United Oil doubles down on Jamaica, hires country manager
UNITED OIL & Gas Plc has hired a country manager to lead its efforts in Jamaica as the company moves towards new surveys in its hunt for oil.Q
Nearly half of the £1 million of equity recently committed in an additional capital raise will go towards the tests in Jamaica.
“The way forward is Jamaica and Waddock Cross,” said United Oil CEO Brian Larkin, who visited Jamaica this week for in-person meetings and hosted a shareholder update on Wednesday. “The proceeds from t he fundraise will be used to advance the 2024 work programme towards Jamaica,” he said.
The funds will go towards hiring a consultant to conduct a piston core survey, that is, scooping up oil from the ocean floor that has naturally leaked to the surface, the company said.
“That would de-risk the project considerably,” said Larkin.
Overseeing this endeavour is new country manager Herona Thompson, a Jamaican geologist with experience in the petroleum industry. Her role will encompass overseeing operations and implementing the agreed-upon work programme in collaboration with the Ministry of Science, Energy, Telecommunications and Transport.
Jamaica has become even more important to United Oil since its recent decision to exit Egypt, previously the cash cow for the company. In that country, foreign currency exchange conversion became exceedingly “difficult” and impaired the operations. It also holds a stake in oil operations in Waddock Cross, United Kingdom.
There is no doubt that Jamaica has oil, Larkin asserted on Wednesday. But to convince others, United Oil needs working evidence of active systems in commercial quantities. The ocean floor test would augment seismic 2-D and 3-D tests.
“There is compelling evidence of a working hydrocarbon (petroleum) system in Jamaica,” said Larkin.
Historically, 11 mini wells were drilled in Jamaica, with nine onshore, all containing some oil. Also, workers at United Oil have stumbled on large oil stains in mud. Larkin also said Jamaica has “gas seeps” to the north of the island.
He described the opportunity in Jamaica as “colossal”, and akin to the size of 100 North Sea blocks or 1,000 blocks in Mexico.
United Oil continues to seek a large partner to farm out the oil. Drilling wells will cost some US$30 million. The company notes that the piston core tests will assist in reducing the risk to the partner.
The oil explorer previously announced that it had found a partner, but the unnamed entity pulled out of the deal “at the eleventh hour”.
Still, the Jamaican government extended its oil exploration permit for another two years.
United Oil holds the right to search for oil in a 22,400-square-kilometre offshore zone known as the Walton-Morant block. The largest repository within the block is an area called Colibri, which lies south of Westmoreland; but United Oil still needs to prove that the substances detected are indeed oil, which will require investments to dig the ocean floor for core samples.