JAMAICA is again seeking investors for its oil and gas exploration and has planned a second round of roadshows overseas to market the country's oil and gas exploration potential in January.

PAULWELL. in the new year we head to Houston, Texas and London, England

"In the new year we head to Houston, Texas and London, England, and we're hoping to get persons in the industry to have a look at us," Phillip Paulwell, the minister with responsibility for energy, told the Sunday Observer last week.
This will be the second overseas marketing initiative of the Government, and will be conducted under the auspices of the state-owned energy company, the Petroleum Corporation of Jamaica (PCJ). In this round, the PCJ hopes to sell exploration licenses for the remaining 13 of 20 oil exploration blocks that make up Jamaica's prospectable area.

At these 'roadshows', investors are introduced to information about Jamaica's oil and gas potential, and have the option of furthering their research by purchasing data packs that contain almost a century's worth of information about the island's onshore and offshore geology collected by the PCJ.
"These shows actually pay for themselves," Paulwell was quick to point out, noting that the income from the sale of the US$50,000 packets would offset the cost of putting on the events.

The first set of roadshows, done in 2004 and also held in Houston and London, resulted in eight companies buying Jamaica's data packet. Three of those participated in the bidding round for exploration blocks, and two - Finder Exploration PTY of Australia and Rainville Limited of Canada - eventually acquired licences to explore seven of the island's 20 blocks.

Under the terms of those exploration agreements, the private companies are required to foot the entire exploration bill, post a security bond, make a deposit to a Stability Fund and contribute US$100,000 to Jamaica's Petroleum Training and Education Fund (PetroFund).

If fossil fuel deposits are discovered, the oil companies responsible for extracting those resources are required to pay a 12.5 per cent royalty in cash or product to the Jamaican Government before they begin to sell cost petroleum, in order to recover their investment. Once the companies have recovered their costs, any profit oil is to be split with the PCJ, according to a scale that considers issues such as water depth and yield amounts.

Since 2004, the Government has earned J$22 million from its oil and gas exploration.

Finder, which initially was awarded blocks 7, 10, 11 and 12, in February this year, contracted Furgo, a Dutch seismic survey company, to collect close to 8,000 km of 2D line data from the blocks, which lie offshore of Jamaica's south coast. Finder later formed a joint venture partnership with Australian minerals and energy company Gippsland, and in June, Finder/Gippsland began an aerial magnetic and gravity survey using BHP Billiton's FALCON technology. Sander Geophysics of Canada conducted that survey.

At the same time, the joint venture requested and won a licence for block 6, to extend its survey area over the Walton Basin, an area thought to be potentially resourceful based on its proximity to the Nicaraguan Rise.

That company is now in the process of analysing the data collected to identify potential submarine hydrocarbon-bearing structures, with a view to eventually drilling test wells as early as 2008.

Rainville, which has been allocated blocks 9, 13 and 14, has yet to begin its initial marine seismic, gravity and magnetic surveys. But the firm, according to PCJ oil and gas exploration consultant Dr Raymond Wright, is planning to begin its research soon.

"In fact, this week, representatives from Rainville will be coming to Jamaica to meet with fishing interests about the possible impact or interference the seismic survey may have," revealed Wright, who is also a former head of the PCJ.

This foray into oil and gas exploration is Jamaica's third major attempt to find a domestic fossil fuel source, and was precipitated by the price and security of supply volatility that has reigned in international oil markets since the September 11, 2001 terrorist attacks on the United States.

Since then, the price of oil on the world market has skyrocketed from less than US$40 per barrel to highs of almost US$80 per barrel, causing major shocks to economies of small states like Jamaica, which depend almost entirely on imported oil. In 2005, Jamaica spent US$1.3 billion on imported oil, an increase of six per cent over the amount spent in 2004.

This year, it is expected that the nation's oil bill will top US$1.6 billion, as oil prices, despite significant reductions from this summer's high of more than US$78, have been trading in the US$57-US$61 range over the past month.

campbello@jamaicaobserver.com

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