Jamaica's oil hopes advance as United Oil and Gas begins drilling rig study

KINGSTON, Jamaica. Jamaica's long-held ambition to become an oil and gas producer has entered a new phase, with British licence holder United Oil and Gas announcing a study to determine the availability and daily costs of drilling rigs.

Two potential sites have been identified through seismic work in recent years in the Walton-Morant area off the island's south coast. Colibri lies in about 750 metres of water and Thunderball in 1,900 metres. Together they have a potential of about one billion barrels of oil.

"This drilling study marks an important step in our operational planning to advance the Walton-Morant licence towards a potential future drilling programme," said Donal Meehan, United's chief operating officer.

The company has appointed NRG Well Management, also of the UK, to assess rig suitability, daily market rates, mobilisation requirements, long-lead equipment and procurement schedules for a potential exploration campaign. NRG will approach global rig contractors and supply-chain vendors directly.

Seeking a major partner

The junior company has made no secret of its wish to farm out future operations to a larger operator, given the billions required. It is relying on surveys earlier this year, which showed traces of butane and pentane hydrocarbons, to attract a supermajor to the licence area.

When the company briefed cabinet earlier this year, Energy Minister Daryl Vaz had to issue a statement calming expectations, after many Jamaicans interpreted talk of future exploratory drilling as confirmation that commercial quantities had been found.

The government has said nearly a dozen wells have been drilled in more than 100 years, including two offshore that did not yield encouraging results.

If successful, Jamaica would join Guyana, Trinidad, Suriname, Barbados and Belize as producers within CARICOM. Guyana, by far the bloc's largest producer and exporter, is set to exceed one million barrels a day in the coming months.