Oil, Oil Drilling, Oil Royalty, Oil Royalties and Oil Madness with the Grimpen Reprobates and Greed-lusting Lunatics in The Bahamas

 PROFESSOR GILBERT MORRIS ON BAHAMAS’ POOR CONCEPT OF NEGOTIATION:

IN TODAY’S PAPER, the Attorney General of the Bahamas intones that “if they find oil” we’ll negotiate a royalty!

Every hedge fund manager, investment banker, every bond investor, and investment grade insurance broker spilled his coffee at those petulant words. Every first year student in finance or graduate student in a negotiation or mediation seminar knows this statement goes against every basic rule of negotiation or even business strategy.

Here is the context any strategist sees immediately:

1. You (THE BAHAMAS) allows a no name company that’s no where near the best-of-brand to travel around the world flogging the name of the Bahamas in some ‘hustle and flow’, selling their eyelashes and toenails to raise money for what purpose? TO DRILL in the Bahamas...HEAR ME NOW: THE BAHAMAS!

2. This name (BAHAMAS) that evokes natural wonder GLOBALLY; a luxury brand that the world saves-it’s-money in hopes to enter and engage...you allow this BRAND to be flogged in every slopbucket across the globe...altering IMMEDIATELY 120 years of branding.

3. Just to emphasise: It’s not as if this company moved around saying “Hey man, this process is like we are exhibiting at the Louvre or in the Vatican. THEY ARE NOT HAVING TO SAY: this is the Bahamas. We have strict rules on who can participate in this deal, even stricter rules on how we mention the Bahamas’ name and still stricter rules on the methods: in fact, we have to work with the best engineers in the world and the leading environmental scientists...basically inventing a new concept and method for even preliminary exploration and it has to go before a global panel of experts and the science has to show a “Saudi Reserve level motherload” of potential oil”, with forward contracts for sales of $100 billion in 10 years”.

This is the language and pressure ANYONE WHO GAINS THE CONCESSION TO DRILL IN THE EARTH’s MOST PRISTINE ENVIRONMENT SHOULD SPEAK AND FEEL. This raises a question: WHERE IS THE SCIENCE? The science and engineering methodology that allows a company to DRILL IN THE BAHAMAS should be of a quality to win the Nobel Prize! It should have tongues wagging about a NEW BAHAMIAN SCIENTIFIC STANDARD! Where is the science?

4. The fact that the company does NOT have to speak in this manner and the fact that they NOW KNOW, gaining a concession to drill in the Bahamas is little different from selling fake hair, IT IS THEY who gained confidence in this affair?

THEY GREW FROM NOTHING TO SOMETHING!

THE BAHAMAS GAINED NOTHING: we didn’t set a new deal standard, we didn’t layout new green criteria...NOTHING! Instead this process shows any hustler can gain access to the world’s most pristine environment because we, to whom God granted stewardship, are low-information fools, who would sell our children’s tongues for disposable shiny objects!

5. Negotiations depend on leverage: so if this company knows we are so clueless, backward and morally vulgar toward our birthright, that we put them under ZERO PRESSURE to violate a 120 year old hospitality brand, under zero pressure to INVENT some new process for this privilege to drill in our environment, then we’ve lost already! UTTERLY!

6. What the AG’s apocalyptically dissonant statement says is this: WE permitted a nothing company a concession to VIOLATE the tranquility of our NATURAL LANDSCAPE THAT WE DIDNT CREATE AND CANT REPLACE, which the entire world envies, and now that they have this concession and USED THE NAME AND PRESTIGE OF THE BAHAMAS to gain notice in the world - FOR NOTHING - we will wait until they discover the two cups of dirty dishwater under OUR PRISTINE OCEAN FLOOR...then when that company goes from nothing to making an oil find in THE BAHAMAS...and once they HAVE ALL THE POWER AND LEVERAGE in the deal structure...we, THE BAHAMAS will negotiate a royalty!!!!!!

Are we smoking the hair of our armpits?

