The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Petroleum Company (BPC) is planning to use Grand Bahama’s industrial and logistics abilities to support its oil exploration activities, its chief executive describing the island as an “under-utilised little gem”.

Simon Potter told Tribune Business that when BPC spuds its first exploratory well some 80 miles from Andros, either in late 2014 or early 2015, it made sense to have manufacturing, repair and storage support in close proximity.

Facilities such as the Grand Bahama Shipyard provide what BPC is looking for, and Mr Potter said of Grand Bahama: “That’s a little gem, and I don’t think anyone appreciates what you have in Grand Bahama.

“We will certainly use that as a lay down area, and for manufacturing. There is nothing that cannot be made there.”

Extolling Grand Bahama’s virtues as a repair and equipment storage hub, Mr Potter told this newspaper: “Given where we are, we’d rather have equipment half a day’s steam from our facility rather than one to two days.

“Grand Bahama is a fantastic facility and probably under-utilised. We will have no problem laying down equipment there, having it manufactured there and servicing the rigs.

“It’s [Grand Bahama] operated to international standards. It’s what you’d find in Aberdeen, New Orleans... It’s impressive, from what I have seen, and reliability is international quality.”

Thus BPC’s activities appear set to generate considerable spin-off economic benefits for Grand Bahama’s industrial economy, potentially providing a much-needed boost to the island come 2015.

BPC’s obligation, under the terms of its licence renewal with the Government, is to spud an exploratory well by April 2015 - a deadline Mr Potter remains confident of meeting.

Suggesting that early 2015, as opposed to late 2014, was the likely drilling timeline given the need to avoid hurricane season, he told Tribune Business: “I’m confident we’re on that trajectory. We’re on a trajectory to meet and exceed that.

“From an exploration standpoint, I’m wholly satisfied. There are obvious technical uncertainties, but they have been run to ground as best they possibly can.

“In terms of technical preparedness, we would certainly like to see the regulations, and wholly support the Government in the preparation of those.”

Mr Potter said BPC had invested nearly $80 million into its Bahamas oil exploration activities, with some $35 million of that sum spent on its seismic data surveys of the ocean bed under Bahamian waters and the prevailing rock structure.

Noting that the Government had committed to releasing the revised oil drilling regulations, and accompanying regulations, prior to Christmas, Mr Potter reiterated that BPC’s Environmental Impact Assessment (EIA) and associated management plan had been completed to post-Gulf of Mexico spill standards and prevailing international standards.

Apart from awaiting the regulations, BPC’s other priority - besides preparing for the technical aspects of well drilling - has been to find a partner to mitigate the risk associated with that, especially from a financial standpoint.

“We’re talking to a lot of companies who are still very interested in the technical case,” Mr Potter told Tribune Business. “We’ve been pretty busy.”

He gave no indication of when BPC was likely to find a ‘farm in’ partner, although it seems unlikely that a deal will be concluded before year-end.

The Government’s renewal of BPC’s licence earlier this year, coupled with the revised target date for drilling an exploratory well, have given the company’s negotiations with potential drill partners an added impetus, plus increased its negotiating leverage.

“In the background we’re doing a lot of test work, which is really refining our understanding of the rock, the petroleum system and the reservoirs present,” Mr Potter added. “It just reinforces that the prospects are valid and very large.

“I wouldn’t be here if I wasn’t confident [of striking oil]. That applies to my belief in the project. I was around in 2005 when the company was set up, and when it was a twinkle in an explorer’s eye.

“We know there’s oil in the system here, in Cuba we know the structures exist, and we know the components of the wells drilled next door. The only missing component here is: Are the full of oil to commercial quantities?”