The Bahamas Chamber of Commerce and Employers Confederation (BCCEC) support permitting oil exploration in Bahamian waters ...once regulatory safeguards were in place... ...potential earnings could "eliminate The Bahamas' National Debt in five years"

Chamber Backs Oil Exploration

By NEIL HARTNELL

#Tribune Business Editor

THE Bahamas Chamber of Commerce and Employers Confederation (BCCEC) yesterday backed permitting oil exploration in this nation's waters once regulatory safeguards were in place, telling Tribune Business potential earnings could "eliminate the National Debt in five years".

I Chester Cooper, the BCCEC's chairman, effectively told this newspaper that the Bahamas - and its economy - could not afford the 'opportunity cost' of passing up the financial benefits if commercial quantities of oil were found within this country's territorial boundaries.

Projecting that revenues worth a conservative $1 billion per year could be generated if the Bahamas Petroleum Company (BPC) and its joint venture partners were to discover oil deposits that could be extracted, Mr Cooper said the sector had the potential to "transform the economy" - both directly and through spin-off commercial activities.

Calling for a "non-partisan" debate on oil exploration in the Bahamas, the BCCEC chairman acknowledged that a comprehensive environmental, health and safety regime was required to protect this nation's environment and tourism industry.

Urging the Government to "get on with it" when it came to developing such a regulatory regime, Mr Cooper pointed out that the energy and tourism industries already co-existed in the Caribbean, in the shape of Trinidad & Tobago and Barbados. Cuba, also a tourism-dependent destination, has begun to drill in waters near its territorial boundaries with the Bahamas.

Emphasising that the BCCEC's support depended on the necessary safeguards being in place, Mr Cooper suggested it was time to lift the debate on oil exploration, and BPC's activities, to a higher level and away from being a 'political football'.

"Now that the political season is over, it is a good time to have a comprehensive, non-partisan debate on the issue," he said.

"We support the continued exploration of oil and, if successful, the eventual development of a safe and well-regulated industry. We urge the Government to quickly put the proper regulations in place for the orderly development of this industry."

Oil exploration was first seized on by the Democratic National Alliance (DNA) as an issue that it could exploit for political mileage in the general election run-up. Then former Prime Minister Hubert Ingraham attempted to use it, and BPC, to portray the Progressive Liberal Party (PLP) as 'conflicted' and unlikely to act in the nation's best interest, given that Davis & Co (now Deputy Prime Minister Philip Davis's law firm) and former PLP attorney general, Sean McWeeney, were named as the company's legal advisers.

There were then suggestions that Prime Minister Perry Christie had acted as consultant to BPC while in Opposition. Eventually, the PLP pledged to hold a referendum on whether oil drilling and exploration should be permitted in Bahamian waters, while Mr Ingraham backtracked from an earlier position that the FNM would not permit the industry if re-elected.

Ultimately, the former Ingraham administration returned to its already-stated position that oil drilling would not be permitted, and no new licences issued, until an appropriate regulatory regime has been implemented. Government officials have already visited the likes of Norway and the UK to examine those countries' regimes, and what the Bahamas can learn from and bring here.

Nevertheless, just prior to the general election, the Government decided not to renew the five BPC licences that expired on April 26, 2012, and returned the company's $300,000 fee payments to it. This leaves the ball very much in the newly-elected Christie administration's court.

BCCEC chairman Mr Cooper, meanwhile, indicated that the tremendous economic benefits - if oil was discovered in sufficient quantities in Bahamian waters - meant this nation, with its limited natural resources, narrow economic base and troubled government finances, could not afford to spurn this opportunity.

"The likely revenues can eliminate the National Debt in five years and contribute significantly to education, healthcare and development of infrastructure across the country and, importantly, an expansion in GDP leading to more favourable economic metrics," Mr Cooper said.

He added that the revenue generated from oil exploration could be used to reduce import tariffs on oil imports, reducing energy and gasoline costs. This, in turn, would lower the cost of living and doing business in the Bahamas, and make this nation much more competitive in attracting foreign direct investment (FDI).

