Susan Smith, Staff Reporter
Doreen Frankson, president of the Jamaica Manufacturers' Association (JMA), shares a joke with Paul Quesnel (centre), president of Trinidad and Tobago Manufacturers' Association and Phillip Paulwell (left), Minister of Commerce, Science and Technology, during the Jamaica Manufacturers' Association regional meeting at the JMA Office 85a Duke Street, downtown Kingston on Wednesday. -
RUDOLPH BROWN/CHIEF PHOTOGRAPHER
GOVERNMENT IS to issue two licences for the onshore and offshore exploration of oil and natural gas in Jamaica by October, says Minister of Commerce, Science and Technology, Phillip Paulwell.
The companies will start their exploration operations as soon as they receive the licences. He said he was withholding the names of the two privately owned companies until additional details were ironed out.
"There will be a royalty charge on every barrel of oil or the equi-valent in gas that is produced and that is what we are negotiating now," he explained. If Jamaica is found to have commercially viable amounts of oil or gas, the ratio now being negotiated will prove critical.
With the price of oil soaring, the minister described the timing as ideal. Supply shortages and growing demand in world oil markets are pushing prices to record levels, which in turn is fostering a massive increase in exploration activity.
POTENTIAL FOR OIL AND GAS
Between 1955 and 1973, seven exploratory wells were drilled onshore and off Jamaica's coasts. Another three wells were drilled between 1980-1981, but to date no commercial reserves of oil or gas have been found.
Both oil and gas have been found in commercial quantities in Cuba, however, and current geological data suggest that Jamaica possesses some potential for commercial quantities in the Walton Basin, an area of relatively deeper water located between Jamaica and the Pedro Bank and on the Pedro Bank itself.
Jamaica had originally offered 22 offshore and four onshore areas for exploration. Three applications were received for 10 exploration zones as at the June 15 deadline for the submission of bids.
Speaking in an interviewfollowing the Jamaica Manufacturers' Association's Regional Manufacturers meeting held on Wednesday at its Duke Street offices in Kingston, Mr. Paulwell said actual drilling for oil would not take place immediately after the contract signing, as the companies would have to carry out seismic work and further data gathering.
The expectation is that the terms of the agreement would be finalised in October, said the minister. The investors need to be satisfied with the financial terms, and the production sharing aspect of the agreement. The Govern-ment, he said, will not invest in the activity but intends to share in any benefits to be derived.
SOUTH COAST A SITE FOR EXPLORATION
Minister Paulwell also declined to state the specific locations earmarked in the island for the exploration, but mentioned Jamaica's South Coast, as one of the sites for the offshore exploration.
"It means NEPA (The National Environment and Planning Agency) will have to do the environmental impact assessment," he stated. "We will conduct a round table discussion with persons with fishing interests in Jamaica."
His Commerce, Science and Technology Ministry has already met with key persons in the fisheries industry for the south coast. He said he had assured them that exploration would not begin without involving them and examining any possible impacts on them.
If the exploration proves successful, Mr. Paulwell said it would give Jamaica an opportunity to deal with the energy crisis.
"It does not mean people will see immediately lower prices, but it will enable us to affect in a fundamental way our debt problem," he said. "I believe we have to reduce that and we can assist our manufacturing sector to be more efficient."
If Jamaica does strike oil, Mr. Paulwell said there would have to be a massive expansion of Petrojam above what is currently planned for the facility. He also suggested a possible relocation of the facility to another area.
