Sagres Energy, the parent of Canadian firm Rainville Energy, which has the rights to explore three blocks offshore Jamaica for oil, says it has identified a "seismic bump" that could have three billion barrels of oil.
And now, the firm has until next March to drill and verify or give up the licence, but won't drill unless it finds a partner.
In a statement issued last Friday, Sagres announced that "results of an independent evaluation of the resource potential of certain prospectus identified in Sagres' blocks 9, 13 and 14 in the shallow-waters (20 metres) of the Pedro Bank 120 kms offshore Jamaica show(s) a gross mean prospective resource estimate (oil) of three billion barrels".
The company's chief financial officer (CFO) told the Business Observer that the term resource means that the readings "showed a seismic bump that should there be oil that is how much would be in it". He referred to Business Observer to the president and chief geologist, David Johnson, who was unavailable after several attempts to contact him via telephone.
In the statement, however, Johnson said "this evaluation provides a better understanding of the tremendous resource potential that lays in Jamaica".
"With the combination of nine of 11 historical Jamaican wells with oil shows, thre mature sources, two potential reservoirs, and large structures, we believe that it is only a matter of time before a large untapped commercial resource is discovered in Jamaica. Furthermore, Jamaica is ready to commercialise its resource potential with refining capacity of 45,000 barrels of oil per day, electricity generators that accept gas, oil, or biodiesel fuels, an established bauxite industry, and a geographic position central to the major global marine trade routes," he said.
Sagres says it will continue to pursue joint venture partners to further explore and develop its interests in the blocks and has already signed confidentiality agreements with several international energy companies to access the data for the blocks, and evaluate the potential for a joint venture. But the firm says it won't drill unless it finds a partner.
"Sagres does not currently expect to incur any material expenditures in respect of the blocks in 2010 or elect to enter into the second phase (which it must do by no later than March 2011) unless it enters into satisfactory arrangements with a partner for the funding of the Jamaican exploration programme," said the release.
The production sharing agreement (PSA) gives Sagres the right to conduct exploration operations during an initial five-year period which is divided into two phases.
During phase 1, the firm processed existing seismic data and acquired new seismic information. The second phase, requires Sagres to commit to drill at least one well or surrender the block and terminate the contract.
Sagres said it completed its phase one commitments under the PSA with the acquisition and processing of 2458 km of 2D seismic data over blocks 9, 13 and 14 offshore Jamaica.
"The interpretation and integration of the new and old data was completed in July 2010," said the exploration company in its press statement. "As part of this process, 51 existing seismic lines were digitally scanned and migrated, 8 well logs were reprocessed, and 2 lines of the new seismic data were selected for improved seismic processing. Geophysical and geological analyses of the data have resulted in a new suite of new interpretations, the definition of two drill-ready prospects, the identification of three additional leads, and a reassessment of the potential resource covered by the blocks."
The resource evaluation, which has a preparation date of August 26, 2010 and an effective date of July 1, 2010, was prepared by Chapman Petroleum Engineering Ltd.
"In the remainder of 2010, Sagres plans to: continue geologic work to progress exploration opportunities from lead to prospect status, which may include further seismic processing; begin formative work on the environmental impact assessment and site-surveys for exploration drilling; and complete the annual review and budget process with the Petroleum Corporation of Jamaica (PCJ)," added the release.
Prior to the latest round of exploration, which also gives rights to Finder Exploration Pty Ltd of Perth Australia five blocks offshore southern Jamaica (namely blocks 6, 7, 10, 11 & 12), 12 exploratory wells were drilled between 1955 and 1981, of which two were offshore.
Originally Reprted:Wednesday, September 01, 2010 [Jamaica Observer]