The Tribune

By AVA TURNQUEST

Tribune Chief Reporter

aturnquest@tribunemedia.net

DRILLING for an exploratory oil well is unlikely to start this year, according to Bahamas Petroleum Company (BPC) Chief Executive Officer Simon Potter.

Mr Potter told The Tribune that his company will need a year to plan for the first exploratory well and secure a joint venture partner, a timeline that hinges upon the petroleum legislation tabled in Parliament.

“What the government asked us to do is not undertake any drilling until pending upgrades to the legislation were completed,” he said. “They are now before Parliament, so the end is in sight as it were. We’re anxious to drill as soon as

possible but the reality is once the legislation is passed, it will take us a year to definitively plan and then get on with it.

“The other thing the company makes clear, one of the things it wants to do is seek a partner. After having spent $90 million to date, the next stage for us would be to seek a partner to therefore share the risk and reward going forward.”

BPC has a licence obligation to spud its first exploratory well in April some 80 miles southwest of Andros, near the maritime boundary with Cuba.

The test wells are conditional on the three-year extension granted to BPC’s five oil exploration licences. The licences were extended until 2016, and its terms oblige BPC to start drilling its first well by April 2015.

The Petroleum Bill and the Sovereign Wealth Fund Bill were tabled in the House of Assembly last December, but debate has not begun on the bills.

Last year, Mr Potter told Tribune Business that efforts to secure a joint venture exploration partner had been hindered by increasing “suspicions” over the government’s delay in releasing the new regulatory platform for the sector. He said the promised regulatory regime’s absence remained a “key constraint” to sealing a joint venture partnership.

In January, BPC’s joint-venture partner Statoil decided to exit its interest in three joint license applications after awaiting government approval for almost five years. At the time, Mr Potter told Tribune Business that the decision was no reflection on BPC’s prospects of striking commercial oil quantities in Bahamian waters.

Yesterday, Mr Potter said the company has been active working on various technical projects but cannot contract rigs or organise procurement until there is a definitive legal framework.

“From all of our point of views, we’ve been at this for 10 years now, so once the new regulations are passed it’s not a question of waiting for anything specific, we will then look to get on with it as soon as possible. It’s not something we’ll drag our heels about.

“What defines the ability of a partner to come on is obviously an understanding of what the regulations are and the regime they are operating in. We’ve got lots of people in mind, but one step at a time once regulations are passed.”

Mr Potter added: “I’ve been at this for 10 years now, if I wasn’t optimistic about a discovery I wouldn’t be doing this. Does that offer any guarantees? No, but all of the technical work to investigate the properties of the rocks and the chances of finding oil are encouraging.

“I remain optimistic, the rocks aren’t going anywhere. They’ve been there for millions of years and what we’ll be looking for is commercial discovery of oil.”

In 2013, Environment Minister Ken Dorsett said the government would allow for the drilling of an exploratory oil well to determine if the country has commercially viable oil quantities, ahead of a promised referendum on the issue.