My Thoughts on Technology and Jamaica: Tullow Oil's Walton and Morant Basins Bathymetric Survey – Why @TullowOilplc still interested in Jamaican Oil Exploration

Thursday, July 23, 2015

Tullow Oil's Walton and Morant Basins Bathymetric Survey – Why @TullowOilplc still interested in Jamaican Oil Exploration

There is Oil in Jamaica and the search for the precious hydrocarbon has not ceased since November 2014 as noted in my blog article entitled “@TullowOilplc gets License for Offshore Oil Exploration - 3 Billion Barrels of Oil for Jamaica to re-discover as Price set to Boom by 2017”.

Tullow Oil, a Dublin, Ireland based company with offices in the UK, has completed a underwater survey of 32,000 square kilometer of the Walton and Morant basins in July 2015 as reported in the article “Tullow Oil Commences Drop Core Survey Off Coast Of Jamaica”, published Sunday July 5, 2015 by Camilo Thame, The Jamaica Gleaner.

Tullow Oil, currently has a twenty five (25) year Oil Exploration license in partnership with the GOJ (Government of Jamaica). They’re also currently in Suriname doing offshore exploration for Oil while being a great corporate citizen as show in the video below.

The underwater survey or bathymetry, which was conducted with a submersible vehicle aka mini-submarine, was done in order to determine points on the seabed where the seabed was not too thick. This so that they could drill core samples to do chemical assays to determine the hydrocarbon content lying beneath the ocean floor.

Tullow Oil and Walton and Morant basins – Only the beginning of Exploration

The 32,000 square kilometer of the Walton and Morant basins is a very interesting part of Jamaica for Oil Exploration!

This area is part of the ten (10) of the thirty one (31) blocks which have been marked for Oil and Gas Exploration by the PCJ (Petroleum Corporation of Jamaica).

Specifically, Tullow Oil is allowed to explore blocks 6, 7, 9, 10, 11, 12, 17, 25, 26, 27 and a portion of Block 1.

The deal struck between the PCJ and Tullow Oil, which they refer to as a PSA (Production Sharing Agreement), calls for Tullow Oil to invest some US$60 million in the exploration phase as reported in the article “Tullow Jamaica To Sink US$60m Into Oil Exploration”, published Wednesday November 12, 2014, The Jamaica Gleaner.

If they find Oil, Jamaica will get 48% of any production over 50,000 barrels of Oil per day, plus royalties. Not a bad deal, as more Oil means more Production Profits plus royalties, a far better deal than we had with Bauxite mining companies.

So does this mean they'll start drilling for Oil? Not so fast, as they've only just restarted.

Minister Paulwell visit Tullow Oil - Jamaica worried that Low Oil prices made Oil Exploration pointless

Oil Exploration takes quite awhile folks.

Oftentimes, many forget how long it takes to find Oil and the amount of survey data that Oil exploration companies has to wade through before you can even start drilling test wells! Take a look at watch the video “Finding The Prize: A story of Oil exploration and discovery” on Tullow Oil PLC’s YouTube Page!

During the period Monday May 18th 2015 to Friday May 22nd 2015, Minister of Science, Technology, Energy and Mining Phillip Paulwell made a visit to Tullow Oil at their London and Dublin Offices as reported in the article “Its on — Tullow Oil reaffirms Oil exploration in Jamaica”, published Friday, May 29, 2015, The Jamaica Observer.

Minister Pauwell was accompanied by a delegation that included Petroleum Corporation of Jamaica’s (PCJ) Chairman, Christopher Cargill and Group General Manager, Winston Watson as reported in the article “Tullow Oil reaffirms commitment to Oil & gas exploration in Jamaica”, published 2015­05­28 by Petroleum Corporation of Jamaica, Go-Jamaica.

Minister Paulwell sought to determine if Tullow Oil was still committed to Oil and Gas Exploration in Jamaica as per the PSA signed in November 2014 as noted in the article  “Government Issues Oil and Gas Exploration Licence to British Firm”, published November 12, 2014 By Douglas McIntosh, The Jamaica Information Service.

After all, the price of Oil had dropped, making it pointless to explore new Oil Well, as the price on the Mercantile Exchange could not sustain the cost of mining as argued in my blog article entitled “Lower Oil Prices Good for Jamaica - How All-Electric Vehicles Sales benefit as Electricity Prices trend lower”.

So had Tullow Oil decided to call it quits on Jamaica?

Tullow Oil still examining bathymetric survey - 25 Years to locate Oil in Jamaica

Tullow Oil, however, reassured Minister Paulwell and their delegation that they were just as surprised to see them turn up on such short notice, to quote Tullow’s VP New Ventures Business, Ian Cloke: “It was a pleasure to meet The Honourable Minister and the PCJ delegation in our London Office and we look forward to working closely with The Ministry and the PCJ to complete our agreed work programme”.

Perhaps they should have watch the video “Finding The Prize: A story of Oil exploration and discovery” on Tullow Oil PLC’s YouTube Page before they made the trek all the way to their offices in the UK and in Dublin!

The Tullow Oil Executives and Geologists then proceeded to explain to them over the next four (4) days what they’d learned from the bathymetric survey, which was not much. After all, 32,000 square miles is a lot of data to process, along with other data collected during this exploratory phase to determine if Oil deposits below the seabed are worth exploring:

1.      Geological and geophysical studies
2.      Environmental assessments and the
3.      Acquisition of seismic data

If the analysis of this data bears fruit, then they can decided were to drill to take core samples for a chemical assay. If the assay shows that there is potentially a lot of Oil at the locating where the core sample was taken, then they will make the decision to drill exploratory wells.

However, given the size of the Walton and Morant basins off the south coast of Jamaica, we might be look at a few years of exploration before the find an Oil Well.

Under the Petroleum Act, Tullow Oil has twenty five (25) years to look for Oil. if they exceed that timeframe, they have to request a renewal to continue exploration. PCJ breaks down this timeframe into an exploration and Production phases as follows:

1.      5.5 and 7.5 years for exploration phase
2.      17.5 and 19.5 years production phase

Minister Paulwell was thus reassured that the project was going forward, especially as the timeframe to expect positive results could be as much as 8 years, quote:  “I am satisfied that the project is still on course and I look forward to the full determination of Jamaica’s Oil and gas prospectivity”. 

So Tullow Oil is committed for the long Haul as the completion of the Survey indicates. The price of Oil may change during that time or the Oil Well may be so massive and easily accessible, making it worth extracting.

In these early days of exploration, anything is possible!

Jamaica needs to find Oil in Jamaica, even if it takes another twenty five (25) years, as our future would be forever changed by such a momentous discovery!!

Here’s the link:

No comments: