Oil explorer gets extension to find drilling partner
Published:Friday | February 10, 2012 | 12:00 AM
Sagres Energy has got a four-month extension from state company the Petroleum Corporation of Jamaica (PCJ) to seek a drilling partner in its quest for oil off the shores of Jamaica.
It's the first major extension offered to the Canadian company, which specialises in oil exploration but wants to venture into the costly side of the business - oil drilling.
The PCJ has granted Rainville - a subsidiary of Sagres - an extension to April 30, 2012 on the first phase of its programme, to allow potential joint-venture partners sufficient time to do their evaluation of the blocks. "Concurrently, the company is in discussions with several parties with regards to a potential farm-in on these properties," said Sagres on Monday.
The PCJ's statements echoed that of Sagres.
The energy authority said Tuesday that the extension was granted to Sagres Energy, the holder of offshore blocks 9, 13 & 14, after a review of the terms of the Production Sharing Agreements and in recognition of the state of negotiations with potential partners for drilling.
Sagres had hoped to start drilling by yearend 2011 to meet its original deadline set by the Government. The company continued to telegraph confidence this week despite the delays.
"We continue to be excited by the potential of the La Concepcion prospect, a prospect mapped straddling Blocks 9 and 13, with an independent evaluation establishing a gross mean prospective resource estimate of 3.0 billion barrels," said President and CEO of Sagres Gary Wine.
"We look forward to advancing this project to the drilling stage and we are holding discussions with potential partners," he said.
Jamaica's new energy minister Phillip Paulwell too says the prospects for striking commercially viable oil offshore Jamaica appears more certain, based on the data collected to date indicating that there could be as much as 10 billion barrels of reserves in the Walton Basin.
Sharing agreements
Rainville last year mapped an offshore oil drill site by Pedro Banks situated some 120 kilometres off the coast of Port Kaiser. The company and PCJ are party to three production sharing agreements covering the right to explore and develop three blocks covering approximately 8,860 square kilometres.
The company believes its three blocks might hold some three billion barrels of reserves, but has said that these are prospective, not proven, reserves.
Sagres has spent CDN$13.16 million in Jamaica, Colombia and Guyana on evaluation and intangible exploration as at June 2011 (December 2010: CDN$5.6m). The increased activity resulted in Sagres making a six-month net loss of CDN$6.5 million compared with a CDN$2.2 million net loss a year earlier.