• Oil explorer hints not giving up on Bahamas yet
• Says surge in ‘farm-in’ inquiries after well’s end
• Data obtained invaluable for four other licences
By NEIL HARTNELL
Tribune Business Editor
The Bahamas Petroleum Company (BPC) yesterday alarmed environmental activists by indicating it has not given up on The Bahamas following a surge in interest from potential joint venture partners.
Casuarina McKinney, the Bahamas Reef Environment Educational Foundation (BREEF) executive director, told Tribune Business she was “very concerned” after the oil explorer informed the international capital markets it had received numerous inquiries despite its failure to locate commercial oil quantities with the Perseverance One well.
BPC, in a statement that left the door open to further exploratory oil drilling in its other four Bahamian licence fields, added that the data gleaned from the well dug in waters some 90 miles west of Andros will “more accurately inform and direct” its future plans in this nation.
Affirming that the “plugging and abandonment of Perseverance One has been carried out safely and responsibly”, BPC added that the Stena IceMAXX drill ship has moved away from the location and its contract with the oil explorer has come to an end.
“The Stena ICEMAX has just left the drilling location and is off-hire. However, the pace of operations has not ceased. The post-well review has begun, as the company charts its way forward in The Bahamas with a renewal of the farm-out process,” Simon Potter, its chief executive, said in a statement.
BPC added that despite the failure to strike commercial oil quantities, its exploratory well drilling has sparked renewed interest from farm-in or joint venture partners that could team with it to share the technical, operational and financial risks on any future Bahamian exploratory well.
“BPC is considering the most appropriate way forward for monetisation of its assets in The Bahamas, in particular, the renewal of an active farm-out process,” the oil explorer said.
“The company has continued to assess options for a farm-out or similar transaction as part of its overall risk mitigation and funding strategy, and maintained an active dialogue with a number of interested parties, including a number of oil and gas majors and super-majors, right up to the point of spudding the Perseverance One well.
“Since announcing the well results, the company has received a number of unsolicited approaches from industry counterparties. Gneiss Energy has been formally engaged to assist in managing a formal process to solicit broader industry interest in a farm-in alongside this early, positive interest.”
Mr Potter did not reply to Tribune Business phone messages and e-mails before press time last night. The next key date for BPC is end-March 2021, when it must submit its licence renewal applications to the Government ahead of the five southern licences’ expiry at end-June 2021.
The upbeat nature of yesterday’s statement indicates a renewal application is likely notwithstanding the initial Perseverance One results. Suggesting that the findings have further de-risked future Bahamian exploratory oil well drilling, BPC added: “In addition to obtaining an invaluable new sub-surface dataset which, in BPC’s view, reduces the exploration play risk for any future exploration activities in this frontier province, the well verified the structural model the presence of competent seals, high porosity reservoir and hydrocarbon charge.
“The combination of these play elements points to significant hydrocarbon potential remaining in a number of independent, untested play systems and structures seismically identified from 2D and 3D within BPC’s extensive acreage extending over its four southern exploration licences covering approximately 12,000 square kilometres - 4,700 square miles or three million acres).
“This extensive assessment will allow the company to fully integrate the new Perseverance well data into an updated interpretation of the previously mapped prospect and lead inventory accessible within the licences, and more accurately inform and direct the focus of the company’s forward strategy within its Bahamian exploration acreage portfolio.”
While BPC’s immediate attention is switching to its assets in Trinidad & Tobago and Suriname, BREEF’s Ms McKinney argued that “it doesn’t seem appropriate for BPC to be speculating about future drilling activities in Bahamian waters” when it has yet to settle outstanding licence fees due to the Public Treasury.
She added: “Given that the world is moving away from fossil fuels at an accelerating pace, it is highly unlikely that any oil company would be interested in drilling a new wellfield in the pristine waters of The Bahamas, especially considering that there would continue to be huge local and global public opposition to any further drilling.”
A further hint that BPC is not abandoning The Bahamas comes from the fact it is still proceeding with today’s Supreme Court hearing where it will argue that its environmental activist opponents should be required to lodge a $200,000 performance bond to cover its legal costs should their Judicial Review challenge ultimately be unsuccessful.
BPC is urging that Save the Bays and Waterkeepers Bahamas pay this sum before the oil explorer has to go to “the substantial costs” of preparing for a full trial. However, the activists are countering that they have “a genuine and arguable case brought in the public interest”.
They are arguing: “It is respectfully submitted that it would do justice between the parties to allow the applicants to continue to pursue their case on the basis that there are in existence assets (whether those of Save the Bays itself or of the Government of The Bahamas via garnishee proceedings) against which BPC will certainly be able to satisfy any costs order.
“There is therefore no risk to BPC of irrecoverable loss in this case continuing without an order being made. On the contrary there is a real risk of injustice (contrary to the public interest) if the security for costs order is made.”