Thursday, January 14, 2016
Why Jamaican Private Sector funding Oil Exploration by Tullow Oil for US$300 per barrel in 2020
Jamaica may soon find Oil as exploration has begun anew, this time with Private Sector help.
Minister of Science, Technology Energy and Mining Phillip Paulwell as well as State Minister in that Ministry Julian Jay Robinson toured the explorer vessel in the Kingston Port on Tuesday January 12th 2015.
The BGP Challenger, an exploration vessel in the fleet of Chinese company BGP, a subsidiary of CNPC (China National Petroleum Corporation), will complete their seismic survey in 30 days as reported in the article “BGP wins Jamaica survey contract”, published January 14th 2016 by Jason Jiang, Splash 24/7.
Oil exploration has been on a pause for the past 10 years but Tullow Oil, who have had a contractual obligation to Oil exploration in Jamaica has finally gotten NEPA (National Environment and Planning Agency) approval to commence their data collection exercise, to quote Minister Paulwell: “For them to start this work, they had to get approval from NEPA, and they have signed an important agreement with our fisherfolk in the event of any matter for full compensation”.
Tullow Oil never actually gave up the search, being as they have a twenty five (25) year Oil Exploration license in partnership with the GOJ (Government of Jamaica). In fact, they'd have long committed themselves to searching for Oil.
They’d been constantly doing a bathymetric survey of the 32,000 square kilometer of the Walton and Morant basins as recently as July 2015 as reported in my blog article entitled “Tullow Oil's Walton and Morant Basins Bathymetric Survey – Why @TullowOilplc still interested in Jamaican Oil Exploration”.
Contrary to the newspaper article, Tullow Oil is actually continuing this bathymetric survey; Minister Paulwell is merely making a spectacle of the process, to demonstrate to the public that exploration is still ongoing. Harmless publicity, really, as Tullow Oil had merely just not been in the public eye as our focus was elsewhere.
Now US$70 million has be committed to the search in a bid to locate the best place possible to drill, with the current to quote Minister Paulwell: “They have so far spent US$10 million, and this exercise will cost them another US$4 million to acquire additional data. Although we are convinced that we have Oil and gas in and around Jamaica, we really have to pinpoint the location before drilling can take place”.
The price of Oil on the mechantile Exchange markets where Oil is traded is experiencing a lot of volatility, with Brent and U.S. crude futures temporarily dipping below US$30 a barrel on the back of weak demand for Oil globally as reported in the article “Brent hits near 12-year low as market wrestles with weak demand”, published 13 January 2016 by Jessica Resnick-Ault, Reuters.
Despite this Tullow Oil is interested and other Oil exploration companies have confirmed signing with the Ministry of Science and Technology agreements to continue exploring Jamaica's offshore Oil prospects to quote Minister Paulwell: “Today, it is about US$30, but they are still committed, and not only them, since we signed the agreement, others have approached PCJ”.
So with Oil threatening to go even lower during the Winter of 2015 and the spring of 2016 thanks to warmer than expected temperatures and thus a reduced need for heating Oil, Gas as well as weaker travel during the upcoming holidays, why is Tullow Oil still interested in finding Oil in Jamaica?
Tullow Oil resumes Oil Exploration in Jamaica - Right time for Oil producing countries to expand drilling
What different here is how the Oil exploration is being funded.
This time around, a lot of Private Sector companies, which Minister Paulwell decline to name, have come on board to fund the US$70 million exploration exercise being conducted by Tullow Oil's exploratory ship, of which BGP Challenger is one of them.
To quote Minister Paulwell, this is a game changer, as Minister Paulwell stated since the 1980's till now, Oil exploration was being funded purely by the Government of Jamaica, quote: “We first started (explorations) in the 1980s when the then Government of Jamaica was responsible for funding”.
Not only that, other as-yet to be named Oil exploration companies have joined the search. They too, are interested in the Oil exploration for the same reasons as the Private Sector; there is money to be had in the future of Oil, not the current present.
Currently the price of Oil is at US$30, affecting the economies of countries such a Saudi Arabia, Iran and other Arab States as noted in my blog article entitled “World Bank's Global Remittance Slowdown - Why Jamaica's Remittance will slow in 2016 as Saudi Arabia Runs out of US Dollars”.