"We cannot afford to be dismissive of these realities," Mr Cooper said, acknowledging that a proper regulatory regime - and its enforcement - were "a must" to preserve the environment and tourism industry.

Noting the example set by other Caribbean nations, he added: "It doesn't have to be one or the other - both can co-exist. It is being done in the region, in Barbados and Trinidad & Tobago.

"Clearly, the risks can be managed. We further understand that the Cubans are drilling right across the Bahamas' border. So we need not re-invent the wheel with respect to the regulations. We can draw on our friends in the international community with tried and tested regulations, like the US, UK, Trinidad and the Clean Caribbean Initiative."

Calling on the Government to "get on with it" when it came to developing a regulatory regime, because the opportunity cost of not doing so was too great, Mr Cooper said the Bahamas had to ensure its people were either trained abroad - or qualified Bahamians enticed back home - to participate in the oil exploration sector.

The BCCEC's energy and environment committee, he added, felt there was too much misinformation circulating on oil exploration, and called on the Government and BPC to better educate the public. The BCCEC is also planning to start discussions by hosting a luncheon on the topic shortly.

May 18, 2012

tribune242

Caribbean Blog International

Setting the record straight on oil exploration in The Bahamas

Setting the record straight on oil exploration

By Dr. Paul Crevello

Politicizing is common in election years, especially when the initiator is feeling pressure to undermine his opponent.  It is happening in the U.S. presidential race, and it is certainly evident in Bahamian politics.  In this case, in reference to Bahamas Petroleum, what is being stated in the press needs attention.

As former CEO of Bahamas Petroleum, I was present when our licenses were submitted and approved and wish to clarify misconceptions.  I felt it was necessary to step forward and comment on the process BPC went through when applying for the exploration licenses, which was an arduous process with multiple stages of dialogue between the responsible agencies of the government, from the respective ministries, the Cabinet, the attorney general and eventually approval by the governor general.  The process took nearly two years and in the end was awarded under the Progressive Liberal Party (PLP) term in 2007.  But, I wish to point out that the licenses were reviewed immediately upon the Free National Movement (FNM) entering office in May of 2007, and the FNM administration confirmed that the licenses were awarded following established government guidelines set in place by the Petroleum Act.  Therefore, the license application and approval process followed established government procedures, which was a multi-stage approval process that in the end both major political parties reviewed and approved.

What is important is the potential benefit to the country if oil is present and producible, and nothing more leaving politics aside.  There is oil in The Bahamas, but we do not know how much and if there is sufficient pool to be developed.  If so, then the people will be the ones who benefit over the long-term if the process continues to follow legal stipulations of the government and adhere to international safety standards.

Background

Both parties have awarded exploration licences in the past.  In 1983, the law firm of Christie and Ingraham was engaged by Tenneco for approval of drilling a well (drilled in 1986) in the southwest Bahamas.  In October 1999, the FNM awarded exploration licenses to a private “minnow” oil company, Liberty Oil concession, whose owner is a real estate developer, and in 2003, the PLP awarded exploration licenses to the U.S. major oil company Kerr McGee.  The PLP awarded licenses to BPC in 2007 and it became a publically traded company on the London AIM exchange in 2008.  Yes, we engaged Davis and Co. to represent the company and file our license applications.  But they were the only law firm qualified in the oil and gas sector and had experience with Kerr McGee.  So they were and still are the top firm in this field.

It took me several years to convince the Christie regime that there is a probability that commercial pools of oil may be discovered in The Bahamas.  Major oil companies have spent over a hundred million dollars in seismic exploration and drilling five wells in The Bahamas since 1948, all without mishap.  I had commissioned about US$50 million of technical studies, which were recently reported to have a one in two chance of finding four billion barrels of oil.  However, finding it is not the same as being able to get it out of the ground.  It is a complex process and could result in a multi-billion-dollar investment and still many years away from when the first well is drilled.

When the FNM took office in May 2007, I had to gain the confidence of the new administration that The Bahamas may become another Middle East – i.e., net oil producer and exporter.  It took me a couple of years and numerous presentations to convince the new government of this potential, and then it was at that time I introduced the government to the partnership I signed with Statoil of Norway, including audience with Prime Minister Hubert Ingraham.

