The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Bahamas could turn “oil into cash” and finance renewable energies from the royalties generated if ‘black gold’ is discovered beneath this nation’s waters, an oil explorer suggested yesterday.

Bahamas Petroleum Company (BPC) chief executive, Simon Potter, said such a move would be critical to the Bahamas’ energy security.

Mr Potter, a speaker at an energy security seminar hosted by the Bahamas Electricity Corporation (BEC), said there was a premium placed on locally-generated energy, or oil.

BPC is aiming to drill for oil in the Bahamas, and has spent $50 million to date on the venture. Mr Potter said that if commercial quantities were discovered, the Government would take 25 per cent “off the top” and could use these revenues to invest in alternative energy sources.

“In my view, to be able to move energy around becomes quite inefficient. There is a premium, in my view, for locally generated energy, of which there are many options,” Mr Potter explained.

“There is solar, wind, and energy from sea, but these are expensive. They need development and they need to be invested in. What better way to provide those sources of energy to the people here in the Bahamas than through an oil revenue stream.”

The Government has announced it will permit BPC to engage in exploratory drilling to determine whether there are commercial quantities of oil in the Bahamas prior to any referendum, noting it was unlikely that the latter would be held prior to the 2015 second half.

Mr Potter said BPC supported the Government’s efforts to strengthen and modernise the country’s petroleum regulations.

“We have put together our own Environmental Impact Assessment, taking into account what we believe to be international standards. We are very confident that our plans will comply with new regulations, which we welcome and look forward to, making sure our future plans are in full compliance,” said Mr Potter.

“We spent $50 million to-date on remote exploration, but we will now need to drill a well. We have important data we need to incorporate into our well plans. It will take us a year to plan that well safely to execute in the latter half of 2014, and that’s when we will really see if we have commercial reserves of oil or not.

“As we go forward it will probably be a five to seven-year process while we look at the development options and, during that period, that gives us the opportunity to help develop, train and encourage skills in the Bahamas, as well as the support skills and services that could support such a new industry.”

Mr Potter said BPC was still looking to secure a joint venture partner going forward.

“We have two major sources of funding capital, the shareholders and a partner who finds the prospects of finding oil in the Bahamas equally high as I do, in which they would pay a premium to come in and join us in our license,” he explained.

“There has been interest amongst companies that do see a similar technical attractiveness to the prospectivity of the rocks here in the Bahamas.”

Mr Potter said BPC was hoping to bring its Bahamian Depository Receipt (BDR) share offering to the local investor market in the next few months.