7. This telegraphs to the entire world that we are not just clueless to have allowed this TREASONOUS ASSAULT ON OUR ENVIRONMENT, but we have not even a basic clue how deal-structure functions. This leads to another question: WHERE IS THE DEAL STRUCTURE, BENCHMARKS, HURDLE PROPOSITIONS AND SPILL INSURANCE EQUAL TO THE RARE ENVIRONMENT THAT’s BEING PUT AT RISK? WHERE IS IT?

9. But here is the ‘coup d’ grace’, any deal specialist knows already the investment begging company can’t monetise any oil find. As such, they likely would have to flip it to a major oil company if they find anything. Given that the world is awash in cheap oil, and with major new oils finds in Russia, Brazil and with Iran set to come online forcing global prices lower, they would cap those wells in the Bahamas and we get NOTHING! NOTHING! NOTHING....as usual!

10. BUT the world knows now that we are grimpen reprobates and greed-lusting lunatics, who would sell a priceless irreplaceable environment - with a 120 year global profile - for NOTHING, ignoring our competitive advantages in new hospitality models, for a dying industry in which we have zero and would have zero influence!

Source/Comments

Vexing and environmentally damaging Oil Spill along the shores of southwest New Providence Island

Oil Leak Was From Bec And One Other Source

By SANCHESKA BROWN

Tribune Staff Reporter

sbrown@tribunemedia.net

BAHAMAS Electricity Corporation executives met with government officials and a team of biological engineers from the United States yesterday morning after it was discovered that fuel from the corporation’s Clifton Pier facility was leaking along the coastline.

According to Environment Minister Ken Dorsett, the fuel from BEC was mixed with oil from another source that began spilling into canals near Stuart Cove’s Aqua Adventures and Albany last week.

He said the government’s main focus is on containing the oil.

During an address in the House of Assembly, Mr Dorsett said an inspection of BEC’s plant on Sunday revealed that not only was fuel being discharged from one of the facility’s outfalls, but it also revealed that BEC’s containment booms were not preventing all of the fuel emitted into the marine environment from spreading.

“Initial reports indicate that on Wednesday of last week, Stuart Cove’s discovered an extraordinary amount of fuel in the canal area of their operations and the dive sites they use off the southwest coast of the island of New Providence. Initial reports also indicate that Albany also reported fuel in the water and coastline of their property. On Thursday past it was reported to the port controller that there was a smell of oil and an oil slick seen in the Clifton area,” he said.

He said that on Sunday the Royal Bahamas Defence Force took members of the National Oil Spill Committee along the coastline to inspect the marine environment.

“I also inspected the outfalls of the BEC Plant, the BEC containment booms in Clifton Bay and Stuart Cove’s on Sunday morning,” Mr Dorsett said. “The BEC containment booms were not preventing all of the fuel emitted into the marine environment from spreading. It also appeared that fuel was being discharged from one of the outfalls. An inspection of Stuart Cove’s facilities, revealed evidence of fuel discharge in their canal, along the coastline and on the bottoms of their vessels.

“This morning (Monday) two biological environmental engineers from Coastal Systems International arrived in Nassau. A briefing meeting was held at the Ministry of Works at 8:30 am for all government stakeholders and advisors, including officials from BEC. As we speak, the government’s response team and our environmental consultants are inspecting the relevant properties, including BEC’s Clifton Pier Plant.”

Mr Dorsett said all relevant parties and businesses in the industrial area will be engaged in discussions with the government over the next few days to assess and confirm the source or sources of the oil spills as well as the extent of the contamination of properties in the area, including the Clifton Heritage Park.

The consultants will also advise the government on the best way to mitigate and remediate the oil leaks.

This latest spill comes after a significant quantity of oil washed ashore on Adelaide Beach.

The oil found at Adelaide Beach is suspected to have been dumped by a passing ship, according to Aviation and Transport Minister Glenys Hanna Martin, who addressed parliament on the matter.

Last month BEC Executive Chairman Leslie Miller also denied that BEC’s Clifton Pier plant was the source of the oil. Mr Miller explained at the time that if the oil came from BEC’s plant it would have “run in the opposite area” near Jaws Beach away from Adelaide.

