The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Wall Street will “immediately revise” its opinion on the Bahamian economy’s prospects and fiscal outlook if commercial quantities of oil are discovered in this nation, a local environmental expert believes.

Former College of the Bahamas (COB) lecturer, Neil Sealey, told Tribune Business that the prospects for oil discovery in the Bahamas were good, with many of the necessary conditions either proven or probable. In what appeared to be a tacit endorsement of permitting oil exploration in the Bahamas, Mr Sealey said the Bahamas stood to cash in immediately once a successful discovery was made, as its net worth would increase immediately. He also echoed many of the arguments advanced by the Bahamas Petroleum Company (BPC), which is seeking government approvals to conduct exploratory well testing near the maritime boundary with Cuba.

Speaking with Tribune Business following a presentation on oil at the Bahamas National Trust, Mr Sealey said:”I would say the prospect for oil discovery here is good because so many of the known factors that we require are either proven or probable.

“People think there is oil here. There is certainly oil in the rocks. The oil has been formed in the rocks and passed through the rocks. It’s a question of seeing whether the oil has been trapped somewhere which forms an oil field that we can extract oil from.

“The current thinking is that the most likely place is just north of Cuba in the structures that the Bahamas Petroleum Company have identified down there. You might find something in the next few years, who knows? It might be 50 years. Deep water drilling is very expensive.”

Mr Sealey added that there were some comparisons to be made to Brazil’s offshore oil discovery and the potential for the same here.

“I looked at the pattern and the depth at which they had found the oil, and the fact that they had done it quite recently,” Mr Sealey said.

“The oil source rocks that we have are probably around 20,000 feet or deeper, and that’s the same depth they have off Brazil in the same depth of water. At the same time they looked there because they found bands of salt from their seismic surveys, the same way Bahamas Petroleum found bands of salt, and some of the earlier bore holes that were drilled.

“There are a lot of similarities, although the geological structure is quite different and it’s a totally different part of the world.” Mr Sealey said a potential oil discovery would immediately increase this country’s net worth. “The impact here would be royalties,” he added. “We would benefit from it immensely in cash. As soon as it’s discovered, our net worth goes up. Moody’s would revise their opinion of us, no question. It doesn’t mater that we are not producing it initially.”

Addressing environmental concerns, Mr Sealey said: “You look at the good and the bad. Anywhere you have oil you are going to have spills and some damage. It’s not usually as bad as you think. It’s bad at the time, but it does go away.

“It’s a long way from the most populated part of the Bahamas, and it’s a long way from the most populated areas of the Bahamas - probably about as far away you can get while still being in the Bahamas.

“It’s close to Cuba, and also the currents are more likely to take it into the Gulfstream, and there is a very rapid decay factor. The likely direct impact on tourist beaches is likely to be very small.

“You have to bear in mind, however, that if you have a tanker with 100,000 tons of oil coming up through the northern Bahamas, or a tanker taking it to Freeport, and it hits Great Isaac Rocks, the spill is going to be right on our doorstep. Obviously there would be more movement of oil around the Bahamas because we are producing oil here. We already have oil passing through here. We could have a 300,000 ton tanker spill oil tomorrow.”