HOUSTON—It was a historic moment for the Caribbean island nation as it officially launched its first ever licensing round for bidding in cooperation with Wood Mackenzie, in a roadshow held on July 10. The country is offering investors and stockholders a mix of onshore and offshore blocks with a simple fiscal regime and a flexible low-risk contract.

“A new chapter is beginning in the history of our nation,” said Antonio Isa Conde, minister of Energy and Mines. “We are stepping forward into virgin territory, but are optimistic about the level of interest already shown by the international companies and investors.”

The energy officials said that technical data is freely available, which includes 21,500 km of 2-D seismic. Areas offered for bidding include six blocks in the Cibao Basin, one block in the Enriquillo Basin, three blocks in Azua Basin and four offshore blocks in the San Pedro de Macoris Basin, all of which have at least three plays in addition to geophysical and geographical data to begin the exploration process. About 86 wells have been drilled in the basins, out of which roughly 22 wells have had oil and gas shows. However, there has been no commercial production so far.

The acreage is approximately 500 sq km for onshore blocks and 2,500 sq km for offshore blocks.

The country is also open for bidding to the industry stakeholders beyond the current round. Besides the 14 blocks offered, operators have the option to propose other blocks for the bidding process until mid-September. First contract awards are expected to be announced by the end of the year.

Energy officials called the awarding criteria “simple and transparent” with a low cost of entry proposition and no signing bonus required. Licensing terms include a minimum investment of $2 million for onshore blocks and $4 million for offshore blocks.

“With an awarding process based on a clear and transparent process, now is the time to invest,” said Alberto Reyes, vice minister of hydrocarbons during his presentation at the event. “This is an opportunity to explore our frontier basins and create value for investors.”

The awarding criteria is focused on incentivizing exploration and blocks will be assigned solely on additional work commitments in the first exploration phase.

Reyes pinned hopes on the positive and sustained macroeconomic indicators in the country to attract both domestic and foreign investors.
“Over the past few decades, Dominican Republic has continued to reform its economy and public image by developing key industry sectors,” he said. He added that investors will have access to preferential markets through free trade agreements with U.S., Central America and Europe.

Juan Agudelo, director of upstream consulting at Wood Mackenzie, said that the Dominican Republic has recently designed its fiscal policy per production sharing contract terms weighing the objectives of both the state and the operator.

“The fiscal regime is designed to be simple, flexible and equitable while allowing the production of projects of all sizes,” he said.

Faiza Rizvi can be reached at frizvi@hartenergy.com.

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