Are We an Oil-Rich Nation?

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December 02, 2020

BPC, with oil production interests in Trinidad and Tobago and other licences in South America, has an obligation to The Government of The Bahamas to drill an exploration well by the end of June 2021. In terms of the work undertaken in preparation for drilling, BPC has been in The Bahamas preparing for this activity for 10 years, and has spent more than $110 million.

In February 2020 the Government of The Bahamas granted BPC an Environmental Authority (EA) to drill this single exploratory oil well in Bahamian territorial waters adjacent to the Bahamian/Cuban maritime border was issued. Whilst planning work has been ongoing for many years, the actual drilling is scheduled to commence in late December 2020. However, a coalition of environmental interests has engaged a local lawyer and is threatening legal action with a view to halting BPC’s proposed activity as approved by the Government. 

Commenting, Simon Potter, BPC CEO, said: “The Bahamian Government is exercising its legitimate, sovereign right to find out if The Bahamas has its own hydrocarbon - oil - resource, which we believe could be substantial. Now more than ever, with the islands facing economic fragility, suffering from both the aftermaths of hurricane damage and the impacts of Covid-19, a successful discovery has the potential to boost government revenues by billions of dollars in royalties, and allow for the creation of new contracts and jobs.”

“Based upon our extensive interactions with communities throughout the islands over many years, we believe there is a silent multitude of Bahamians who are in favour of knowing the outcome of our 45-60 day fact-finding exercise – named Perseverance #1.. But as we have stated time and again oil will not actually be produced from this exploratory drilling activity. Once scientific tests establish if oil is present, the well will be permanently sealed. We firmly believe that the people of The Bahamas have a right to know if this resource exists, which could deliver considerable wealth for not only this generation of Bahamians but for future generations to come.”

Mr. Potter noted that many other nations in the region such as Mexico, Trinidad and Tobago, Suriname and Guyana, have over the past decades safely and responsibly drilled offshore wells, developed offshore hydrocarbon resources, and reaped the economic benefits. Moreover, these other nations have been able to do so in parallel with growing and developing existing industry sectors, such as tourism and fisheries. There is no reason to believe why Bahamians cannot do the same.

“The Government of The Bahamas, in seeking to responsibly develop a new revenue stream, has implemented strict laws and regulations to govern petroleum industry operations and ought to be commended for both their commitment to ensuring the wellbeing of the people of The Bahamas as well as ensuring rigorous attention to environmental compliance.

They have done so by introducing an upgraded, modernised and strengthened Petroleum Act and associated Petroleum Operations, Health and Safety and Environmental Protection related Regulations. Consistent with this approach BPC’s planned activities have been subjected to a thorough, comprehensive process of review and scrutiny over many years by many scientists and experts in their individual fields.

In gaining Environmental Authorisation, BPC was required to demonstrate compliance with all applicable Bahamian laws – as a drill ship, this included all maritime requirements, like any other vessel operating in Bahamian waters. Over and above this the project had to demonstrate it adhered to all applicable guidelines, international standards and best practices as demanded by the legislation of the Bahamian Government.”

Despite this comprehensive process of review and scrutiny, local Bahamian lawyer Mr. Fred Smith QC, has sent a letter to the Government accusing it, the Government, of acting improperly in providing the necessary permits to enable BPC to find out once-and-for-all if The Bahamas is an oil-rich nation. Despite BPC’s authorisation having been granted by The Government in February 2020, Mr. Smith is only now demanding a cancellation of BPC’s authorisation to proceed with the exploratory drilling exercise it is obliged to carry out under that authorisation.

However, BPC considers the characterisation of the environmental risks put forward by Mr. Smith to be significantly exaggerated, inaccurate in many parts, and ill-informed of the extreme precautionary environmental preparedness and the science and technical expertise that is the foundation of modern-day oil exploration.

Indeed, BPC notes that it is precisely because of these extreme precautionary environmental measures that in the past 10 years, over 10,000 offshore oil wells have been drilled safely and without incident all around the world. This includes in Cuba, in other parts of the Caribbean, and in other areas with extensive tourism and fishing industries, such as the Mediterranean.

Many of Mr. Smith’s assertions do not appear to stand up under scrutiny of both the facts, nor the extensive body of work undertaken by BPC over more than a decade to prepare for this activity, during which process BPC and the Government were assisted by a large number of globally renowned environmental scientists, consultants and environmental service companies.

