Sagres doesn’t have to drill for oil offshore Jamaica by next March but only has to commit to the next phase of exploration by the deadline date, the firm’s president, David Johnson, clarified.

At the same time, officials at the Petroleum Corporation of Jamaica (PCJ) are confident that the small oil outfit will find a financial backer to move forward.

“Sagres has until next March to elect to enter the into second phase of exploration on one or more of its three blocks,” Johnson told Caribbean Business Report. “This second phase of exploration carries a commitment to drill a minimum of one exploration per block.”

Special projects manager of the Petroleum Corporation of Jamaica (PCJ), Dr Raymond Wright, who on Wednesday confirmed that the seismic structure indentified by the company in Jamaican waters was very significant and “could contain up to 3 billion barrels of crude oil”, said in a JIS News interview that the firm was “now seeking a partner and they are very active. I am sure they will be successful”.

Wright, explained that Rainville Energy — the subsidiary of Sagres Energy with three exploration blocks offshore Jamaica — was a small oil exploration outfit and could not itself drill a well.

“Wells cost a lot and depending on the depth of the water, it could cost up to US$40 million to drill a well,” he noted.

He added that an equity partner would therefore be needed to either drill, operate or provide the capital to drill and operate, while sharing the economic rent that accrue from the venture.

Should oil be found, Sagres and its equity partners would recover its exploration cost and the oil and/or gas is shared among the investors and the Government, but neither the PCJ nor the Government will make any investment.

A discovery would also significantly boost Jamaica’s balance or payments as the country imports over 90 per cent of its energy needs with an oil import bill projected to reach nearly US$2.5 billion in 2010.