The Tribune

An FNM MP yesterday slammed the Government’s failure to provide the Opposition with the 12 amendments to the Petroleum Bill before yesterday’s debate, saying: “It’s ridiculous the Government was so ill-prepared”.

Loretta Butler-Turner, the Long Island MP, told Tribune Business that the Government agreed to cut the House of Assembly debate short after she raised concerns about being ‘blindsided’ by the revised Bill.

While both Prime Minister Perry Christie and Dr Bernard Nottage, leader of government business in the House, were “amenable” to delaying further debate on the Bill until next Tuesday, Mrs Butler-Turner questioned why it could not provide the Opposition with the amendments despite having six months to do so.

“It’s ridiculous. There were so many amendments it was like an entirely different Bill,” she told Tribune Business. “I complained that the Bill is changing before our eyes without giving us a chance to digest this.

“You [the Government] did not have the foresight to let us see this document before this morning.... I thought that the Government was ill-prepared. They had sufficient time to disseminate the information, and we’ve lost another day.”

Mrs Butler-Turner said the arguments to be put forward by Opposition MPs were all “predicated” on the Petroleum Bill’s first draft, but the one described by Kenred Dorsett, minister of the environment and housing, contained 12 “major” amendments.

The Petroleum Bill is a potentially key piece of legislation, as it establishes the legal basis for oil exploration in Bahamian waters, plus a regulatory framework that will govern the wider oil/energy industry.

Mrs Butler-Turner said the amendments included changes to how ‘discovery’ was defined, plus the calculation of royalties due to the Government (Bahamian people) and the financial security for personal injury, damage to property and the environment.

Mr Dorsett, unveiling the revised Bill yesterday, said the fiscal regime determining the Government’s share of oil exploration revenues/profits had been amended to ensure its share increased as the latter rose.

Mr Dorsett said the Government would receive a minimum 12.5 per cent, up to a maximum 75 per cent, of any profits and give the Bahamas “a greater benefit should oil be found in commercially viable quantities and produced” in this nation.

Mr Dorsett said the Commonwealth Secretariat’s economic and legal section (ELS) had suggested that the previous regime, which capped the Government’s earnings at a maximum 25 per cent, gave the Bahamas “a relatively low level” of earnings from oil exploration.

While the sliding scale royalty regime is being retained, the ELS recommended that a Resource Rent Tax (RRT) be included “to capture economic rent in cases of high profitability of a petroleum project”.

It also suggested a ‘ceiling’ be imposed on the deductions an oil explorer could apply in calculating cost recovery and profitability.

The ELS said the Government should “set an annual cost recovery limit at 75 per cent of post-royalty production for oil, and 100 per cent for natural gas”.

Mr Dorsett said: “This regime is a great balance, ensuring that both the Government and the investor receives a fair share of the revenues generated from the petroleum industry of the Bahamas.”

Mrs Butler-Turner told Tribune Business that the Government appeared to be “a lot more cautious” in its approach to the Bill and oil exploration, having sought the Commonwealth Secretariat’s extensive advice and cleared up the maritime boundaries with Cuba.

Mr Dorsett, meanwhile, said the Government was set to amendment the provision for royalties in the Bill was being amended, as the original draft “may provoke an interpretation that the Bill does not provide a transparent methodology for the valuation of petroleum”.

Acknowledging that oil exploration was a controversial issue, he added: “This administration sees it for what it is, an incredible opportunity, which has been taking place since 1947, and which if successful would change the economy of the Bahamas for the better.

“This is just another attempt by this administration to leave no stone unturned in our search for ways and means to improve the economic state of this country.”

Mr Dorsett emphasised that the Petroleum Bill would not cut across the Government’s pledge to hold a referendum, which would allow the Bahamian people to decide whether to permit oil exploration in Bahamian waters.

Instead, it would facilitate exploration to determine whether there were significant quantities of commercial oil that can be extracted - thus providing the basis for any referendum.

“We cannot continue to argue based on ‘what if’s’,” Mr Dorsett said. “The question of whether or not oil resides in the waters of the Bahamas in commercially viable quantities must be answered. We must know what resources we have and what we need to protect.”