The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian people will determine the fate of any commercial oil discovery in this nation's waters, a Cabinet minister pledged yesterday, adding that the country is at "a crossroads" over the issue.

Romauld Ferreira, minister of the environment and housing, told Tribune Business that The Bahamas had reached the stage where it "needs to know" if the Bahamas Petroleum Company's (BPC) decade-plus exploration work will translate into the discovery of commercial oil fields below the nation's seabed.

Emphasising that BPC's first well is exploratory, and no discovery has been confirmed, Mr Ferreira did not commit to holding a referendum on oil drilling in Bahamian waters should the company prove successful.

The former Christie administration had promised to hold such an exercise in the event of a commercial discovery so that the Bahamian people could decide whether to pursue oil exploration in Bahamian waters, but Mr Ferreira yesterday argued there were "many routes" through which the electorate can express their will.

Pledging that any find would be immediately disclosed to the Bahamian people, the minister said the Minnis administration will "take our instructions from them" on how to proceed should BPC strike "black gold".

"The exploratory well that is being contemplated will determine if oil is there," Mr Ferreira told Tribune Business. "Right now, according to the science, we can narrow it down to a 35-40 percent possibility, but at some point you have to drill a well. We are at that point.

"The relationship we have with the BPC organisation was in train when we came to office. This is not something new; it's a continuing obligation that we met and it has tremendous implications. The big rub is: Do we ignore the fact we have oil here, and do we - or do we not - explore for it?

"The other big issue that comes to a head if oil is found is do we proceed to commercial exploration and drilling, and what happens to that money? Does it go into the sovereign wealth fund? We essentially have the country at a crossroads, but I hasten to add that no oil has been found," the minister continued.

"This government is committed to full transparency, and if oil is discovered we'll disclose it to the Bahamian people and take our instructions from them as to the way forward."

The last Christie administration promised to stage a referendum on whether to approve commercial oil exploration within The Bahamas' waters should BPC prove successful, but matters never reached this stage before it was voted out of office in May 2017.

Mr Ferreira was cool towards staging a referendum, telling Tribune Business that there were other methods for determining "the will of the Bahamian people". He added: "I am stressing that oil has not been found yet, so it's a little cart before the horse. We remain cautiously optimistic.

"There are other ways to gauge the will of the Bahamian people. A referendum is one of many tracks. One thing that is assured is that we will engage the Bahamian people on the way forward."

Describing the Bahamian people "as a mosaic" of multiple different views and interests, Mr Ferreira said he respected environmentalists' opposition to any type of oil exploration in this country's waters.

"I think Bahamians are excited that this is a whole new industry; most Bahamians I meet are," he added. "Oil is a very emotive issue. There are some Bahamians resolutely opposed to oil, and I respect that position, but like most governments we strive for the utilitarian approach, which is to do the greatest good for the greatest number. Everything has to be looked at holistically to make the correct determination."

BPC is aiming to drill its first exploratory well by end-April 2020 in waters some 100 miles south-west of Andros, and close to the maritime boundary with Cuba. Mr Ferreira's ministry paved the way for the explorer to proceed by recently approving its Environmental Authorisation.

Pointing out that commercial oil discovery will create an entirely new industry for The Bahamas, and a new natural resource, together with a significant revenue stream for the Government, the minister reiterated that the country faces a choice between ignoring the possibilities or finding out if the potential exists.

"We are essentially tourism, financial services and fisheries," Mr Ferreira told Tribune Business. "The country needs another industry. We have to make a decision. Are we going to find out if it exists in commercial quantities? The real fundamental issue at play here is: Do we have oil? That is the $1bn question everyone wants answered. We have to drill a well to make a final determination."

BPC's first exploratory well, named Perseverance No.1, is targeting a sub-sea structure in which up to 800m barrels of oil could be held based on seismic testing and other geological studies.

If the presence of oil is proven at that location, the oil explorer believes close to 2bn barrels would likely be present in a surrounding field that stretches for 80 kilometres, taking the discovery "up to the field size they're finding in Guyana".

Mr Ferreira added that the Government is "not enthusiastic about issuing offshore drilling licenses" such as those possessed by BPC, adding that it was legally mandated to honour them upon taking office. He added that it was more favourable to what he described as the "mixed merits" of onshore oil exploration.