During the FNM regime, I provided consultation to the Ministry of Foreign Affairs as to the location of the potential oil fields of the southern Bahamas waters, so these areas would be preserved for The Bahamas during negotiations with Cuba on the position of the international border.  I did not want this to be lost in negotiations.

I also suggested that the government initiate dialogue with the respective agencies of Norway, in order to learn how a fishing and lumber-dominated economy went to being one of the wealthiest sovereign funds in the world.  The ministry began dialogue with the government of Norway through political channels on drilling policy and establishment of a sovereign fund.  The FNM government was evaluating the necessary steps required to moving to an oil-producing nation and net exporter if oil was discovered.

Then, BP oil spill in the Gulf of Mexico occurred in April 2010, and rightfully, the government chose to proceed with caution in evaluating the full impact of drilling in The Bahamas, establishing the safeguards to prevent a similar situation from happening in The Bahamas.  The FNM still discussed procedures with the Norway counterparts to strengthen policies for The Bahamas.

Regarding the licenses, Alan Burns, the founder of BPC, first applied for exploration licences in August 2005, following the protocol of the Bahamian Petroleum Act, which was based on UK North Sea regulations.  At the time Burns applied for the exploration licences, the last major entry into The Bahamas exploration was Kerr McGee in 2003, exiting in 2006.

BPCs license applications went through three approval processes; firstly with Minister Leslie Miller of the Ministry of Energy in early 2006.  Then following revisions, provisional approval was granted in late 2006 by the Permanent Secretary Camille Johnson, with final approval signed into effect in early 2007 by Dr. Marcus Bethel, minister of energy and the environment.

The applications then went to Governor General Arthur D. Hanna, whose duty it was to assess the merits and benefits to the country of assigning government lands for exploitation.  As would be expected of a request of such importance, the governor general invested considerable time in reviewing the agreements.  Hanna and the PLP administration (Cabinet and PM Christie) insisted that environmental guidelines and protocol be inserted into the licenses to protect the environment, even though the protocol was not required by the Petroleum Act.  I complied with the insertion because, as an environmentalist, my belief was that we as a company explore with the intention of preserving the environment for future generations.

Upon acceptance of the company’s revisions, the licenses were approved by Hanna, whose authority it was to grant government titles and licensing of Commonwealth lands.  The licenses were signed into effect in April 2007.  This process was not new to the governor general, as he had approved similar applications for Liberty Oil and Kerr McGee.

I ran about eight focus groups with Joan Albury of The Counsellors Ltd. throughout the major cities in The Bahamas, with a general cross section of the population participating.  The majority were in favor of progressing oil exploration after learning about the company and the safeguards it would follow, the potential for discovery of petroleum and the potential benefits to the people and the government.  So in essence, it was received very favorably and these fora were done after the BP Gulf of Mexico oil spill in, I believe, either late 2010 or early 2011.

The landscape

The U.S. government has determined that the BP Macondo spill was by human error.  The oil zones (reservoirs, oil occurs in tiny spaces within rock layers much like water in an aquifer) in the Gulf of Mexico are under very high pressure because of geologic conditions related to burial of soft sand under the Mississippi delta.  In contrast, the reservoirs drilled to date in The Bahamas, south Florida and Cuba are normal unpressured layers because of the hard limestones.  Low pressure in these limestone reservoirs has been established from hundreds of wells drilled in the region.

The last well to be drilled in The Bahamas was in 1986 by Tenneco in the southernmost part of Great Bahama Bank, which was drilled in the shallow part of the bank, closer to Cuba than to Andros island.  Prior to that, four other wells were drilled between 1948 to 1972 in The Bahamas, and none of the wells suffered any mishap: two onshore wells, one on Andros and another on Long Island; and two “offshore” wells drilled in pristine aqua waters of the shallow bank, one just north of Bimini visible from the Great Isaac lighthouse, and another well was drilled in the center of Cay Sal Bank.

