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CEO lashes out at environmental groups over BPC license renewals

Wed, May 19th 2021, 08:22 AM
Environment Public Works/Infrastructure Nassau Guardian Stories

Following calls from local and international environmental groups urging the government to deny Bahamas Petroleum Company’s (BPC) license renewals, its outgoing Chief Executive Officer Simon Potter lashed out at what he called spurious and unsolicited legal advice to the Bahamas government.

After failing at finding commercial quantities of oil after drilling its Perseverance #1 well, BPC announced in March that it applied to extend its four southern licenses for an additional three-year “drill or drop” exploration period, much to the chagrin of environmentalists who were unsuccessful at stopping the first drilling.
Potter in a statement yesterday asserted that the environmentalists’ push for the government not to extend the licenses calls into question the integrity of agreements between The Bahamas and investment companies.
“The licensing regime in The Bahamas is no different to that in place in many other advanced economies, a core component being the notion that energy companies agree to assume considerable financial risk, whilst host governments do not, in the clear expectation that license rights, once granted, will be respected,” he said.
“If this were not the case, if the integrity of agreements could not be relied upon, then companies would never invest such huge volumes of capital, let alone explore for resources to enrich a nation’s economy, with a resource that takes decades to create a return on that company’s investment. It is entirely spurious for foreign environmental groups to offer unsolicited ‘legal advice’ on a matter of which they have no background, no knowledge, no insight and certainly no experience or expertise.”
His comments came after environmental group Earthjustice, a US-based non-profit environmental law organization, stated that the government could use its complete discretion and authority to deny BPC’s four southern licenses for oil exploration, noting that it would be consistent with its economic, environmental and ethical commitments to protect the marine resources of The Bahamas.
“Environmentalists have repeatedly complained that the confidential license documents between BPC and the government of The Bahamas have never been published. Now these same environmentalists appear able to comment in detail on their contents and their applicability. Well, which is it?” he said.
“The simple fact is that the government of The Bahamas awarded hydrocarbon exploration licenses to BPC in 2007. Since that time, those licenses have been extended and renewed on various occasions by administrations of each political persuasion, in accordance with their terms, in reliance of which BPC has expended over $150 million in safe and responsible activities honoring its obligations under those licenses.”
The Minnis administration has said it is against oil drilling in The Bahamas, however no government official has commented on whether it will approve of BPC’s application to renew its licenses.
Last month BPC announced an overhaul of the company, including a restructuring of its board, a new CEO and a change in its name to Challenger Energy Group Plc.

After failing at finding commercial quantities of oil after drilling its Perseverance #1 well, BPC announced in March that it applied to extend its four southern licenses for an additional three-year “drill or drop” exploration period, much to the chagrin of environmentalists who were unsuccessful at stopping the first drilling.

Potter in a statement yesterday asserted that the environmentalists’ push for the government not to extend the licenses calls into question the integrity of agreements between The Bahamas and investment companies.

“The licensing regime in The Bahamas is no different to that in place in many other advanced economies, a core component being the notion that energy companies agree to assume considerable financial risk, whilst host governments do not, in the clear expectation that license rights, once granted, will be respected,” he said.

“If this were not the case, if the integrity of agreements could not be relied upon, then companies would never invest such huge volumes of capital, let alone explore for resources to enrich a nation’s economy, with a resource that takes decades to create a return on that company’s investment. It is entirely spurious for foreign environmental groups to offer unsolicited ‘legal advice’ on a matter of which they have no background, no knowledge, no insight and certainly no experience or expertise.”

His comments came after environmental group Earthjustice, a US-based non-profit environmental law organization, stated that the government could use its complete discretion and authority to deny BPC’s four southern licenses for oil exploration, noting that it would be consistent with its economic, environmental and ethical commitments to protect the marine resources of The Bahamas.

“Environmentalists have repeatedly complained that the confidential license documents between BPC and the government of The Bahamas have never been published. Now these same environmentalists appear able to comment in detail on their contents and their applicability. Well, which is it?” he said.

“The simple fact is that the government of The Bahamas awarded hydrocarbon exploration licenses to BPC in 2007. Since that time, those licenses have been extended and renewed on various occasions by administrations of each political persuasion, in accordance with their terms, in reliance of which BPC has expended over $150 million in safe and responsible activities honoring its obligations under those licenses.”

The Minnis administration has said it is against oil drilling in The Bahamas, however no government official has commented on whether it will approve of BPC’s application to renew its licenses.

Last month BPC announced an overhaul of the company, including a restructuring of its board, a new CEO and a change in its name to Challenger Energy Group Plc.

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