It's so low that Saudi Arabia is considering the possibility of privatizing many state-owned companies as it cuts Oil subsidies from its economy as reported in the article “Saudi Arabia Cuts Spending, Raises Domestic Fuel Prices”, published December 28th 2015 by Ahmed al Omran and Summer Said, The Wall Street Journal.
The low price of Oil on the International Mercantile Exchange is also affecting everyone that producers Oil, including Trinidad and Tobago as reported in the article “T&T among Oil producing countries affected by drop in Oil prices”, published Tuesday, December 15, 2015, The Jamaica Observer.
However, despite what's currently going on, now is right time for cash-rich Oil producing countries to get in on the biggest show in town, so to speak, as this price drop is only temporary.
This a despite the low price of Oil, which was originally a plan hatched by OPEC (Oil Producing and Exporting Countries) to punish US of A for becoming a Oil producer via Hydraulic fracturing as explained in my blog article entitled “US$50 per barrel Oil from OPEC – Why Ford Motors is predicting a bright future for All-Electric Vehicles”, the price of Oil is slated to go up in 2020.
Historically, drops in Oil price have never lasted longer than five to seven (5 to 7) years.
Calculating five year forward into the future from August 2015, when the fall in Oil prices began, the price of Oil will rise to US$200 a barrel, starting its rapid rise sometime in 2019 as predicted in the article “OPEC leader: Oil could shoot back to $200”, published February 3, 2015 by Matt DiLallo, CNN Money.
So that’s why they’re here. But what will be driving this future demand for Oil?
Global Warming and Future Oil Demand - Why Private Sector planning to ride Oil's Rise in 2020
The reason will be increased global demand for Oil, particularly from the automotive and Power Generation demand caused by Global warming as noted in my blog article entitled “Dr. Taylor's states Global Warming increasing Jamaica's Energy Bill - Vybz Kartel's Summertime Soylent Green”.
It’s automotive and Power Generation demand for Oil will be cause by an increased affluence of Africa and India, whose population and economies are both seeing a boom as predicted in my blog article entitled “United Nations Population Division says 11.2 billion people by 2100 - Why Africa and India Population exploding as Insect Meat is coming”.
This demand will drive the price of Oil up, making anyone who is stockpiling Oil or drilling for Oil very wealthy in 2020 and beyond. The price is expected to go even higher, as high as US$300 per barrel based on my personal prediction.
This despite the billions being invested in Alternative energy sources such as wind and solar energy and mega projects like those in Morocco as detailed in my blog article entitled “How Morocco’s Noor Project can power the World and put light on Africa's Electricity Problem”.
So why am I so confident that it’s pass US$300 per barrel on the International Mercantile Exchange?
Peak Oil in 2020 due to Agriculture – Why Agricultural Towers coming to feed the world’s billions
This as demand for Oil to produce fertilizers will also be on the rise as more food will have to be found to feed the 9 billion people by 2050. In that year we’ll probably hit Peak Oil, the point at which demand will just equal supply, causing oil priced to rise rapidly to that US$300 per barrel figure.
This means processed insect meat a real possibility in 2023 according to the UNFAO (United Nations Food and Agriculture Organization) as reported in my blog article entitled “United Nations Food and Agriculture Organization says Insects is the Meat for the next 20 years - Soylent Green may be avoided via Indiana Jones and the Temple of Doom”.
Most likely, the construction of Agricultural Towers will finally become a reality by 2020 as predicted in my blog article entitled “How IGES Canada Ltd Vertical Hydroponic Aquaponic Towers make low cost Organic foods”.
All these activities require a lot of Energy that recycling Cooking Oil, growing algae for biofuel as well as Bio-Bean’s recycling coffee waste to make fuel pellets cannot provide as predicted in my blog article entitled “How Bio-Bean is making Biofuel from Coffee Waste as Coruscant looms”.
The Private Sector in Jamaica and the Oil Explorers lining up to sign up with Minister Paulwell known this very well. If any Oil is in Jamaica, they'll make a killing by 2020 and beyond when the price of Oil skyrockets to US$300 per barrel as the market corrects itself.