Former Prime Minister of Jamaica, Bruce Golding says a number of examples in the region point to mistakes that can be made by oil producing nations and while time will tell how successful Guyana is in avoiding pitfalls, Jamaica, now with ‘probable’ prospects offshore, must also prepare.
In a column published in the April 15 edition of the Jamaica Observer, Mr. Golding said one cannot help being more hopeful, even if not yet excited, about Jamaica’s quest to find oil and gas based on recent developments. “The search, which started way back in 1955 off the coast of Negril, has continued sporadically and we have had our fair share of hopes raised and hopes dashed,” he reminded.
What is different this time is the finding, he said, with the assistance of local fishermen, of a live oil seep last year and the recent decision by Tullow Oil PLC, in partnership with United Oil & Gas — both British companies — to conduct 3D seismic surveys and analysis on Jamaica’s south coast.
“Our hopes could well be dashed again, but the prospects seem to be moving from possible to probable. Improved technology is also in our favour in identifying deposits. Tullow Oil has had an impressive record of discoveries in the drillings it has undertaken, after careful evaluation, particularly in Africa,” the former Prime Minister said.
Turning his attention to the need for careful planning, he said while it is not wise to count chickens before they hatch, it is wiser to start thinking what would be done if they do hatch. “The discovery of oil or gas could be the biggest game changer in Jamaica’s economic history. Our annual oil import bill is in excess of US$1 billion. In 2008 when oil prices reached the record level of US$147 per barrel, it was in excess of US$2.7 billion. If Jamaica were to become not only self-sufficient in oil or gas but a net exporter, the impact on the economy would be awesome,” he stated.
But the need for “deliberate, strategic and forward-thinking” is absolutely necessary he said, if Jamaica is to avoid the pitfalls being experienced by countries around the world, including neighboring Trinidad and Tobago and Venezuela.
Turning his attention to Guyana where multiple discoveries off the country’s coast now exceed 3.2 billion barrels of oil, the South American CARICOM member he said, “…has already set about developing a policy framework for the management of this new sector, seeking to secure the gains and avoid the hazards. Time will tell how successful it is.”
It was reported in March that the Polarcus Adira will explore the waters offshore Jamaica under an agreement the Petroleum Corporation of Jamaica (PCJ) had entered into with Tullow Oil, about four years ago. The vessel will comb the waters for a 60-day period. Tullow Oil previously conducted two-dimensional explorations in 2016 and 2017.
“It is still early days. Much will depend on the success of the exploration effort and, if it succeeds, the costs of production, the behaviour of the market, the terms of the production-sharing arrangements, and the extent to which we can ring-fence the related transactions to keep out corruption,” Mr. Golding said.