And all wells had positive shows of oil and or gas.  The areas were left pristine as before drilling and there was no reported impact on the environment.  A U.S. government report (USGS by Dr. Eugene Shinn) reported on the numerous wells drilled in the Florida Keys and that there was no impact on coral reef environments.

Drilling has been conducted safely and successfully in The Bahamas in the past.  Wells will be drilled on the Cuban side of the boarder, within 10 kilometers or closer to the international boundary with The Bahamas in the coming year.  Oil spill models that I commissioned and recently reported by the company show that if a spill would occur, which would not be a high pressure Macondo-type blowout, then the probability of the spill making landfall on Bahamian beaches is less than a tenth of a percent, nearly zero.

Let government regulations, public fora and the best interest of The Bahamas decide on the potential of the petroleum investment, not politics, rhetoric and ivory tower special interest groups.  I believe once the election is past, the Government of the Commonwealth of The Bahamas owes it to its people to test the potential for oil pools in the south, adjacent to the boundary with Cuba.  Cuba will be testing its side of the border, shouldn’t The Bahamas at least hope that “it could be so lucky”?

• Dr. Paul Crevello is CEO of Discovery Petroleum.  He is also the former CEO of the Bahamas Petroleum Company.

May 11, 2012

thenassauguardian

Caribbean Blog International

...the Democratic National Alliance (DNA) has tried to gain political mileage by stirring up a controversy over oil exploration in The Bahamas

Oil drilling in the Bahamas - the facts behind the scares

 

By LARRY SMITH:

 

 

IN RECENT weeks, the Democratic National Alliance has tried to gain political mileage by stirring up a controversy over oil exploration. But rather than focus on the very real substantive issues in a constructive way, they chose to launch a series of personal attacks and conspiracy charges.

In view of the enormous international pressures and revenues that can be expected, together with the dramatic changes to our way of life that are implicit in future oil production, not to mention the incredible pollution risks, it is worth taking a closer look at this issue - particularly in the context of the accusations of cover-ups and carve-ups.

Our original petroleum act was passed in 1945 to facilitate exploration by Gulf Oil, Standard Oil, Superior Oil and Shell. It was replaced by legislation enacted by the Pindling government in 1971, which came into effect seven years later and remains in force today.

The last exploratory well was drilled here in 1986 by a company called Tenneco, and while no commercial production followed from those early explorations, there were oil shows and most experts are convinced that large quantities of petroleum lie beneath our seabed.

The Christie government awarded a British group (later constituted as the Bahamas Petroleum Company) five new exploration licenses for just under four million acres in 2006. The licenses became effective just before the last general election in April 2007, when they were signed by the governor-general. And for the past several years, BPC has been conducting geophysical research in the Bahamas.

Now BPC says it is preparing to conduct appraisal drilling south of Andros, and the DNA thinks this amounts to a conspiracy involving secret deals. The party has set up a Facebook petition on oil exploration, asking Bahamians to sign "If you think we should control our resources to benefit all Bahamians, so we can demand answers before it's too late".

From the commentary it has made, the DNA is clearly not opposed to drilling, but is simply trying to stir the pot. This is not necessarily a bad thing, but it depends on how it is done. Accuracy and honesty are important when making public statements on complex issues. Publishing false statements and facilitating wild allegations will lead to a rapid loss of credibility.

For example, according to the DNA, "this government negotiated a 12.5 per cent (royalty), one of the worst in any country". In fact, it was the Pindling government - back in 1971 - that set a then industry-standard minimum royalty rate of 12.5 per cent "of the selling value at the well-head of the petroleum won and saved from the licensed or leased area".

And, contrary to what the DNA now alleges, the licenses awarded to the Isle of Man-based Bahamas Petroleum Company in 2007, set a sliding scale of 12.5 to 25 per cent of production value, a fact which BPC clearly shows on its website.

Those licenses were never renewed, because the government imposed a moratorium on oil exploration in 2008, while efforts were made to pin down precise maritime boundaries with Cuba, the US and the UK/Turks & Caicos Islands. The boundary with Cuba - where four of the BPC licenses are located - was finalised last October.

