By NEIL HARTNELL
Tribune Business Editor
A prominent QC yesterday blasted suggestions by Bahamas Petroleum Company (BPC) shareholders that opposition to the company’s oil prospecting was driven by “malice”.
Fred Smith QC, the Callenders & Co attorney and partner, who is representing the Our Islands, Our Future coalition in potentially imminent legal action to halt BPC’s planned exploratory drilling, told Tribune Business that environmental activists are “purely motivated to protect the pristine environment of The Bahamas”.
Describing this as simply good business sense, given that it is The Bahamas’ marine and land environment that brought 7.2m visitors to the country prior to COVID-19, Mr Smith argued that these were the true natural resources representing the country’s “gold that glistens all the way into the galaxy”.
He hit out after several nervous BPC shareholders, concerned about the threat of a Judicial Review action that could be filed as early as next week, contacted Tribune Business to voice misgivings about the motives and intentions driving oil exploration opponents.
One investor, requesting anonymity and describing himself as “just an ordinary shareholder”, urged Bahamians in a letter written to this newspaper not to “let a few thousand persons, some with no connection whatsoever to your beautiful islands, trick you” into blocking BPC’s plans and the potential financial windfall that may result IF commercial quantities of oil are discovered. While acknowledging the need for Bahamians to debate the merits oil exploration, they added that they “cannot help but question a few of the opinions expressed” about BPC’s plans to spud an exploratory well in waters some 90 miles west of Andros near the maritime boundary with Cuba.
Suggesting that political, rather than environmental concerns, may be driving opposition, the shareholder questioned: “How many of the influencers and financial backers of the campaigns to stop exploratory drilling and, eventually, production, are connected to The Bahamas?
“Do they have conflicts of interest? Are they attempting to delay the drill or financially hurt BPC and its shareholder for personal gain? Based on the timing [of the threatened legal action], is there malice involved? And for those vocal objectors who are Bahamian, is it really about the environment or merely a conduit for political protest?”
The shareholder, whose identity is known to this newspaper but has asked for it to be withheld, also questioned the relevance of debating the environmental concerns now given that commercial quantities of oil beneath the Bahamian seabed have yet to be confirmed.
Suggesting that this was a discussion to be held if BPC’s exploratory wells were successful, they echoed the arguments of James Smith, the company’s Bahamian non-executive director, about this nation already being in the oil industry due to the presence of tankers in its shipping lanes and storage farms such as those at Buckeye Bahamas (BORCO) and South Riding Point.
“Why all this fuss by a few who misleadingly try and give the impression of being the many?” the shareholder asked. “Let common sense prevail rather than using it as an excuse for political grievances, stoked by persons who may have conflicts of interest.
“My family and I have been to The Bahamas and witnessed its lovely people. A people with the dire misfortune of having to deal with a terrible hurricane and pandemic. Do not let a few thousand persons, some with no connection whatsoever to your beautiful islands, trick you.”
The Our Islands, Our Future coalition is likely to immediately challenge whether the 40,000-plus people who signed its petition opposing oil drilling, and the multiple companies, individuals and non-profits - both Bahamian and international - backing its efforts represent a “few thousand persons”.
Mr Smith, meanwhile, pushed back hard, describing claims of “conflicts of interest”, and the involvement of “malice” and political motivations, as ludicrous. “The Coalition is not motivated to hurt BPC financially,” he told Tribune Business. “The Coalition is purely motivated to protect the pristine environment of The Bahamas.”
Arguing that even the largest global energy giants were slowly moving away fossil fuels and towards renewable energy, Mr Smith questioned why The Bahamas would take the reverse course. “The Government, under this administration, has committed to a green and blue economy,” he said.
“It thus baffles me how this administration continues to approve the exploration of oil by BPC in light of the international commitments that it has made to the Paris Accord on Climate Change. We are a small island state, and like many of the small Pacific island states and elsewhere, will disappear if the seas continue to rise because of global warming.
