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

Since the Bahamian government’s recent announcement that exploratory oil drilling would be allowed prior to a referendum on the issue ...controversy has erupted along several fronts

The great oil debate

To drill or not to drill is the question

BY JUAN McCARTNEY
Guardian Senior Reporter
juan@nasguard.com

If Bahamas Petroleum Company’s (BPC) calculations are correct, there is a super-giant oil field lying beneath Bahamian waters.

All that needs to be done to get the nearly nine billion barrels of oil it believes is likely there, is to figure out exactly where it is, and go get it without spilling a single drop in the ocean.

If only life were that simple.

Since the government’s recent announcement that exploratory oil drilling would be allowed prior to a referendum on the issue, controversy has erupted along several fronts.

The referendum issue

Perhaps having had its reputation savaged in the gambling referendum in January, the Progressive Liberal Party (PLP) had no wish to risk another fiasco and so opted to take a different route – see if any significant amount of oil is there, and then see how the Bahamian people feel about taking it out of the ground.

BPC maintains it will spud an exploratory well around this time next year, and the government says it will hold a referendum on the actual extraction of any oil in the latter part of 2015.

Yes, the PLP backtracked on its original promise, but is this not a considered, logical position to take in light of the fact that Russian companies are drilling for oil just miles away from our border with Cuba?

Not really, says Free National Movement Chairman Darron Cash.

In fact, Cash contends, it all seems a bit rushed.

“Given the national and international attention that the government knew this matter would receive, the minister of the environment (Ken Dorsett) should not have announced the government’s policy reversal until the proposed legislative changes and the regulatory framework could be disclosed at the same time. It is not constructive to the process that the debate has begun in earnest but there is an information vacuum,” he said last week.

“There is no information packet available, no statement of Government principles, no answers to frequently asked or anticipated questions, no secretariat and no readily available environmental impact studies.”

Cash, who may or may not be familiar with the Internet, is wrong that no environmental impact assessment has been made public.

It’s been out for a year, and the Bahamas Environment, Science and Technology (BEST) Commission has it on the front page of its website.

It’s over 400 pages long and extraordinarily detailed, but more about that later.

Cash is right however, about the lack of regulations and legislation being in place.

According to a letter BEST wrote to BPC Environmental Scientist Roberta Quant on February 15, 2012, there are no specific standards for gas and oil exploration in The Bahamas.

BEST deferred establishing those standards until widespread national consultation and a required regulatory review takes place.

Last week, Dorsett said new regulations to support oil exploration "are substantially complete" and will soon be presented to Cabinet.

It is expected that they would be tabled and debated in Parliament before ultimately going into effect before BPC begins its exploration.

That would be quite a step beyond where the Christie administration was willing to go with regard to the gambling referendum.

In the run-up to that debacle, Bahamians were simply expected to trust the government and the numbers houses’ good intentions with little detail.

Hopefully, Cabinet won’t make that mistake again.

Show me the money

Possibly years away from seeing any oil, Bahamians last week flooded talk shows and social media with the concern that somehow The Bahamas was getting the short end of the stick with regard to oil royalties.

That depends on how you look at it. According to the proposed production license, the royalties paid to the government increase on a sliding scale.

If up to 75,000 barrels of oil are produced per day (bopd), then the royalty rate would be 12.5 percent.

For oil production over 75,000 up to 150,000 bopd, the royalty rate would be 15 percent.

For oil production over 150,000 bopd up to 250,000 bopd, the royalty rate would be 17.5 percent.

For oil production over 250,000 bopd up to 350,000 bopd, the royalty rate would be 20 percent.

For oil production in excess of 350,000 bopd, the royalty rate would be 25 percent.

The royalty rate on any amount of gas production would be 12.5 percent.

BPC has five licenses that cover an area of nearly four million acres in total.

It is also required to pay the government $0.92 per acre per year for its leases.

However, these payments are deductible from royalty payments.

BPC is also surely ecstatic that there is no corporate income tax in The Bahamas.

It is unclear how value added tax would impact oil drilling and or production.

The company has invested nearly $50 million so far; mostly in seismic research.

It says an exploratory drill would cost another $120 million.

It is unclear what The Bahamas has invested so far, but preliminary indicators suggest that the country has spent nothing on BPC’s venture.

That seems like a pretty good return on investment.

However, when you look at what other countries rake in in pre-tax oil revenues, what is proposed would pretty much make The Bahamas the lowest recipient outside of Ireland.

Environmental concerns

The thing most people seemed to be concerned about is an oil spill.