In 2010 - following the catastrophic Gulf of Mexico oil spill - the government decided to step back and review the entire petroleum policy framework before allowing exploration to resume. The Ministry of the Environment also required all license holders and new applicants to produce environmental impact assessments for the areas they wished to explore.

There are currently seven approved licenses for oil exploration in Bahamian waters, and 10 applications for new licenses have been submitted since 2008. Five of the approved licenses are held by BPC. The other two are held by Liberty Oil, but were suspended because of the company's failure to remove a sunken vessel from an Abaco reef.

A US company called NPT Oil has applied for seven licenses covering more than six million acres north of Grand Bahama. NPT's Bahamian data and assets were recently acquired by Pennine Petroleum Corporation, an emerging oil and gas exploration and development company active in Alberta and Saskatchewan.

A Canadian geophysicist named Allan Spector has applied for an onshore license near Seymours on north Long Island. And a partnership between BPC and the Norwegian company Statoil has applied for three licenses covering more than 2.3 million acres near the Cay Sal bank.

DNA Montagu candidate Ben Albury - who has led the party's campaign on this issue - says he is simply demanding transparency and information. But he has also accused Environment Minister Earl Deveaux of gross malfeasance, without any evidence, and has succeeded in making the issue more opaque, rather than clearer, for the average Bahamian.

"My main issue," he told me over the weekend, "is the dodging of the questions by Deveaux. If you listen to his comments, he makes it sound as if there is a moratorium on oil exploration, (but) BPC is telling the media that they intend to drill in the coming months."

Albury cites a Miami Herald article published last October, in which Dr Paul Gucwa, BPC's chief operating officer, refers to plans for an exploratory well by the end of this year. "The Bahamian government has a moratorium on granting new exploration licenses," the Herald reported, "but... that could change following the country's May general elections. BPC has contacted 10 major international oil companies about partnering in its oil exploration operations."

A review of Deveaux's statements on this matter over many months, if not years, shows an entirely consistent position. He has repeatedly stated that the exploration freeze will remain in effect until an updated regulatory system has been put in place. He has also said that the present government is committed to the widest possible public consultation on the issue of oil production.

However, if you listen to the talk shows, some Bahamians are already gearing up to stop work and collect their "black gold" dividend cheques, while others are worried about secret backroom deals in which the well-connected carve up the country's seabed for their personal benefit.

Interestingly, there may be some truth to this. As mentioned earlier, experts have believed for decades that large quantities of oil and gas lie beneath the Bahamian seabed, and now that drilling technologies and market prices have reached the point where exploitation is not only feasible but profitable, we can reasonably project a massive influx of petroleum revenues in the near future.

But that is precisely why the government is seeking to overhaul our regulatory, legislative, environmental and financial regimes, in order to lay the groundwork for the orderly development of this industry (whether you like it or not). As Deveaux told me over the weekend: "Without detailing all the issues inherent in something so materially significant, it is a clear responsibility of the government to prepare the country for oil and its likely consequences."

The DNA appears to be confused because, under existing Bahamian law, licensees are required to drill an exploratory well within a certain timeframe - which in BPC's case is prior to April 2013 - or risk forfeiting their rights. The company says it has completed the required environmental impact assessment for this test well and is already working on a management plan.

Meanwhile, Environment Ministry officials have met with their counterparts in Norway to discuss revisions to the existing act and regulations, and consultants have produced working drafts for the government to review, after which they will go to the attorney-general. Deveaux says the proposed regulatory system will be included in his hand-over notes for the next government.

"Our visit to Norway in December was very useful and the government has agreed in principle to use that country's policies as a guide in developing a Bahamian petroleum industry," Deveaux said.

Norway began offshore petroleum production in 1971 and is now the world's seventh largest oil exporter and second largest gas exporter, with some 600 licenses awarded to a variety of companies. Norwegian officials have advised the Bahamas to have all the essential elements of oil and gas governance in place before any drilling begins. These include environmental, safety, tax, revenue, training and employment policies; contingency plans; and insurance requirements.

