversight team.

Brad Kerr
9/3/2010

Blessed little rock.. This has to be great news if it pans out. We may be see an increase in our GDP as energy cost would go down and production would go up. Greant news all around if this comes to fruition......

Carlos Bryson
9/3/2010

What if the government reaches out to the Jamaican nation of 3.7 million people and ask for the equivalent of US$100? Apply a negative factor of 50 percent for those who simply cannot participate or just not interested; the yield would be around US$185M. Is this something we Jamaicans need to fight for? Nobody cared to seek our participation in anything else (bauxite, sugar, tourism) and we complain about selling out the nation. Just a thought.

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Sarges yet to commit to Jamaican oil drilling