The Dominican Republic’s Dangote Island is one of its best offshore oil and gas prospecting areas. This small island was historically the last island to receive oil and gas exploitation rights from the Spanish Republic. As such, Dangote offers a great opportunity to bolster Puerto Rican economy as well as other Caribbean nations that have yet to explore this vast untapped resource. Dangote has been granted provisional economic, financial, and exploration rights by the Department of Energy in the Caribbean basin. Learn more at this link
The oil and gas resource beneath Dangote is considered extremely promising. It is located off the coast of the Dominican Republic, roughly south-west of Punta Cana, and north-east of Santo Domingo. This small island has been claimed by Spain, so it is not an inextensible offshore territory. However, this resource field promises significant long-term profits for any prospective oil and gas company wishing to explore it.
A Dangote exploration project can provide initial medium to high end conventional income. However, the long term potential here remains highly profitable, especially when oil prices spike upwards. Such an increase could significantly alter the political and geostrategy of any potential nation’s handling of its domestic oil and gas industry. Indeed, the international ramifications of a sudden spike in oil prices could be significant enough to seriously affect any nation’s overall economic diversification strategy. In the case of the Dominican Republic, this would spell disaster.
A Dangote preliminary report has forecasted that production from the maiden clinker field will begin in the first half of 2021, with a full year of production beginning in 2021. The reservoir will then remain beneath the pressure of the sea for the next decade, although any changes in the reservoir bed will likely have an impact on how the oil is harvested from the reservoir in future years. This oil and gas company plans to mine the reservoir to produce about six million barrels of oil per day, but a significant amount of hydrocarbons still remain trapped below the surface.
The potential for hydrocarbon riches was not lost on investors in the oil and gas sector. In fact, companies in the oil and gas sector are jumping on board the Dangote Train. One of the companies involved in the project is Cogent Power, a corporation that is pursuing the development of natural gas. Other potential investors in this potential boom include Royal Dutch Shell, the world’s largest publicly traded oil and gas company.
The government of the Dominican Republic is behind the idea of the Dangote, and is funding the effort with oil royalties. The reservoir is located beneath the Caribbean Sea, and the reservoir is being developed in partnership with Conoco, one of the largest oil companies in the world. The plan is to use the Dangote to help extract more oil and gas from under the ocean floor. According to the Energy Post, the lifting of the ban on the practice of drilling in the reservoir was expected to open up about four thousand kilometers of previously inaccessible oil deposits. It has been reported that the lifting of the ban could boost the production of the Dangote by as much as twenty percent. If this economic diversification with the assistance of a maiden clinker is able to boost the productivity of the Dangote then it will provide an important boost to the Dominican Republic’s gross domestic product.
There has been much criticism of the Dominican Republic’s approach to using oil and gas leases as an economic tool. Many people have criticized the lack of consideration for the impact on the environment and the possibility of rising food prices as a result of the drilling and extraction. There is also concern that the move to lift the ban on the Dangote may open new legal avenues for oil and gas companies to explore for more oil and gas in the ocean. As per the United Nations, in the past the Dominican Republic has been one of the most reluctant countries in which to conduct exploration for hydrocarbons. However, it has now become apparent that the lifting of the ban on the Dangote may pave way for greater diversification of the country’s energy resources.
Many people believe that the move to develop the Dangote will help the Dominican Republic gain much needed momentum in its effort to diversify its energy resources. On the other hand, critics of the island nation’s plan to open the Dangote to oil and gas exploration will argue that the move will create another energy security issue in the region. It is also expected that the lifting of the ban on the Dangote will hinder efforts being made by environmental groups to protect the marine habitat of the island. However, in the view of the experts, the benefits that can be derived from the opening of the Dangote to oil and gas exploration outweigh the negative impacts.