The government and Petroleum Corp. of Jamaica, Kingston, launched a licensing round with four onshore and 22 offshore blocks. The round closes July 15, 2005.
Offered are the Negril, Santa Cruz, Portland, and Windsor land blocks and 22 blocks offshore totaling 17,790 sq km on land and 127,455 sq km offshore.
No oil and gas rights are presently in force in Jamaican territory. PCJ and an alliance led by Jebco Seismic (UK) Ltd., Epsom, Surrey, UK, are promoting the round.
Coverage of the land blocks is Portland 4,309 sq km, Negril 2,856 sq km, Windsor 2,446 sq km, and Santa Cruz 1,416 sq km.
The smallest offshore blocks are about 2,950 sq km each. Block 22, the largest of the offering, is 26,780 sq km. Block 19 covers 16,780 km, Block 21 has 11,890 sq km, and Block 4 has 11,560 sq km.
In evaluating bids, the Jamaicans will take into consideration minimum work program and exploration outlay with preference to bids that include seismic and at least one well in each play type; applicants' technical competence and financial strength; and the applicants' willingness to completely evaluate the license's potential within 5 years.
Concession terms
The key concession terms include a 5-year primary exploration period followed by a 20-year production period and an optional 10-year production extension.
Maximum income tax rate is 331/3%, but multiyear tax exemptions are considered.
The government will impose a 12.5% royalty on land and shallow-water production and a reduced royalty on a sliding scale on production from deep water.
No restrictions are placed on production exports or repatriation of capital, but 2.5% of profit is to be reinvested in the local community and environmental projects. A negotiated annual sum is to be spent on training Jamaican personnel.
Sale, farmout, and joint venture opportunities are allowed.
A recent evaluation of all data led to indications that the country could contain the potential for large oil and gas accumulations (see map, OGJ, Sept. 13, 2004, p. 49).