The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Petroleum Company (BPC) is “ready and willing” to proceed with its long-planned share offering to Bahamians, its departing chairman noting progress had been “frustrated” by the wait for approvals.

Writing in the oil explorer’s 2013 annual report, Adrian Collins told its shareholders: “Progress during the year towards completion of the proposed BDR (Bahamian Depository Receipt) programme to list on BISX has been frustrated by a number of prerequisite approvals which remain outstanding.

“Given the offshore regulatory environment has been under review and revision, the delay in approval for investment into our industry by those charged with governance of the economy, and therefore the public good, is understandable.

“We have every confidence that all such approvals shall be received once the enhanced regulations have been emplaced, and we remain as committed as ever to ensuring Bahamians are able to directly participate in the potential gains of oil exploration in their waters through representation on the company’s register of shareholders.”

Simon Potter, BPC’s chief executive, told Tribune Business yesterday that until the Government published its regulatory framework for oil exploration in the Bahamas, the Central Bank of the Bahamas and Securities Commission would be unlikely to approve any BDR issue to Bahamian investors.

“We have done all we can at this stage in terms of describing the offer and the prospectus,” Mr Potter said, adding that BPC’s advisers, RoyalFidelity Merchant Bank & Trust, had been in contact with the regulators.

“We’re informed that up until the time those regulations are published, those institutions are at this stage unwilling to move on the matter,” Mr Potter said.

Writing in BPC’s annual financial statements to shareholders, he further clarified: “What has been directly impacted by the lack of regulations is the company’s plan to seek a listing through the issue of BDRs in the local BISX register.

“It is not anticipated that the Securities Commission or the Central Bank of the Bahamas will be satisfied to allow consideration of this facility until the new regulations are published.”

Mr Potter agreed that until the regulations were published, BPC could not list all the specific risks facing the company in its BDR prospectus to Bahamian investors - an essential prerequisite for all public share offerings.

“It’s not on the back burner for us,” Mr Potter told Tribune Business of the BDR issue. “We’re happy to do it once the various regulators and authorities are happy for it to proceed forward.

“We’re ready and willing to proceed. From our perspective most of the prospectus is complete, so there’s nothing delaying us.”

Mr Collins, in the annual financials, wrote: “The economic slowdown has taken its toll on the Bahamian economy. With an unemployment rate of 15 per cent, sluggish growth and an increasing debt burden, the Government of the Bahamas continues to explore ways of restoring the country to financial health through the expansion of existing industries and creation of new ones.

“Given this context, it is with pleasure that I note recent significant movement by the Government in the provision of a suite of oil, environmental and health and safety regulations that have been presented to the Cabinet for review ahead of implementation.

“The Bahamas already has an active downstream oil sector, standing as a global leader in maritime activities and a regional force in storage and transportation of petroleum products. These new, modernised and strengthened regulations will provide the leadership, assurance and protection afforded by the adoption of modern global best practices, which will allow the fledgling exploration industry to responsibly expand activities.”