Linda Hutchinson-Jafar, Business Writer

Ruth Potopsingh, group managing director of the Petroleum Corporation of Jamaica. - File

PORT-OF-SPAIN Trinidad:

Jamaica, anxious to find some commercial quantities of hydrocarbon to deal with its high energy consumption levels, is now seeing new hope in reprocessed seismic data, according to a top-level industry official.

After 50 years of explorations, the Petroleum Corporation of Jamaica (PCJ) has never been more optimistic about the prospects of striking commercial deposits of oil based on new data generated by its licensed explorer, Australia-based Finder and its joint venture partner Gippsland.

"We were in Houston last week at the oil and gas expo, in which we made the findings of Finder public and the leads are very, very positive," said Dr. Ruth Potopsingh, PCJ group managing director, speaking with the Financial Gleaner from the margins of a petroleum conference in Port-of-Spain.

"The seismic reprocess data as well as new seismic lines that Finder has done show very, very positive leads and we have a number of interested parties who are willing now to come and do some prospecting drills to drill initial wells, " Dr. Potosingh told the Gleaner.

"We have reasons to have confidence. The information is very, very positive; there are several good leads."

Finder is now seeking partners for drilling exploratory wells on their offshore prospects.

Rainville of Canada is expected to begin its seismic programme by mid-year.

The Houston trip referred to by Potopsingh was the launch of a second licensing round for explorers for another 4 onshore blocks (Negril, Windsor, Portland and Santa Cruz), and eight offshore covering a combined range of over 104,000 square kilometres. Bids are due by May 1.

The winning contracts will be pinned to five year exploration agreements and a 20-year production schedule, with an optional 10-year renewal.

In 2003, Jamaica, a high consumer of energy, revived its interest in the search for oil and gas, both onshore and offshore, after decades of disappointment.

Two years later, a data package and analysis of the petroleum prospectivity was prepared and the first formal round was put out to the public with Finder and Rainville being granted licences for five and three offshore blocks, respectively. The eight blocks cover over more than 23,000 square kilometres.

"We will continue to use production sharing arrangements for exploration and production. Our intention is to attract exploration activity," said Potopsingh.

The initial agreements were royalty based at 12.5 per cent.

"We expect that Jamaica, now a frontier province and a hidden jewel in the Caribbean will produce important economic quantities of both oil and gas in the next decade, " said Potopsingh.

Looking at Jamaica's high energy consumption needs, 90 per cent of which is satisfied by imported petroleum, the PCJ boss said the island's solution "lies in the hope of finding some commercial sources of oil or gas."

Speaking at the annual Trinidad and Tobago Petroleum Conference held over two days earlier this week, Potopsingh said the volatility in oil prices particularly in recent years has had an adverse impact on financial planning in the Jamaican economy.

In 2005, the island's oil bill reached US$1.3 billion, increasing by 40 per cent over 2004 and by 94 per cent over 2000.

"This means that for every US dollar we earned in 2005 from merchandise exports, we used 75 cents to buy petroleum and petroleum based products," she told a stunned audience.

The oil bill was expected to reach US$1.5 billion in 2006.

Jamaica's per capita energy consumption is also one of the highest in the western hemisphere, moving from 5.6 barrels of oil equivalent (BOE) in 1987 to a current level of 10 BOE.

Its sole refinery, Petrojam, has a rate capacity of 35,000 barrels of crude per day, with plans to go to 50,000 barrels.

Potopsingh said Jamaica was not treating with urgency the implementing of a new energy policy to rebalance demand for fossil energy and supply security with longer term solutions of efficiency, conservation and implementation of renewable energy projects from indigenous sources for sustainable development.

PCJ is actively increasing collaboration with the private firms Ñ including the hotels sector, where more than 12,000 room are being added over five years Ñ to adopt energy savings devices.

business@gleanerjm.com