July 07, 2014

Tribune242

Bahamas Petroleum Company (BPC) says it expects to find crude oil in The Bahamas

BPC Expects To Strike Oil

By Jones Bahamas:

Efforts to find oil off Cuba may have failed, but the Bahamas Petroleum Company (BPC) – the only explorer searching for oil off the Atlantic archipelago – says it expects to find crude oil in The Bahamas.

BPC CEO Simon Potter recently noted that a seismic study by his company showed that the Great Bahama Bank may have oil at shallower water depths, making it easier to drill, and a layer of salt keeping the crude in place.

BPC is currently looking for a partner to raise at least $100 million to drill the country’s first exploration well in about 27 years.

It holds five licences covering more than 4 billion barrels of potential oil resources and is seeking three more with Statoil ASA.

Last month, the Christie administration gave BPC the green light to explore for oil.

Environment Minister Kenred Dorsett said the government wants to first see if there is oil in The Bahamas before proceeding with a voter referendum.

“Let’s go and bake the cake, let’s establish commercial reserves,” Mr. Potter said. Should a discovery be made, “there’ll be a much more positive issue to be managing.”

Mr. Potter has already noted that oil extraction could help The Bahamas reduce its mounting debt.

Government borrowings rose to 53 percent of gross domestic product last year from 32 percent in 2007, according to a December report by Moody’s Investors Service.

However, environmentalists are leery about drilling for oil, noting that it could destroy The Bahamas’ precious natural resources.

22 April, 2013

The Bahama Journal

Caribbean Blog International

The Adversarial Relationship Between The Multinational Oil Companies and The Government of The Bahamas

The Local Oil Companies in The Bahamas are Brazenly Attempting to Manipulate Public Pressure on The Bahamian Government for Further Increases

Consumers and oil and gas prices

By Charles Fawkes

Nassau, The Bahamas

HOUSE OF LABOUR: The price of oil and gas will continue to remain high in the coming months because the oil companies locally and on the international scene will continue to manipulate the oil market- (whether it be because of the war in Iraq or whatever)- creating artificial shortages in order to "jack up" prices to make huge profits.

They will blame ravenous global demands and petroleum producers' reluctance to boost supplies.  They will also blame security problems in Saudi Arabia and Iraq claiming that these problems have inflamed the market.  They will also blame the Organisation of Petroleum Exporting Countries (OPEC) and any event they can latch on to.

Recently, June delivery for crude oil rose 77 cents on the New York mercantile exchange to $38.98 per barrel, a new 13-year high, while unleaded gasoline for June delivery gained 4.4 cents to $1.31 per gallon, the highest settlement since the contract started trading in December 1984.  June heating oil climbed 2.02 cents to settle at 98.81 cents per gallon.  Natural gas futures climbed 3.8 cents to settle at $6.269 per 1,000 cubic feet.  Increases in oil and gasoline futures typically cause pump prices to rise.  Refineries are running flat out ahead of the peak summer driving season, but costlier crude makes it more expensive for them to produce gasoline.  The average price of regular unleaded gasoline in the United States is $1.84 per gallon, according to the Energy Department, and analysts say the cost could rise as high as $3 per gallon in some regional markets.

Additionally, contracts of North Sea Brent crude for June delivery soared by $1.30 to $35.78 per barrel in late trading on London's International Petroleum Exchange.  Markets rose after the U.S. ambassador to Saudi Arabia, the world's No.1 oil exporter, advised Americans to leave the country following the killings of five foreign workers at a petrochemical plant there.

The Organisation of Petroleum Exporting Countries, which pumps one- third of the world's oil, has reaped a windfall from higher crude prices.  OPEC insists that it aims for an average target price of $25 per barrel for its benchmark blend of crude, but the actual benchmark stood 37 per cent higher than this at $34.13 on Monday, May 17, the most recent day for which OPEC complied data.  OPEC blames high prices largely on speculators and political tensions in the Middle East.