BPC’s research indicates that an oil spill taking place at the location where drilling will most likely take place would have “a major impact on the Cuban coastlines in the vicinity of the release point”.

“Particular wind conditions may allow for transport of small quantities of oil to the west, where it can eventually be advected by the Florida current and potentially affect the Florida or eastern U.S. coasts, or the Western Bahama Islands.

“In case of a seabed spill, it is expected that some oil will surface at a distance from the initial spill due to intense deep dynamics along the Great Bahama Bank. This would favor a wide spread of oil, with possible impact further on the Cuban coast, but also on the Florida or Eastern U.S. coasts, or the Western Bahama Islands.”

BPC’s political ties

Though the PLP tries to downplay it, there is no getting around the fact that Prime Minister Perry Christie, Deputy Prime Minister Philip Brave Davis and Senator Jerome Gomez were all closely linked to BPC prior to the general election.

Davis was its lawyer, Christie a consultant and Gomez the resident director.

All three men have since said they no longer have ties to the company.

But that hasn’t stopped the FNM from asking serious questions.

The Opposition has asked for full disclosure. Davis has expressed annoyance at the line of questioning and pledged to act in the best interest of the Bahamian people.

Gomez addressed the issue last week, though both men stopped short of full disclosure.

Christie said he will address the matter in the House of Assembly today.

Whether there is oil underneath the sea remains to be seen, but what seems clear is that the great oil debate is just getting started.

March 18, 2013

thenassauguardian

Caribbean Blog International

Kenred Dorsett, the minister of the environment and housing - said that he could not confirm a date for the oil drilling referendum ...as Prime Minister Perry Christie has yet to make a formal decision on the matter

Dorsett: No timetable for oil referendum

Minister committed, however, to building political consensus prior to vote



BY JEFFREY TODD
Guardian Business Editor
jeffrey@nasguard.com




The government has no specific timeline for an oil drilling referendum, according to the Ministry of the Environment.

With the country still buzzing from this week's gambling referendum, many Bahamians are wondering when oil exploration will once again be placed on the radar.

Kenred Dorsett, the minister of the environment and housing, said he could not confirm a date for the referendum, as Prime Minister Perry Christie has yet to make a formal decision on the matter.  However, he did note that the government is seeking to develop a more formal consensus on oil exploration before a vote goes to the people.

"I'm not sure if it will be a summer referendum.  I don't know when it will take place," he told Guardian Business yesterday.  "But I do hope there will be a consensus on the issue.  There are members on the other side that who tell me we should be drilling now.  I think, as a minister responsible, I am mandated to ensue there is a current balance, particularly as we look at those efforts."

He added that the government is "getting to the point" where some of the proposed regulations on how to remodel the industry may come to fruition.  After that, he told Guardian Business there would be a "broad discussion" on the issue of drilling in The Bahamas.

The minister's comments come shortly after business leaders expressed hope that the government would approach the oil drilling referendum "differently" than gambling.

While the "Vote No" campaign was victorious last Monday, observers noted that low turnout and general apathy impacted the democratic process.  The government was frequently criticized for being unclear in the referendum questions and failing to introduce specific legislation to back up the possible legalization of gaming.  The vote also became highly politicized, promoting rival parties to endorse opposing views.

"Oil drilling is not a moral or religious issue, it will be a matter of whether you can explain the economic advantages and technical reasons why the environment can be protected," said Richard Coulson, a well-known financial consultant.  "If those points can be explained, there should be no problem."

Peter Turnquest, the minister for East Grand Bahama, urged the government to bring forth legislation in the event of a yes or no vote for oil drilling to build a consensus in the House of Assembly.

After that, the government can embark a "period of education" for the general public.

In regards to public confusion and politicizing of oil drilling, Dorsett told Guardian Business: "I don't want that to happen."

But he stopped short in saying the government would bring forth specific legislation in the House of Assembly.

Guardian Business understands that the issue must be revisited by the prime minister before any decisions can be made on the future of oil drilling in The Bahamas.

February 01, 2013

thenassauguardian

Caribbean Blog International

Senator Jerome Gomez says that he plans to vote yes when the government brings a referendum on whether or not The Bahamas should drill for oil

Senator to vote ‘yes’ on oil drilling referendum

By Travis Cartwright-Carroll
Guardian Staff Reporter
travis@nasguard.com

Progressive Liberal Party (PLP) Senator Jerome Gomez said yesterday that he plans to vote yes when the government brings a referendum on whether or not the country should drill for oil.

