0

Oil explorer told: 'Come clean' over unpaid fees

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Oil exploration opponents yesterday urged the Government and Bahamas Petroleum Company (BPC) to "come clean" on all their commercial agreements including the latter's unpaid licence fees.

Fred Smith QC, the Callenders & Co attorney and partner, who is representing Waterkeepers Bahamas and Save the Bays in their Judicial Review challenge to the permits granted to BPC for its first exploratory well, told Tribune Business that activities billed as a potential financial saviour for this nation required greater transparency so that citizens were properly informed on all potential issues.

He spoke out as his environmental activist clients voiced "shock" and outrage that BPC had been permitted to drill its Perseverance One well in waters 90 miles west of Andros despite it and the Government failing to settle outstanding licence fees owed by the oil explorer to the Public Treasury.

Casuarina McKinney-Lambert, the Bahamas Reef Environment Educational Foundation (BREEF) executive director, told this newspaper: "It is shocking that BPC was given the go-ahead to drill when it seems clear that there were licence fees outstanding.

"We would like to see government provide an accounting of what has been paid and what is still outstanding. We desperately need transparency. As a country, I would like for us to get beyond the adjectives and stick with the facts and numbers. What does 'a comparatively minor amount' of monies owed to the Public Treasury mean?"

Her comments referred to the response from BPC's chief executive, Simon Potter, who on Friday warned against "making mountains out of molehills" over the outstanding licence fees still owing to the Government even though these were supposed to have been paid by end-April 2020.

Tribune Business exclusively revealed on Friday that the Government had refused to accept BPC's payment of outstanding licence fees, with Carl Bethel QC, the attorney general, confirming that the two parties were engaged in a "reconciliation process" to resolve the "dispute" over how much the oil explorer owes to the Public Treasury.

Mr Potter, in an e-mailed reply to Tribune Business inquiries, downplayed the matter by asserting that the "reconciliation" was "a basic, auditable business practice" that involves "a comparatively minor amount" of monies.

"For anything to be suggested beyond this is little more than another instance of those who might be opposed to BPC’s lawful activities seeking to make mountains out of molehills by misrepresenting what are basic business matters and practices," Mr Potter told this newspaper.

"Given the various extensions to the licences agreed with the Government, including most recently as a result of force majeure occasioned by the COVID-19 pandemic, a comparatively minor amount of licence fees remains outstanding........

"This is a basic, auditable business practice and, as noted, the amount involved is relatively minor in the context of more than a decade of substantial licence fee payments by BPC to the Government."

However, Joe Darville, Save the Bays' chairman, yesterday described the outstanding licence fees as a "very serious revelation" that showed BPC has yet to completely fulfill its obligations to the Government and Bahamian people.

He added that the issue was supposed to have been resolved some eight-and-a-half months earlier, by end-April 2020, according to the timetable set out in the February 25, 2020, letter from Romauld Ferreira, minister of the environment and housing, which granted BPC the Environmental Authorisation (EA) for its first exploratory well that is now being challenged in the Bahamian courts.

Echoing Mr Smith and Mrs McKinney-Lambert, the Save the Bays chairman added: "We call on BPC to come clean. Simon Potter says there is a miniscule amount of funds not paid over. Precisely how much would that be?...."

And, calling on BPC to confirm how much it has paid in total to the Government through fees and seabed leases since being awarded its licences in 2007, Mr Darville urged: "BPC must reveal the precise state of its dealings with the Government regarding any and all licence fees, or be forced to do so by the authorities."

BPC, according to its own website, is required to pay $250,000 per annum for each of its four southern Bahamas licence fields that lie on the maritime boundary with Cuba, taking the annual total to $1m. It must also begin drilling a second exploratory well by December 2022 under its present licence terms, although this will depend on licence renewals and the findings from the Perseverance One well.

The full extent of BPC's commercial agreements, including the licence terms and conditions, have never been fully disclosed by the company or the Government. Mr Smith argued this was why the Judicial Review process launched by his clients is so important, as will potentially shed light on the two sides' dealings.

Suggesting that this was vital to informed debate on the controversies aroused by oil exploration, Mr Smith said: "The public does not know what these commercial agreements are with respect to the licences and the fees. The public remains blindsided by the secrecy that has shrouded these agreements between successive governments and BPC.

"This is a terrible situation for the Bahamian public to be in given the public importance of this matter. I would have thought that in order to encourage rational, and not speculative, hyperbolic or misconceived debate about the oil licences and BPC, the Government would hasten to make public the commercial agreements.

"In this way there can be some sensible, reasonable public discourse about these issues. As with anything that is shrouded in secrecy, people are left to speculate, often from ignorance, and that is why this Judicial Review is so important," Mr Smith added.

"It requires the Government to put all its cards down, face up, on the table. By this method of transparency through the judicial process the Bahamian public will perhaps find out what these commercial agreements, quite apart from the licences, are.

"There may be side letters and agreements that cover other aspects of this matter. We are dealing with a resource, a raw material, that BPC and its companies are promoting as being the financial panacea to the woes affecting the future of The Bahamas. As a sovereign nation the people of The Bahamas ought to know, and be able to debate, all the relevant issues related to oil exploration."

Comments

Bahama7 1 year, 7 months ago

Yeah baby... smell the oil .

Shock after 10 years of holding licenses!! Lol.

You still get paid Freddie - don’t worry.

0

Sign in to comment