“Before we disappear we will fight to the last grain of sand, the sands above the water line in The Bahamas, to preserve the very existence of The Bahamas. Oil is not the future. It is a step backwards. It is pure insanity.”
Mr Smith, adding that Parliament has “spoken very loudly for the protection of the environment” by recently passing the Environmental Planning and Protection Act into law, said: “All we are doing in the Coalition is asking the judiciary to support the legislature in protecting our environment.
“We are urging the judiciary to step in, take control of the executive, and prevent it from over-reaching. Our objective is to stop the destruction of our beautiful, pristine nature. There are no conflicts of interest. We have no malice towards BPC. We have malice towards any activity that destroys our environment.
“This is why the 7.2m people came here in 2019 prior to COVID-19 to enjoy the sun, the sand and the absolutely crystal blue sea we have. That is our gold; the beaches of The Bahamas are the gold that glistens all the way into the galaxy,” the outspoken QC continued.
“The Coalition is composed of domestic and international environmentalists who have decades and decades of commitment to protecting the environment. I don’t know what they’re talking about.... conflict of interest. As to political protest, of course this is a political protest. We are protesting the executive branch of government flying in the face of the legislative branch which is mandated to protect the environment.”
The basis of the Our Islands, Our Future coalition’s legal challenge is that the Government failed to follow the process set out in law for approving BPC’s project amid an absence of consultation with impacted stakeholders.
BPC, though, argues that it has complied with all environmental permitting processes in obtaining the Environmental Authorisation (EAO), and approval for its Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP). It says it has complied with all Bahamian and international regulatory standards in doing so.
The oil driller’s shareholder, meanwhile, touted the economic benefits to The Bahamas as well as investors if commercial quantities of oil are struck. “It is simply not true to imply foreigners have somehow ‘tricked’ and taken advantage of the Bahamian people,” they argued.
“The Bahamas is not a modern day African or South American colony taken advantage of by European powers, as was the case between the 16th to 19th centuries. BPC has shareholders internationally, some Bahamian, mostly private investors.
“More than $100m of our money has been invested with the hope we can profit. Today, each BPC share is approximately 4 cents. If commercial quantities of oil are found, analysts believe it will skyrocket to over 40 cents. If none is found, the share price will plummet.”
The shareholder added that all Bahamians will benefit if BPC is successful via the per barrel royalties that will be paid to the Government, comparing this to Norway’s multi-billion sovereign wealth fund.
While BPC’s chief executive, Simon Potter, has said the Government could enjoy a $5bn windfall over the project’s 10 to 20-year lifetime if oil is hit, Mr Smith argued that such comparisons were misleading.
“Regrettably, The Bahamas continues to be steeped in a plantation economic mindset where often the executive gets mesmerised by the glitzy baubles that developers present to the Government,” he told Tribune Business.
“Hopefully this administration will see the light of environmental protection and do the decent thing, and cancel BPC’s licences as they are entitled to do. This activity flies in the face of the Environmental Planning and Protection Act, which is the single greatest achievement of this administration.
“The Bahamas, while we have wonderful laws that protect the environment, regrettably the human and financial resources of our government and its agencies are painfully limited. Our inability to regulate development is reflected by the many carcasses of failed projects which have devastated the land and marine environment in The Bahamas,” Mr Smith continued.
“Let this not be one more devastating disaster that befalls our beautiful Bahamas.”
The BPC shareholder, meanwhile, voiced concern about the company’s failure to-date to update the markets on the potential risk of legal action that could halt drilling of the company’s Perseverance One well just days before the December 15 start.
“Hopefully, BPC covered all the bases to face this legal challenge. Most of the shareholders are worried about any delays to the drilling. We are still waiting to hear from BPC to update the shareholders,” they added.
BPC’s share price on London’s Alternative Investment Market (AIM) also appears to have been impacted by the Our Islands, Our Future move. Having hit close to its six-month high of around 3.5 UK pence around the time of its last Bahamas well update, the share price subsequently dropped to 2.7 pence after the threatened legal action was revealed although it has now recovered to 2.90 pence.