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Gippsland Offshore Petroleum Provides Update on Jamaica Project
Thursday, April 16, 2009
Gippsland Offshore Petroleum is a 50% equity partner in the Jamaica Joint Venture (JJV) that has 5 exploration permits over 14,500km2 of frontier exploration acreage offshore Jamaica over the majority of the Walton Basin.
Award of the project followed an open bid and the JJV signed contracts with the Petroleum Corporation of Jamaica (PCJ) in 2006. The technology agreement between Gippsland Offshore and BHP Billiton was a key factor for the Company to map the large area that covers many protected reefs and atolls. This technology is known as FALCON®, an airborne gravity gradiometer (AGG) system that is a non-invasive exploration tool. The presence of thick carbonate rocks in the geological section meant that historically, seismic quality was poor and measurements of other rock properties (such as density in the case of AGG) were important to help in the interpretation of the geological data.
The area was of great interest to the Company as it had been ignored for twenty years by the exploration community. However, of the 11 wells that had been drilled in and around the basin, 10 of them had oil shows proving a working hydrocarbon generating system. The presence of oil and gas seeps both onshore and offshore adds strength to this case. The last well was drilled in 1978 and the old seismic data was poor.
Exploration
The JJV signed 5 year exploration licences with the PCJ and has now completed the exploration commitments to the end of 2010. Over the initial two year period, the JJV has spent almost US$13million on exploration over the blocks comprising 24,000 line kms of AGG data, 7,000kms of long offset 2D seismic, reprocessing 12,560kms of pre-existing seismic data and geological and geophysical studies to integrate and interpret these data. Although there is no well commitment until year 5 of the permits, the JJV would like to commence drilling as soon as feasible.
Gippsland Offshore has been leading the geological and geophysical data interpretation and prospect mapping on behalf of the JJV. The JJV has established that the Walton Basin has potential to house multi million barrel oil and gas fields. The combination of the AGG and 2D seismic has been effective in producing a 3D geological model of the basin and fast-tracking the understanding of the structural framework of the basin. To date, seven prospects have been mapped with upside potential for greater than 2 billion barrels of recoverable oil.
Farm-out progress
The JJV got underway in seeking a farm-in partner for progressing these prospects to drilling early in 2008 using the services of IndigoPool, a Schlumberger subsidiary that specialises in assisting companies complete farm-outs. The onset of the global financial crisis coinciding with the high oil prices of the second half of 2008 resulted in oil companies focusing on oil production and bringing near term production on stream as soon as possible. As a result, there was reluctance from companies to take on new, frontier projects and the advice from IndigoPool has been to take the project to market again mid 2009 when the stabilisation of the oil price will see companies starting to get on with business as usual.
Jamaica project fundamentals
The fundamentals of the Jamaica project are very strong:
• Five large, offshore blocks covering 90+% of the Walton Basin
• Working petroleum system proven by oil and gas shows and detected seeps
• Opportunity rich – Eocene to Jurassic multiple play concepts with many leads/prospects in each (e.g. basin floor fans, reefal build-ups, and horst blocks, tilted fault blocks, gentle folds of marine clastics and carbonates, and fluvio-deltaics)
• New 2D Seismic and AGG data covering the majority of the area
• Provenance and reservoir/seal study
• Cretaceous and Tertiary source rock studies and geochemical modeling
• Large potential: an inventory of leads - each holding several hundred million bbl in place
• Excellent fiscal terms and 15 year income tax concession period
• Significant future energy needs onshore Jamaica (bauxite / alumina / electricity) for both oil and gas
• Geographical advantage - close to the large North America gas market in the case of a very large gas discovery
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Gippsland Offshore Petroleum Provides Update on Jamaica Project
Thursday, April 16, 2009
Gippsland Offshore Petroleum is a 50% equity partner in the Jamaica Joint Venture (JJV) that has 5 exploration permits over 14,500km2 of frontier exploration acreage offshore Jamaica over the majority of the Walton Basin.
Award of the project followed an open bid and the JJV signed contracts with the Petroleum Corporation of Jamaica (PCJ) in 2006. The technology agreement between Gippsland Offshore and BHP Billiton was a key factor for the Company to map the large area that covers many protected reefs and atolls. This technology is known as FALCON®, an airborne gravity gradiometer (AGG) system that is a non-invasive exploration tool. The presence of thick carbonate rocks in the geological section meant that historically, seismic quality was poor and measurements of other rock properties (such as density in the case of AGG) were important to help in the interpretation of the geological data.
The area was of great interest to the Company as it had been ignored for twenty years by the exploration community. However, of the 11 wells that had been drilled in and around the basin, 10 of them had oil shows proving a working hydrocarbon generating system. The presence of oil and gas seeps both onshore and offshore adds strength to this case. The last well was drilled in 1978 and the old seismic data was poor.
Exploration
The JJV signed 5 year exploration licences with the PCJ and has now completed the exploration commitments to the end of 2010. Over the initial two year period, the JJV has spent almost US$13million on exploration over the blocks comprising 24,000 line kms of AGG data, 7,000kms of long offset 2D seismic, reprocessing 12,560kms of pre-existing seismic data and geological and geophysical studies to integrate and interpret these data. Although there is no well commitment until year 5 of the permits, the JJV would like to commence drilling as soon as feasible.
Gippsland Offshore has been leading the geological and geophysical data interpretation and prospect mapping on behalf of the JJV. The JJV has established that the Walton Basin has potential to house multi million barrel oil and gas fields. The combination of the AGG and 2D seismic has been effective in producing a 3D geological model of the basin and fast-tracking the understanding of the structural framework of the basin. To date, seven prospects have been mapped with upside potential for greater than 2 billion barrels of recoverable oil.
Farm-out progress
The JJV got underway in seeking a farm-in partner for progressing these prospects to drilling early in 2008 using the services of IndigoPool, a Schlumberger subsidiary that specialises in assisting companies complete farm-outs. The onset of the global financial crisis coinciding with the high oil prices of the second half of 2008 resulted in oil companies focusing on oil production and bringing near term production on stream as soon as possible. As a result, there was reluctance from companies to take on new, frontier projects and the advice from IndigoPool has been to take the project to market again mid 2009 when the stabilisation of the oil price will see companies starting to get on with business as usual.
Jamaica project fundamentals
The fundamentals of the Jamaica project are very strong:
• Five large, offshore blocks covering 90+% of the Walton Basin
• Working petroleum system proven by oil and gas shows and detected seeps
• Opportunity rich – Eocene to Jurassic multiple play concepts with many leads/prospects in each (e.g. basin floor fans, reefal build-ups, and horst blocks, tilted fault blocks, gentle folds of marine clastics and carbonates, and fluvio-deltaics)
• New 2D Seismic and AGG data covering the majority of the area
• Provenance and reservoir/seal study
• Cretaceous and Tertiary source rock studies and geochemical modeling
• Large potential: an inventory of leads - each holding several hundred million bbl in place
• Excellent fiscal terms and 15 year income tax concession period
• Significant future energy needs onshore Jamaica (bauxite / alumina / electricity) for both oil and gas
• Geographical advantage - close to the large North America gas market in the case of a very large gas discovery
See Also
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