Jamaican oil exploration

22nd April 2026

Highly respected Jamaican economist, Dr Damien King, has caused quite a stir in Jamaica and around the Caribbean in recent days by arguing that if Jamaica finds oil the best policy response would be to leave it in the ground.  King’s argument is that the historical evidence indicates that resource rich economies typically perform worse than resource poor economies, who have to rely on their own innovation and creativity rather than living off the fat of the land (the resource curse hypothesis). 

The context for this is the recently reported positive results from a seabed piston core survey at forty-two selected locations in the United Oil and Gas operated Walton Morant block, off the south coast of Jamaica. The survey involves taking samples of seabed sediments and conducting a chemical analysis of the collected sediments to determine the presence of hydrocarbons. The results of the recently concluded survey indicated the presence of butane and pentane molecules, which is a strong indicator of an active petroleum system. 

While I can appreciate both the excitement that this news has generated in Jamaica, as well as the caution expressed by King, there is a very long road to still travel before Jamaica has to worry about the resource curse from oil production. There is a big difference between positive piston survey results and declaring a commercial discovery of an oil and gas field.  

There has been active oil exploration in Jamaica for many decades, with onshore exploration wells being drilled back in the 1950s and then offshore exploration activity picking up pace in the past decade. This exploration campaign is centred on the extensive (22,400 square km) Walton Morant block, with Tullow signing a Production Sharing Contract for the block with the Petroleum Corporation of Jamaica in 2014.  

At the time, Tullow was seen as one of the world’s hot exploration companies with some notable successes, especially in Uganda and Ghana.  In the Caribbean region they had a very encouraging discovery in French Guiana in 2011, with the Zaedyus well. This ultimately turned out not to be commercial after a very disappointing series of appraisal wells drilled by Shell and Total.  I led an energy services trade mission from Trinidad to French Guiana in this period, on the expectation that there would be a commercial find and services would be required from Trinidad: it turned out to be a fun but fruitless mission. 

In the lower oil price environment post 2015, Tullow ran into some problems and had to refocus on efficiency and production and strengthening its balance sheet, rather than the aggressive exploration strategy that had characterised the prior years. 

In 2017, Tullow farmed-out 20% of the license to the small London-listed oil company, United Oil and Gas. Then in 2018 they conducted a 2,250 km² 3D seismic acquisition campaign on a portion of the block. This seismic survey identified the Colibri prospect as a high-grade target with substantial potential. Despite this potential Tullow did not progress to drilling an exploration well, and in 2020 they gave up the license, taking a US$36 million hit in the process. 

With Tullow’s withdrawal, the government of Jamaica assigned all of the interests in the block to United Oil and Gas, and they extended the license exploration period to give them more time to find the finances needed to drill an exploration well.  Six years on and United Oil and Gas are continuing to pursue the opportunity and raise the capital needed for the programme. The recent seabed piston core survey needs to be seen in that light: an effort to collect more data to attract the investors needed to pursue the opportunity. 

If United Oil and Gas are to progress, this will likely involve them farming out the majority of the ownership to a much bigger operator with deeper pockets able to withstand the very high risks of a wildcat well in water depths of around 2,400 feet. At these water depths the well would need a semi-submersible drilling rig, with current day rates typically over US$ 450,000 per day.  

The survey results are encouraging, but there is still a long road to travel until there is a decision on an exploration well. And then there will need to be a robust appraisal campaign. And only then will it be possible to think about a commercial development. At best, this is still many years away.

I am sure Damien King would respond by saying that Jamaica should be thinking years ahead and planning with the possibility in mind. As he explained, the cure for the resource curse is strong institutions and sound economic policy.  I would certainly agree with this perspective, but those are things that they should continue to do whether oil is found or not. 

As things currently stand, the odds are probably more likely to be that any oil and gas under the seabed in Jamaica’s economic zone will remain there not because of government policy, but because there is no investor willing to take the risk on an exploration well.  Unlike King, I hope I am wrong in that assessment but that is how it looks to me at present.