OPTIMISM AND CAUTION AS JAMAICA SMELLS OIL

Cautious optimism is the phrase flowing through the halls of power and the communities of Jamaica as the nation anticipates what may very well be a major transformational phase in its economy. Oil.

Following recent exploratory offshore test drilling in the waters of the southeast coast of Morant Bay, initial results suggest that ‘what lies beneath the surface’ could eventually flow to Jamaica’s long-term economic benefit.

The current exploratory phase is being led by the British firm United Oil & Gas, and early signs from their findings point to the project moving to the next phase, with the Jamaican government seeking involvement from major global oil industry investors.

Jamaica’s Minister of Energy, Darryl Vaz, is optimistic about the country’s fossil energy future, but he does so with a hint of caution.

“The Ministry calls on all stakeholders to remain patient and cautiously optimistic during this process and will continue to provide updates as new information becomes available,” he said recently. “I am cautiously optimistic and praying very hard because of what the impact of any discovery would be.”

However, experts say even if Jamaica discovers enough oil deposits to make drilling commercially feasible, construction and installation of equipment might not start before 2027-2028, with actual drilling and production then coming onstream around the 2030s.

HIGH EXPECTATIONS

Nonetheless, expectations are high that Jamaica could be next in line for a petroleum-driven economic transformation similar to that being experienced by Guyana. At the same time, that Caribbean country’s next-door South American neighbour, Suriname, is also set to ‘take off’ possibly as soon as 2028 after many years of delays linked to negotiations with industry investors. Guyana is already making impressive headway in the industry, with Suriname now poised as the next regional ‘oil giant’, while Trinidad and Tobago has had a long history of ‘boom and bust’ phases in its petroleum sector.

The potential for Jamaica’s oil industry is outlined by the company currently carrying out the tests, the UK’s United Oil and Gas. In an update on its website, the firm reports: “The licence area includes 21 prospects, each containing more than 100 million barrels of oil potential. The largest of which potentially contains more than 1.1 billion barrels, mid-case unrisked prospective recoverable resources.”

Calling Jamaica “an excellent opportunity for monetising exploration”, United Oil and Gas made this conclusion in the executive summary of a 2024 update on its explorations in Jamaica: “The opportunity now exists for a suitably qualified and capable company to partner with United Oil & Gas to realize the massive potential of the Walton-Morant licence.”

Industry experts say that it is a significant prospect and augurs well for Jamaica’s expected entry into the global oil market.

CAUTION

But as Min. Vaz said recently: “I remain cautiously optimistic but definitely encouraged.”

Meanwhile, as Jamaica positions itself to be a possible player in the global fossil fuel market as a producer, debate has already started locally about the environmental implications and Jamaica’s policy stance on global climate change issues.

Management of the anticipated wealth and the so-called oil-curse has also triggered another type of caution. Dr Damien King, a lecturer in economics at the University of the West Indies, Mona campus in Jamaica, recently caused an uproar in some circles with the view that he hopes the oil talk amounts to nought. He fears that if not handled properly, it could lead to the type of mismanagement and corruption suffered by some other countries which have had a gush of oil wealth but whose citizens, in the main, remain on the breadline.