Gomez said that on the January 28 gambling referendum he is not sure how he will vote, but he is more than certain how he will vote on the oil referendum.

Gomez said he is “convinced that oil is in The Bahamas, having worked for an oil company in the past”.

He made those remarks during his contribution to the debate on the Constitutional Referendum Amendment Bill.  He voted in favor of the bill.

Before the May 7 general election then Opposition Leader Perry Christie drew headlines when he confirmed that he was a legal consultant for Davis & Co., the law firm that represented the Bahamas Petroleum Company (BPC).

BPC wants government approval to drill an oil well in Bahamian waters by April 2013.

It was former Prime Minister Hubert Ingraham who revealed Christie’s involvement with BPC.

Christie later said that his professional relationship with the law firm was severed “well before” the controversy erupted.

Gomez, who ran in Killarney during the election, was resident manager for BPC according to the company’s website.  He has never publicly commented on that relationship since entering politics.

Dec 07, 2012

thenassauguardian

Caribbean Blog International

NO to oil drilling in Bahamian waters...

Caution needed on the oil drilling issue

Dear Editor,

With the recent announcement that Bahamas Petroleum Company has been granted a three-year license extension, it seems as if this government is moving full steam ahead with plans to facilitate a referendum which, if passed, will allow oil drilling in our waters.

I sincerely hope that if this happens, we will not allow the possible financial gains to cloud our judgment.  When making decisions, the wise thing to do would be to look at the risks versus the rewards.  In this case, I think the risks far outweigh the rewards.

Not so long ago, we witnessed first-hand the worst oil spill in history in the Gulf of Mexico and saw the catastrophic results it has brought on the environment.  Here are some horrifying facts to think about:

1. It is estimated (conservatively) that between 17 and 29 million gallons of oil spilled into the Gulf.

2. The National Wildlife Federation reports that already more than 150 threatened or endangered sea turtles are dead, and 316 sea birds, mostly brown pelicans and northern gannets, have been found dead along the Gulf Coast as a result of the spreading oil.

3. As much as we’d like to forget it, we live in a hurricane zone, and if a storm blows in, the result could be devastating.  The presence of oil could lead to a more powerful hurricane because crude accumulating at the surface could be raising the temperature of the surrounding water.

4. Approximately 70 cents of every dollar we spend is derived from tourism.  If we were to have an oil spill in our waters, this would devastate the tourism industry.

5. The great United States of America with all the technology and resources available to it could not contain this oil spill for months.  Could you imagine what would happen in our case, with little to no resources to deal with this kind of catastrophe?

With this knowledge, it is mind-boggling that any Bahamian government would even consider this undertaking.  I understand that this administration is under tremendous pressure to create jobs, but please don’t allow the greedy oil companies to destroy this country.  Future generations are depending on you, Mr. Prime Minister to make the right call on this one.

 

– Ervin Missick

Sep 12, 2012

thenassauguardian

Caribbean Blog International

Official Opposition Leader - Dr. Hubert Minnis called on Prime Minister Perry Christie to find the “testicular fortitude” ...and make a decision with regards to the licensing of offshore oil drilling ...without having to “pass the buck” to the Bahamian people via a national referendum

Minnis Puts Ball In Plp Court Over Oil


By Tribune242


WITH the Bahamas Petroleum Company fulfilling all its required licence and regulatory obligations for another three year licence, FNM Leader Dr Hubert Minnis called on Prime Minister Perry Christie yesterday to find the “testicular fortitude” and make a decision with regards to the licensing of offshore oil drilling without having to “pass the buck” to the Bahamian people via a national referendum.

Highlighting that nearly 75 per cent of the Bahamian workforce is related to Tourism, Dr Minnis said that his party remains concerned about the prospects of BPC and the possible impact a spill in Bahamian waters would have on the nation’s number one industry.

“We have serious concerns about the environment and where are the regulations that would protect us if an accident were to occur. Where are the regulations with respect to how any proceeds from this venture would be handled? And what are we going to do with the money? That money, and that oil belongs to the people. It should be protected for future generations. And the people should have a say in what is done with it,” Dr Minnis said.

The Free National Movement’s leader also questioned whether or not Mr Christie ever returned the consultancy fees that he admitted receiving from BPC.

“We demand that the Government immediately disclose whether or not the law firm of Davis & Co. or any other law firm owned by a PLP cabinet minister or parliamentarian (still) acts on behalf of BPC.