Norway's national petroleum policy seeks "to ensure long term management of, and value-creation from, the country's petroleum resources". Oil and gas activities are restricted to offshore waters, and all subsea resources are vested in the state, which is charged with managing them for the benefit of Norwegian society as a whole.

As we said, under the current Bahamian act, an exploration license includes an obligation to drill, and a bond must be posted to that effect as a way of precluding speculators. Exploration licenses are awarded for an initial term of three years, renewable for two successive three-year periods, but the 2008 moratorium meant that BPC's original license was put on hold and never technically renewed.

Similarly, if BPC's exploration is successful, current law says it is "entitled" to a renewable 30-year lease to begin commercial production. The royalty rate for production of oil and gas is based on a sliding scale of 12.5 to 25 per cent (from which the lease fee is deducted), with no other taxes or fees required. Equipment can also be imported duty-free.

On its website, BPC says that its license expires on April 26, and it has applied for renewal. The company notes that if it meets its obligations, "the governor-general shall renew the licences for another three years provided the company commits to drill an exploration well and (starts) the well before the end of the first renewal year, ie, by April 26, 2013".

So there is clearly some tension between the positions of the government and BPC, which claims to have invested $50 million so far to explore. Appraisal drilling is projected to cost several hundred million more, and obviously the company expects to benefit from this investment. But the petroleum act was written 40 years ago, and is silent on many of the complex issues the Bahamas would face as an oil producer.

Meanwhile, the DNA has rightly argued that oil drilling threatens two of the country's biggest industries - tourism and fishing. "(We) demand to know if Mr. Deveaux and the FNM government have ensured the protection of Bahamian interests," Ben Albury says. Well, the short answer is that Deveaux has repeatedly talked of the need to train Bahamians to manage a new regulatory environment.

"We have to come to the public with full information," Deveaux told me. "We want a standard of management similar to that of Norway. We need a petroleum directorate that is fully staffed with a range of expertise, including financial. If oil is produced we will be dealing with billions of dollars, changing the whole culture of the country and the way the government deals with money. It is no small thing."

In Norway, for example, surplus oil revenue is deposited in a $600 billion sovereign wealth fund so that the country's non-renewable resources can benefit future generations. The fund is managed by the central bank, under rules developed by the Ministry of Finance, and is responsible to parliament, with the interest used to cover government pension obligations.

Consultants have also advised the Bahamas to increase royalties and adopt profit sharing with oil companies in order to compensate for the absence of a corporate income tax.

As noted earlier, BPC's licenses were awarded by the Christie administration in 2006, and signed by former Governor-General Arthur Hanna in April, 2007. It is noteworthy that PLP candidate Jerome Gomez is the company's resident manager, former PLP cabinet minister Sean McWeeney is its senior counsel, and PLP deputy leader Brave Davis' law firm is the company's onshore legal advisor.

What is even more noteworthy is that the PLP has so far ignored this important public debate. The FNM's position is that "nothing can happen until the government approves and nothing will happen until there is public consultation". The DNA says it will hold a national referendum on oil exploration and production. The PLP is heavily conflicted in this matter and has said nothing.

Did someone mention carve-up and cover-up?

* What do you think? Send comments to larry@tribunemedia.net or visit www.bahamapundit.com.

March 21, 2012

tribune242

Bahamas Blog International

BPC Shares tumbled after the surprise announcement that the government was suspending consideration of exploration licences in The Bahamas

Govt's "no to oil" shock hits BPC shares
By SCOTT ARMSTRONG
Guardian Business Editor
scott@nasguard.com
twitter.com/guardianbiz:



Shares in the company dedicated to drilling for oil in The Bahamas have tumbled after the surprise announcement that the government was suspending consideration of exploration licences.

BPC was due tomorrow to change its name to Bahamas Petroleum Company, and had expressed its desire to be listed on the BISX so that shares in the company could be sold domestically. BPC believes there could be as much as$12 billion in oil revenue underneath Bahamian waters waiting to be brought up, specifically in the area called Cay Sal Bank.

The company estimates that an oil industry could create around 15,000 jobs for The Bahamas, and to that end teamed up with Norwegian oil giant Statoil, insisting their partner had created the highest safety standard in the world for drilling, one which every other exploration would soon be forced to follow in the wake of the Gulf of Mexico spill.

