By NATARIO McKENZIE
Tribune Business Reporter
The deputy prime minister yesterday said the government has been “locked into” various oil exploration obligations by its predecessor as he acknowledged environmentalists’ concerns.
Speaking at the Royal Fidelity Bahamas Economic Outlook, KP Turnquest said: “There are obligations that the previous administration has locked us into. We understand the concerns of the environmentalists. We will do all that we can to ensure that we put in place the protective mechanisms if, in fact, they [Bahamas Petroleum Company] do drill.”
Mr Turnquest did not specify which “obligations” he was referring to, although the former Christie administration had deferred staging a voter referendum on whether to permit oil drilling activities within Bahamian waters until it was determined whether commercial quantities - which are extractable - actually exist.
The deputy prime minister’s comments came after Sam Duncombe, reEarth’s president, recently accused the government of being “duplicitous” for extending oil exploration licences at the same time it is promoting renewable energy use.
She told Tribune Business she was “more than irritated” after the Minnis administration extended Bahamas Petroleum Company’s (BPC) four oil exploration licences until year-end 2020. She urged the government to “get serious” about the environment and renewable energy, and said: “It was a bit of a shock to see that in the papers to be quite honest. We had been told that there would be absolutely no oil drilling.”
The extension confirmation effectively gives BPC a clear two-year window in which to complete everything required for the drilling of a first exploratory well in waters south-west of Andros, near the maritime border with Cuba.
It provides BPC and any joint venture partner - especially in a business reliant on government regulation and approvals - with the certainty and clarity they crave to proceed with their plans, knowing that the “rules of the game” have now been set.
BPC and the government must also work together to develop a two-year “road map”, or work schedule, setting out how all technical and environmental issues likely to be encountered on the way to that first exploratory well will be dealt with.
This includes BPC obtaining all required “environmental authorisations”. And both parties must also work together to “reconcile” the licence fees paid by BPC to-date, including during the “period of disruption”, with those sums that will be owing to the government during the upcoming period to end-2020.
The “period of disruption” refers to the time when BPC’s progress was essentially halted as it waited for the former Christie administration to pass legislation to strengthen the regulatory and environmental protection regimes for oil exploration - an objective that was eventually accomplished.
BPC is now working on two parallel tracks and objectives - securing a joint venture partner to share the financial and technical burden of that first exploratory well, while also obtaining all the necessary environmental approvals from the government under a process it triggered last April. The licence extension now gives it a clear timeframe in which to complete these goals.