“We remind Mr Christie that the most precious resources we have, apart from our people, are marine, touristic and fisheries resources. They should not be recklessly endangered, and the FNM will not permit potentially compromised decision-making, and lax regulatory oversight of oil drilling to compromise and endanger the well-being of Bahamian fishermen, hoteliers and communities,” Dr Minnis said.

With regards to the upcoming referendum on oil drilling, Dr Minnis challenged the Prime Minister to make up his own mind on the issue and act – and not pass the buck to the Bahamian public, as he, and his PLP party were elected to govern.

“Christie is revoking his responsibility to govern and is passing the buck. You were voted in to make a decision. So make a decision. You are vicitimizing people left, right and centre. You didn’t ask me about that. You can’t be a government of referendum. Being in government means you have to make decisions. He is copping out. I wonder if he has the testicular fortitude to make tough decisions,” he asked.

In fact, the FNM said that if Mr Christie and his government were so “frightened to lead” that they should hold a referendum on their governance thus far and allow the Bahamian people to vote on that.

“Have a referendum on whether or not we made a mistake in putting you there. If we vote ‘Yes’, then go,” he exclaimed.

September 11, 2012

Tribune 242

Caribbean Blog International

...major uncertainties remain concerning oil drilling in The Bahamas

IMF: Bahamas faces ‘not just an oil find’

By Jeffrey Todd
Guardian Business Editor
jeffrey@nasguard.com

The International Monetary Fund (IMF) says the size of any oil deposit lurking beneath Bahamian waters is essential to any decision on whether to commence commercial drilling.

Gene Leon, mission chief to The Bahamas, felt there were myriad factors and concerns for this potentially billion-dollar question. How much is there, and how long the benefit will last, must be taken into account and weighed against the possibility of any detrimental impact on the country's coveted natural environment.

"There are clearly environmental concerns, and the flip side to an oil find is the tourism industry," he explained. "You don't want to be marred should a problem arise. There is always the question of how much, how long the benefit lasts, how to use those resources, and how to mitigate any environmental issues. These are big issues, and one must look at it in a holistic way. This is not just an oil find."

The comments by the IMF mission chief came at last week's conference in Trinidad and Tobago concerning rising Caribbean debt and limited prospects for growth. In The Bahamas, oil exploration has been a major revenue option burning a hole in the country's back pocket.

According to a report this summer by the United States Geological Survey (USGS), there is approximately a 50 percent chance it has 1.59 billion barrels of recoverable oil. It further determined there is a five percent chance it has 4.3 billion barrels, and a 95 percent chance of at least 554 million barrels.

Even if the find is on the lower end, the IMF mission chief noted that The Bahamas could consider using the resources just for “self sufficiency". Leon told Guardian Business that Barbados implemented a similar approach.

"It would certainly help. It (oil) is a fairly sizable chunk of your import bill," he added.

Of course, Bahamas Petroleum Company (BPC), along with its shareholders on the London Stock Exchange (LSE), hope any find spills into the billions, rather than millions.

BPC has invested seven figures over the past few years on seismic testing, staffing and expertise ahead of an exploratory drill south of Andros, near the Cuban border.

On the other side, a Russian drilling company is set to drill just 100km from this proposed site later this year.

While that might be  perceived as good news, major uncertainties remain concerning oil drilling in The Bahamas. The previous government suspended BPC's licenses back in May during the throws of the national election.

Guardian Business understands a statement is expected to be released by BPC today, however, indicating that the government will find them in full compliance. If so, that could mean renewed confidence for investors.

This uncertainty has been reflected in the share price of BPC in recent weeks. Trading on Friday saw share price dip below 6 pence per share for the first time since December 2011.

Shares managed to rally at the end of trading, however, finishing off the day at 6.50 pence. That compares with more than 24 pence per share early last year.

Sep 10, 2012

thenassauguardian

Caribbean Blog International

The promised referendum on oil drilling in The Bahamas is likely to be held some time in 2013 - according to Prime Minister Perry Christie

Oil Vote To Be Held Next Year


 
By CELESTE NIXON

Tribune Staff Reporter
cnixon@tribunemedia.net


THE promised referendum on oil drilling is likely to be held some time next year, Prime Minister Perry Christie said yesterday.

Speaking outside Cabinet yesterday, Mr Christie said the government hopes to tackle the issue in 2013, but only if certain other factors fall into place.

“We are continuing to talk to those people who are applicants,” he said, “but as I have indicated before, oil drilling will only take place if the Bahamian people approve it through a referendum.

