The Dominican Republic has launched its first ever bid round in the hope to attract oil companies to further explore the country’s potential hydrocarbon resources.
The Dominican Republic, located on the Island of Hispaniola in the Greater Antilles, has launched its first ever oil and gas bid round. The round was opened at a roadshow event in Houston, TX, on the 10th of July 2019. A total of 26 companies featuring the likes of Tullow Oil, Total, and Shell, attended the first round at the roadshow.
Announced are the 14 blocks on offer across 4 basins both onshore and offshore:
- Cibao Basin – 6 Onshore Blocks
- Enriquillo Basin – 3 Onshore Blocks
- Azua Basin – 1 Onshore Block
- San Pedro Basin – 4 Offshore Blocks
The bid round is split into 3 sections with the closing of the round on December 1st, 2019. During the first section from opening until October 13th, interested companies will send documents validating their ‘financial and technical capacity’ to the Ministry of Energy and Mines. The second section consists of the Ministry finalizing the offered blocks and posting the prequalified companies to go to auction on November 8th. On November 27th, the companies will submit bids by blocks with the winners announced. From there, the winning companies will sign their Production Sharing Contracts (PSC) with the Ministry which are subject to National Congress approval. Blocks will be awarded on the company’s willing to execute work commitments. The PSC states that operators will have between 8-10 years to explore the awarded areas and must drill one well in this period.
The Dominican Republic is located within the North Caribbean Strike-Slip plate boundary zone, where sinistral transform occurs between the North American plate and the Caribbean plate. The result of the plate boundary has led to basin development in the country. The 4 basins with areas offered began formation in the Paleogene with deposition occurring still at present day. The Cibao is classified as an asymmetrical strike-slip basin, San Pedro as a forearc basin, while the Enriquillo and Azua basins are synclinal ramp basins. Studies have identified a range of formations which are probable source (shales & siltstones) and reservoir (sandstones & conglomerates determined by outcrop and well tests) units with most basins showing fault-related trap structures. Models carried out by the Ministry suggest there are deeper sources present which hopefully in line with the success of the bid round could lead to unlocking their potential and developing plays.
Map showing the offered areas in the 2019 bid round (Source: MapStand Limited)
The Dominican Republic remains relatively unexplored with no major oil and gas discoveries made. Since the beginning of the country’s exploration history at the start of the 20th century, over 80 wells have been drilled and more than 21,000 km of 2D seismic has been acquired. Two discoveries have been made in the Azua basin, Higuerito in 1904 and Maleno in 1939, both of which produced oil for no more than 2 years before being abandoned. The last well drilled was in 2003 and currently no offshore wells have been drilled. Petrolera Once Once, Murfin Dominicana Inc, and Mobil Exploration Dominicana Inc previously held licences and carried out exploration activities but with no commercial success. Any new operators will be encouraged to acquire new geological and geophysical data to de-risk and evaluate the potential existing petroleum systems.
With Cuba also currently holding their own bid round, the North Caribbean will hopefully see an increase in interest and investment from companies seeking to explore and develop the area. The Dominican Republic might be another piece of the puzzle in the potential that the Caribbean has as a hydrocarbon-producing region.
The results of the bid round will be available on MapStand systems once announced.