Locally, gas prices in January stood $2.93 per gallon. With the current manipulation of the market this could rise to $3.30 in Nassau and as high as $3.42 in the family islands

The price of no other commodity is as directly and critically linked to the cost of living as the price of petroleum products, especially gasoline and diesel oil.  So much so that the present struggle of the multinational petroleum companies in The Bahamas, for hefty increases in gas prices, begs a historical perspective and review.

Until the 1960’s, the industrialised countries had a cheap and plentiful source of oil from their former colonial territory until these, now independent, countries became wise as to the degree their most valuable resource, oil was being exploited.

In 1960, 13 of these oil-producing nations who depended largely on oil exports for their income and trade got together and formed the Organisation of Petroleum Exporting Countries (OPEC).  The members of this organisation supplies about 85 per cent of the oil imported by non-member nations and have a major influence on the petroleum industry globally.

Among other things, the organisation influences prices and set production quotas for its members to maintain their desired per barrel of oil.  Over night the price of a barrel of oil went from a couple of dollars to as much as $50 per barrel and now fluctuates around $12-$15 per barrel depending on the grade.

Those of us old enough can remember this economic shockwave felt globally by this sudden increase in the price of oil.  Many small nations' economies virtually collapsed - a disaster from which many will never fully recover.  There were severe shortages of gas worldwide and its price skyrocketed.  This was also accompanied by sharp increases in the process for all other goods and services. The cost of living also went through the roof.

In The Bahamas, we have vivid memories of the gas shortage at the time and the long lines at the stations when gas was available.  The sharp increase in the price of gas was only held partially in check by the then government, which instituted controls on its price.

This was the beginning of the adversarial relationship that exists between the multinational oil companies and the government in The Bahamas.  The companies want to extract as much as they can from the Bahamian consumer and the government, exercising controls, should be protecting the consumer from their exploitation.

The oil crisis of the 60's offered the perfect environment for the multinational oil companies like British Petroleum, ESSO, Shell and Texaco, etc., to demonstrate their greed.  We must remember that even though the members of the OPEC demanded a fairer price for their oil, they lacked technical skills and experience to extract the oil, refine it and market it.  So they were forced to rely on the multinational oil companies for their expertise.  The multinationals became, in fact, the middlemen.

The oil companies seized this opportunity to manipulate the oil market creating artificial shortages and hiking up the price in order to make huge profits.  To divert attention from their activities, they used their unlimited public relations resources and their government influence to shift the blame to OPEC.  The result was billions of dollars in windfall profits for the oil companies.  Even a nation as powerful and sophisticated as the Untied States finds the multinational oil companies formidable foes to regulate and control.  The tactics they have used in The Bahamas in recent months to extract increases in the price of gas, demonstrated that they have not changed in character.  As small and relatively unsophisticated as we are, compared to the United States, what chance do we have against them?

The local oil companies are brazenly attempting to manipulate public pressure on the government for further increases.  The pressure being applied is close to blackmail.  They may even threaten to cut back on their inventory of gasoline and diesel oil, which would create an artificial shortage on the islands.

The stakes are high for the Bahamian worker because the level of his quality of life is threatened.  The Ministry of Trade and Industry, although, granting the recent request for increase have in the past insisted that the companies absorb some of the increased cost in their 33 and 44 cents margins.  According to the Nassau Guardian, Minister Leslie Miller also suggested that both petroleum distributors and retailers being absorbing some of their increased costs in the 33 and 44 cents respective margins enjoyed by each.

"What we are trying to tell them is instead of putting all this in the Bahamian people, with their 33 cents and 44 cents, it's time they take some hits," he said.  "Your margins will get cut down in half anyhow.  Thank God you have these margins still in place for the next month come June they will be dealt with."

Consumers in the meantime are waiting anxiously to see if Minister miller can reduce the prices of gas as he has promised to do with the setting up of a National Energy Corporation and the purchase of supplies from some regional oil producers.

Charles Fawkes is the President of the National Consumer Association and organiser for the Commonwealth Group of Unions, Inside Labour columnist for the Bahama Journal, Editor of the Headline News, The Consumerguard and the Worker's Vanguard