A groundbreaking license award is set to propel United Oil & Gas closer to unlocking the substantial hydrocarbon potential offshore Jamaica. The Ireland-headquartered company has received a crucial Beach license from Jamaica’s National Environment and Planning Agency (NEPA), allowing for vital seabed sampling operations. This development follows NEPA’s earlier approval for surveys in the Walton-Morant basins, marking significant progress in the company’s exploration efforts.
The newly granted Beach license, renewable annually, authorizes United Oil & Gas to conduct a piston core survey within the foreshore and seabed areas of the Walton-Morant Basin. This operation involves collecting seabed sediment samples for geochemical analysis, a critical step in assessing the presence and potential of hydrocarbons in the region. These surveys are designed to further de-risk the license by providing essential data that supports prospectivity, including identifying potential hydrocarbon indicators within the seabed. The sampling program will complement ongoing technical workstreams aimed at enhancing the asset’s value and attractiveness to potential farm-in partners.
A Crucial Step in Exploration
The Walton-Morant license, which United Oil & Gas holds 100% interest in, covers a vast 22,400 square kilometer area off Jamaica’s southern coast. It is considered a frontier exploration opportunity with significant potential, drawing comparisons to prolific basins like Guyana’s Stabroek Block. United Oil & Gas estimates the license area could hold over 7 billion barrels of unrisked mean prospective resources, with dozens of identified leads and prospects, eleven of which have been independently verified.
CEO of United Oil & Gas, Brian Larkin, commented on the milestone: “The granting of the Beach Licence marks another important step forward in our efforts to unlock the potential of the Walton Morant Basin. Seabed sampling will provide valuable geochemical insights that support our technical evaluation and further enhance the prospectivity and value potential of the Walton Morant licence area.” He added that this progress, alongside parties actively engaged in the data room, makes the asset even more attractive to potential farm-in partners. The company has secured an extension for the Walton-Morant license, now valid until January 31, 2028, providing the necessary stability for farm-out discussions.
Background and Context
Jamaica’s journey in oil and gas exploration has a long history, marked by previous limited successes and sporadic drilling activities dating back to the 1950s. However, all wells drilled, both onshore and offshore, have shown evidence of an active hydrocarbon system, indicating considerable potential in the largely unexplored offshore basins. United Oil & Gas has been actively pursuing this potential since acquiring the license. The company has invested over US$39.3 million in exploration efforts over the past decade.
The Jamaican government, through the Petroleum Corporation of Jamaica (PCJ), has been instrumental in fostering exploration, encouraging foreign investment and expertise. The government’s support is further evidenced by the license extension and the streamlined approval processes. This proactive stance positions Jamaica as an emerging player in the Caribbean’s offshore energy landscape, following significant discoveries in neighboring Guyana and Suriname.
Implications for Jamaica and the Community
The potential success of the Walton-Morant exploration could be transformative for Jamaica’s economy, offering a prospect of doubling the island’s Gross Domestic Product (GDP) and generating substantial tax revenue. However, this potential also brings challenges. Concerns regarding the responsible management of resources, potential environmental impacts, and equitable benefit sharing within the community are paramount.
The Jamaican government has committed to international environmental standards and responsible exploration practices. NEPA’s role in granting environmental permits and licenses underscores the regulatory framework in place to manage these activities. The company’s commitment to de-risking the license through technical work, including the planned seabed sampling, is crucial for building confidence among investors and stakeholders.
The current news signifies a critical juncture for Jamaica’s energy sector. The successful de-risking of the Walton-Morant license and the attraction of a farm-in partner could pave the way for drilling operations, potentially ushering in a new era of economic development for the island nation. This development is significant news for the region, as it highlights the untapped energy resources in the Caribbean.
Future Outlook
With the environmental permit and Beach license secured, United Oil & Gas is poised to advance its technical work program. The company is actively engaged in farm-out discussions with multiple parties, seeking a partner to help fund the significant costs associated with exploration drilling, estimated between US$30 million to US$50 million per well. The success of the upcoming seabed sampling surveys will be pivotal in refining drilling targets and bolstering investor confidence. The ongoing efforts aim to transition Jamaica from an energy importer to a potential energy producer, a prospect that holds immense promise for the nation’s future.