“It will happen next year some time, and if in fact we are ready, as I anticipate to be with the constitutional review at the end of March. By then (the oil drilling issue) will have the developments that will enable us to look at the question of a referendum.”

Shortly after the election, Environment Minister Ken Dorsett said certain “assessments” had to take place before oil exploration could begin.

According to the 2011 annual report by the Bahamas Petroleum Company (BPC), the government is working towards establishing a regulatory framework for gas and oil extraction.

“Completion of the Bahamian elections ahead of their May 2012 deadline and timely progress towards implementation of revised laws, statutes and enabling regulations covering hydrocarbon exploration will promote accelerated activity,” he said. “The government is working to put the regulation in place to oversee oil and gas activity. We expect these regulations to be in place prior to our drilling.”

When the report was released in late May, Mr Dorsett said he could not comment on it.

“I haven’t read the report so I cannot comment on any statements they have made,” he said.

Tensions over oil drilling in the Bahamas increased in the weeks leading up to the election after it became known that Prime Minister Christie was a former consultant for the oil company’s Bahamian legal team.

Mr Christie said he was hired through the law firm of Davis & Co, which was headed by now Deputy Prime Minister Philip “Brave” Davis.

Graham Thompson & Co, of which former PLP attorney general Sean McWeeney is a partner, was also listed on the BPC’s website, as was PLP candidate for Killarney Jerome Gomez as its resident manager. However, Mr Gomez lost the Killarney constituency on May 7 to Dr. Hubert Minnis.

In late May, BPC said they are not discouraged by the fact that oil testing off the coast of Cuba yielded no results.

BPC chief operating officer Paul Gucwa said that while successful drilling in Cuba would have been encouraging, the results do not mean there is no oil in the Bahamas, nor does it affect oil drilling efforts.

Dr Gucwa added BPC intends to drill in a different geographical area and from their research it was not unexpected that the Scarabeo-9 drilling off the northwest of Cuba hit a dry well.

“A good result in their drilling would have been good news – however, from our research it was an expected result,” he said.

September 05, 2012   Tribune242  

Caribbean Blog International

The Christie-led government has remained noncommittal concerning oil drilling in The Bahamas

PM still committed to referendum on oil drilling

By Candia Dames
Guardian News Editor
candia@nasguard.com

While a referendum on oil drilling is not currently the priority of the Bahamas government, Prime Minister Perry Christie told The Nassau Guardian he remains committed to such a referendum.

But he said “there would have to be serious indications that there is oil and natural gas in commercial quantities”.

“I committed my party to if we are going to have oil drilling in The Bahamas while we are in power, we will do so by seeking the support of the people of The Bahamas, so the answer is yes,” said the prime minister when asked recently by The Nassau Guardian whether the referendum was still planned.

He said,  “One of the dangers for The Bahamas is that concessions are being given to explore in the same area by the Cuban government and it would be a very interesting development as they are in a position to start exploring and digging a well before us.

“If they were to find a well then it makes it almost a compelling case for The Bahamas having to do the same thing.  And so, we’re not going to look a gift horse in the mouth and play crazy with it.

“But at this particular time we have to continue to assess where we are on that subject matter to see whether in fact the company (Bahamas Petroleum Company) is in a position to finance drilling because it’s a huge sum of money involved in that.

“This is not a $50 million or $60 million kind of enterprise.  This is a hugely expensive enterprise, particularly with the environmental safeguards that should be in place.

“And so, at some stage or the other the company will come forth to us to say,  ‘listen, we are ready to do the following things and this is the evidence we have that you have fossil fuels there’ and we’ll see.”

Bahamas Petroleum Company (BPC) has committed to spudding its exploratory well in Bahamian waters by April 2013, although recent reports from the company indicate this drill date could be pushed back later in the year.

BPC is looking to bring on an operational and equity partner for the drill, The Nassau Guardian previously reported.

The Christie-led government has remained noncommittal concerning oil drilling in The Bahamas.

“We do believe that the Bahamian people ought to be consulted,” said Kenred Dorsett, the minister of the environment, previously. “Whether it goes the extent of a referendum, that will have to be determined based on the costs. That is a matter for the Cabinet to decide.”

Prior to the election in April, the previous government suspended BPC’s oil drilling licenses. There has been no formal announcement from the new government as to whether these licenses have been renewed.

The Christie administration has also committed to a referendum on gambling, which the prime minister has said will be called by the end of this year; and a constitutional referendum on citizenship matters, which the government intends to call before the end of the term.

Aug 13, 2012

thenassauguardian

Caribbean Blog International

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