But despite the assurance that The Bahamas had the'safest'company on board, the Minister for the Environment Dr. Earl Deveaux yesterday put on hold the exploration licence process, saying the government wanted to make sure it had a stringent set of environmental rules in place before it considered applications, and added it would also review all existing licences.

In the wake of that announcement shares in BPC, which owns five exploration licences in Bahamian waters to the east of Florida and Cuba, fell by 27 percent from 4.08 pence to 2.98 pence on the London Stock Exchange's Alternative Investment Market(AIM).

That took the estimated value of the company from$45 million to$39.4 million.

The move by The Bahamas follows the U.S. issue of a six-month ban on deepwater drilling in the Gulf of Mexico in July, after the explosion of a BP well caused the world's worst offshore oil accident.

BPC is reported to have said it would continue to analyse seismic data on its existing licences as it has not yet established a definitive drilling program.

A report on Reuters quoted the company as saying that drilling on BPC's Bahamian acreage did not face the same geological risks as those found in the Gulf of Mexico.

A spokesperson for Statoil told Reuters said the company was viewing the suspension as a"postponement".

BPC believes there could be multiple 500 million barrel fields in the 2.5 million acres it wants to explore.

Deveaux said yesterday: "The Ministry of the Environment has suspended consideration of all applications for oil exploration and drilling in the waters of The Bahamas. The ministry seeks, by this decision, to maintain and safeguard an unpolluted marine environment for The Bahamas notwithstanding the potential financial benefits of oil exploration.

"We are not seeking to interfere with any existing licenses and the people who have licenses know of the policy. The recent events showed us that(a)oil if it is to be found, will likely be in the marine environment and(b)we want to maintain an unpolluted environment.

"And so before we explore for oil we want to have the most stringent environmental protocols in place."

9/1/2010

thenassauguardian

Bahamas Blog International

Bahamas Government has suspended the consideration process for all oil exploration and drilling applications...

Govt suspends consideration process for oil exploration
By TANEKA THOMPSON
Tribune Staff Reporter
tthompson@tribunemedia.net:



GOVERNMENT has suspended the consideration process for all oil exploration and drilling applications until the country has stringent environmental protocols in place to mitigate against a catastrophic oil well leak.

According to Environment Minister Earl Deveaux, the new stipulation comes in response to British Petroleum's (BP) devastating oil leak in the Gulf of Mexico - which threatened fragile marine ecosystems and fishing industries - and the large volume of oil exploration applications inundating the government.

"The Ministry of the Environment has suspended consideration of all applications for oil exploration and drillings in the waters of the Bahamas. The ministry seeks, by this decision, to maintain and safeguard an unpolluted marine environment for the Bahamas notwithstanding the potential financial benefits of oil explorations," said a statement released by Dr Deveaux yesterday.

The release added that all existing licenses will be reviewed to ascertain any legal entitlement for renewal.

"We are not seeking to interfere with any existing licenses and the people who have licenses know of the policy. The recent events showed us that (a) oil if it is to be found, will likely be in the marine environment and (b) we want to maintain an unpolluted environment.

"And so before we explore for oil we want to have the most stringent environmental protocols in place," said Mr Deveaux when asked to clarify this point yesterday.

BPC Ltd recently partnered with Norwegian oil heavyweight Statoil to search for oil in some 2.5 million acres in Cay Sal Bank and hold five licenses for oil exploration. The government has not issued any licenses for oil drilling in Bahamian waters.

Environment Permanent Secretary Ronald Thompson said that while the ministry has yet to draft the necessary safety protocols, government will frame its future policies around existing ones from other countries.

"We haven't drafted any but there are ones that are in existence in other places where oil is currently being harvested or explored. We will in short order review all of those and come up with what we think will be the best (policies) for the Bahamas," said Mr Thompson.

Deepwater Horizon's oil rig exploded on April 20, killing 11 workers, and leaking an estimated 4.9 million barrels of oil from BP's underwater well.