In terms of the facts, the drilling site is located in the far-southern waters of The Bahamas, in an international shipping thoroughfare which already hosts considerable daily shipping traffic, including numerous oil tankers. The well site is more than 90 miles from the nearest inhabited Bahamian island (Andros), and approximately 270 miles from Nassau. The well site is not in a marine protected area, and is remote from regular Bahamian fishing and tourism industries.

According to BPC’s lead Environmental Scientist, Ms. Roberta Quant, a Bahamian with a Master’s Degree in Environmental Science and more than 17 years’ experience in the environmental field: “The well location is in an existing international shipping lane, the Old Bahama Channel, which already typically sees three million barrels (over 120 million gallons) a day of oil pass through it, and which is only likely to increase with the expansion of the Panama Canal and with access to the deep-water port at Grand Bahama. Furthermore, there is already considerable ongoing oil production activity and associated refining and terminal capacity in the area. Indeed, it is worth noting that oil drilling already occurs safely in Cuba - as close to the drilling location as the island of Andros.” 

Ms. Roberta Quant, went on to add: “BPC’s submission to the BEST Commission for approval to proceed with Perseverance #1 exceeded all local Bahamian requirements, and was prepared in accordance with national and international industry best practices. We systematically identified, addressed and documented a comprehensive list of environmental concerns relevant to the proposed exploration activities.

Throughout the process we engaged multiple international environmental science and safety consultants, as well as some of the world’s largest and most respected oil field services companies including Halliburton, Baker Hughes, GM and Schlumberger. The drill ship that will drill Perseverance #1 is one of the most modern and impressive worldwide, with many sophisticated integrated safety systems.”

“BPC initially submitted its documentation to the Ministry for review and consideration by the BEST Commission on behalf of The Government as far back as 2012.

This documentation, upgraded and improved many times, specifically addressed matters relevant to a detailed description of the Company’s proposed well activities, with comprehensive information associated with risk mitigation equipment, processes and systems and associated incident emergency response plans.

Unique in The Bahamas, detailed Environmental Sensitivity and Index Maps were submitted and made available, along with associated software, to a number of Bahamian institutions. As further protection and understanding, a comprehensive baseline environmental survey of the precise drilling location was undertaken along with a sophisticated multibeam survey examination of the seabed.

Multiple videos document the condition of the seabed, and a broad range of water and sediment samples have been collected and analysed to bear comparison to any future survey. Observations have also been taken of marine, mammalian and bird life in the area.

In total, the considerable body of work required to secure Environmental Authorisation amounted to a total of approximately 5 full-time ‘man-years’, and the expenditure of millions of dollars”.

“It is worth noting that all of our documentation was reviewed by multiple external parties, including in particular by a leading international environmental consultant firm hired by and working exclusively for The Government.

It was only after their sign-off was obtained that the EA was granted. And I’d point out that BPC’s documentation is publicly available for review by anyone – the Environmental Impact Assessment study, for example, has been available online since 2012, open to scrutiny and comment by all.

Although to my knowledge, in all that time, those who purport to represent environmental interests who now seem so concerned with our planned activities have never raised any queries or comments, despite having had ample and continuous opportunity to do so.”

BPC is a Caribbean and Atlantic margin focused oil and gas company, with a range of exploration, appraisal, development and production assets and licences, located offshore in the waters of The Bahamas and Uruguay, and onshore in Trinidad and Tobago, and Suriname. BPC is currently on-track for drilling an initial exploration well in The Bahamas, Perseverance #1, in late 2020 / early 2021, with the well targeting recoverable P50 prospective oil resources of 0.77 billion barrels, with an upside of 1.44 billion barrels. In Trinidad and Tobago, BPC has five producing fields, two appraisal / development projects and a prospective exploration portfolio in the South West Peninsula. BPC's exploration licence in Uruguay is highly prospective, with a potential resource of 1 billion barrels of oil equivalent. In Suriname, BPC has an onshore appraisal / development project.

BPC is listed on the AIM market of the London Stock Exchange and trades as part of a Mutual Fund listed on The Bahamas International Stock Exchange.

News date : 12/02/2020    Category : About Bahamians, Business, Press Releases

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