The Tribune

By NEIL HARTNELL

Tribune Business Editor

SENIOR officials at the Bahamas Petroleum Company were tight-lipped yesterday, following remarks by Prime Minister Hubert Ingraham that, if re-elected to office, the Free National Movement (FNM) would not permit oil drilling and exploration in Bahamian waters.

The Prime Minister's policy stance, on the surface, appears to be potentially fatal for the company's plans, but Bahamas Petroleum Company officials resolutely refused to respond yesterday, not wanting to be dragged into a politically-laced row with a general election looming.

Simon Potter, Bahamas Petroleum Company's chief executive, declined to comment when contacted by Tribune Business. Dr Paul Gucwa, its Bahamas-based chief operating officer, merely said: "I'd rather not comment on what people say during election season.

"Our licence gives us the obligation of drilling a well. We are required under our licence to drill a well, and we are preparing to do that."

The Bahamas Petroleum Company has to "spud a well" by April 26, 2013, and has already notified the Government of its intent to renew its existing licences for a further three-year period. Those existing licences expire in six days time, on April 26, 2012.

In its recent 2011 results announcement, the Bahamas Petroleum Company said: "The group has given notice to the Government of the Commonwealth of the Bahamas of its intention to renew the licences for a further three-year period, precipitating the requirement that the group spud a well by 26 April, 2013, in order that these licences remain valid.

"The Group is required under the exploration licences to remit annual rentals in advance to the Government of the Commonwealth of the Bahamas in respect of the licenced areas. By letter dated 20 March, 2008, the Government of the Commonwealth of the Bahamas approved a two-year extension to the existing three-year licence period, which now expires on 26 April 2012."

Mr Ingraham's remarks seemed designed to draw a clear difference between his party's and the PLP's likely policy on oil drilling and exploration in Bahamian waters, as he highlighted the fact that the Bahamas Petroleum Company's attorneys, as listed on its website, are PLP deputy leader Philip Davis's law firm, plus Sean McWeeney at Graham, Thompson & Co.

The PLP's Killarney candidate, Jerome Gomez, was also the firm's Bahamas resident country manager before it set up its own office in this nation.

Above all, Mr Ingraham's comments highlight the scepticism both major political parties are thought to harbour towards permitting oil and other energy-related activities in the Bahamas.

Apart from fearing the potential environmental and tourism impacts from an accident, both the FNM and PLP are thought to be concerned about whether the Bahamas can implement a supervisory and regulatory regime to oversee these activities. Permitting oil exploration activities in the Bahamas was not mentioned in the FNM's Manifesto.

The Prime Minister's remarks, though, are likely to be interpreted negatively by the Bahamas Petroleum Company's shareholders/investors, and potentially chill its current activities, which include testing the 2D and 3D data it has gathered and negotiating with potential drilling joint venture partners.

They are also likely to delay, at the very least, plans for the Bahamas Petroleum Company's Bahamian Depository Receipt (BDR) offering to Bahamian investors.

The Bahamas Petroleum Company has been working hard to Bahamianise itself, having recently appointed former Royal Bank of Canada country and Caribbean head, Ross McDonald, as a non-executive director.

Tribune Business understands that a second person being considered for a directorship was former sBFSB chief executive, Wendy Warren, but she was said by sources to have backed away from this. The Bahamas Petroleum Company is also thought to be considering moving offices from east Nassau's Montague Sterling Centre to out west in the Lyford Cay area.