Yesterday's statement said that calamity underscored the need for precautions.

"Given recent events involving oil exploration and the efforts to prevent pollution, this prudent safeguard is essential to preserving the most vital natural resource of the Bahamas - its environment," said the statement.

Speaking to The Tribune, Mr Deveaux said more stringent protocols could have prevented BP's disaster. "Everything we learned about BP suggests that there were a few mishaps that could have been avoided," he said.

In May, Dr Deveaux said it would be "impractical and unreasonable" for the Bahamas to shy away from oil exploration or drilling as a consequence of the environmentally devastating oil leak off the coast of the US state of Louisiana.

"The world is not going to shy away from oil because of this accident. This is not the first or the last," he said at the time.

He also said earlier that proper management of resources would be vital to any oil discovery in Bahamian waters.

August 31, 2010

tribune242

Bahamas Blog International

There is a "very, very high possibility" that oil will be found in Bahamian territory as a result of exploration currently underway

'Very high possibility' oil will be found in Bahamian territory
By ALISON LOWE
Tribune Staff Reporter
alowe@tribunemedia.net:


THERE is a "very, very high possibility" that oil will be found in Bahamian territory as a result of exploration currently underway, Environment Minister Earl Deveaux has said.

Meanwhile, the environment minister stated that the catastrophic consequences of the recent Deepwater Horizon oil spill in the Gulf of Mexico will "directly affect (The Bahamas government's) approach" to how it manages any oil or gas resources that are discovered.

"We would have the top experts in the world advising us and would certainly look for the best in class to ensure our oversight of any oil exploration or drilling in The Bahamas is done with the highest safeguards," said Dr Deveaux.

He said his understanding about the likelihood of oil being found in Bahamian territory, where a number of companies currently hold licenses for such activity, is based on conversations he has had with persons involved in the industry, who have to come to his Ministry to seek permission to go ahead with exploration in The Bahamas, and from findings in neighbouring countries like Cuba.

Dr Deveaux said it would be "impractical and unreasonable" to say that the Bahamas would shy away from oil exploration or drilling as a consequence of the potentially environmentally-devastating oil spill that officials are currently seeking to contain off the coast of the US state of Louisiana.

"The world is not going to shy away from oil because of this accident. This is not the first or the last," he added.

While such comments may not be news to the ears of environmentally-conscious Bahamians who would fear the impact of an oil spill in Bahamian waters, other comments from the US Coast Guard official overseeing the Gulf of Mexico oil spill may be.

Commandant Admiral Thad Allen yesterday told the US-based CBS news show "Face the Nation" that there is at present a "very, very low probability" that the oil slick released from the Deepwater Horizon spill will travel around the Florida coast and affect the east coast of the United States.

Fears had been raised that if the slick were to come in contact with the "loop current" - a warm ocean current that moves clockwise through the Caribbean Basin to the Gulf of Mexico and then the Florida Straits - Bahamian waters and islands could be affected.

While the situation remains relatively unpredictable, Commandant Admiral Allen told the Sunday morning news show that the loop current "is significantly south of the southern edge of the spill right now."

"I think it is a very, very low probability it will be impacted," Allen added, noting that the National Oceanic and Atmospheric Administration is studying the issue. "It does not appear to be a threat right now," he said.

At present it is estimated that 5,000 barrels or 210,000 gallons of oil are being emitted from the site of the Deepwater Horizon oil well, following the explosion and subsequent collapse of the oil rig there, which is licensed to British energy company, British Petroleum.

Efforts to stymie the flow of the oil were setback over the weekend after plans to drop a 98 ton "containment dome" over the oil leak and siphon oil to the surface did not go as planned.

The placement of the dome was postponed after engineers noticed a build-up of crystallised gas inside the chamber.

Commandant Admiral Allen stated that officials are now considering using a "junk shot" to stem the flow of oil.

This would involve shooting a mix of debris - including shredded tyres and golf balls - into the well at high pressure to clog it.

Meanwhile, crews have begun to drill a relief well into which oil from the original well could be channelled, but this is estimated to take between one and a half to three months.

May 10, 2010

tribune242

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