The Tribune

* Activists plan 'welcoming committee' for drill ship

* Say PM's anti-exploration stance 'awfully late'

* BPC shrugs off court threat with extra $20m

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Petroleum Company's (BPC) oil drilling ship will this morning likely face "a welcoming committee", as one activist charged: "The PM can shut the country down but not get out of a bad oil deal?"

Sam Duncombe, reEarth's president, told Tribune Business that oil exploration opponents planned to greet the Stena IceMAX with protests - COVID-19 curfews and restrictions permitting - after the vessel docks in Freeport at "daylight" this morning.

Acknowledging that the 10pm to 5am curfew will likely make it impossible to greet the drilling ship when it arrives at around 3am, Mrs Duncombe added that the Prime Minister's voicing of his personal opposition to oil exploration in Bahamian waters was welcome "but awfully late".

"We were planning a welcoming committee inviting them to go home," she said of the Stena IceMAX, adding that a further protest was planned for Nassau this coming weekend in conjunction with the Raising Awareness of The Bahamas Landfill (RABL) group at a yet-to-be-disclosed location.

Promising that location and other details will be revealed closer to the time, Mrs Duncombe told this newspaper: "We want to encourage Bahamians to fight for the things we feel are correct. The fact we were misled in May 2018 [by Romauld Ferreira, minister of the environment], and now the Prime Minister has come out saying he's against oil drilling......

"Obviously that's music to our ears, but at the same time it's awfully late. The reality is that the Prime Minister had the authority to shut down the entire country for the better part of a year, so I don't see why we cannot get out of a really bad oil deal."

Mrs Duncombe's comments refer to Dr Hubert Minnis' frequent imposition of life-changing COVID-19 lockdowns and curfews, set against his assertion that the administration received legal advice from the Attorney General's Office that it is "saddled with an agreement.... we could not get out of" when it comes to BPC's oil drilling plans.

Carl Bethel QC, the attorney general, backed the Prime Minister's position yesterday. He added that while Mr Ferreira believed BPC had failed to fulfill its licence obligations, and was thus "timed out" and that the agreements should be rescinded, Mr Bethel said a legal review found that these delays and unmet conditions had been caused by the Government.

In particular, BPC was forced to endure a long wait while the new regulatory regime for the petroleum industry and offshore oil exploration was put in place. This was finally completed by the Christie administration in 2016, and BPC's licences have been extended ever since through to mid-2021 despite the company and government having yet to settle outstanding fees.

Mrs Duncombe, though, said of the Prime Minister's position: "The leader of the country telling you he doesn't want you here, that gives a lot of courage to a lot of people. If they could shut down the country for a year they could shut down a bad oil deal. It's mind boggling."

And Fred Smith QC, the Callenders & Co attorney and partner representing the activists in their challenge to BPC's licences and permits, yesterday urged Mr Bethel to make the Government's legal advice available to the public and Supreme Court for the Judicial Review.

"If it's determined that the Government does not have an obligation with respect to those licences, then there's nothing to stop them considering extracting The Bahamas from this foolhardy, environmentally risky business," he told Tribune Business.

"This would be an enlightened opportunity for the Government to put all its cards on the table so people can see what this deal with BPC is all about. I find it odd that they say they are bound by these agreements."

Mr Smith added that he was also "heartened" by Mr Bethel's indication that BPC's licence agreements will be disclosed as part of the Judicial Review "discovery" process, and said: "Hopefully the Bahamian public will come to know what deal was struck behind closed doors, and in secret.

"The Bahamian people have a right to know what commercial contracts, of a paradigm shift in economic nature, the Government has struck with foreign companies that affect their future. The days of privileged oligarchic secrecy are over."

Activists, though, are rapidly running out of time to block BPC's drilling plans via Judicial Review challenge in the Supreme Court. An itinerary for the Stena IceMAX, dated September 9, 2020, reveals it plans to head for the drill site in waters 90 miles west of Andros as early as Thursday this week once essential supplies and all crew arrive over the next two days.

"The objective is to be ready to spud within 24 hours of arriving at the drilling location," the document confirms, indicating that BPC remains on target to begin drilling its Perseverance One exploratory well by Sunday, December 20, unless Waterkeepers Bahamas and the Coalition to Protect Clifton Bay successfully persuade the courts to intervene.

The court action has so far proved no obstacle to BPC's continued capital raising to obtain the finance necessary to undergird its activities in both The Bahamas and Trinidad & Tobago. The company, in a statement to the markets, totally ignored the legal threat by saying its Bahamian well will begin "imminently" after it accessed up to $20m in new funding from a "European alternative asset manager".

BPC, in a move that dilutes existing shareholders, including Bahamian investors in the mutual fund it created, is issuing 375m new shares to this "asset manager" at 2 UK pence per share in return for $10m upfront.

The oil explorer added that it also has the option to raise a further $5m from the same investor "within ten business days after the spud of the Perseverance One well" on the same terms, and can also seek an additional $5m on top of that for a grand total of $20m.

Should it raise the extra $10m from this "asset manager", BPC will have a $57.5m financial war chest and sufficient funding to just about cover both its planned Bahamian and Trinidadian activities - estimated to cover $55m at the top end - going into 2021.

"The company has, as previously announced, a planned 2021 work programme in Trinidad and Tobago and Suriname of between $15m and $25m, and a remaining cost associated with the Perseverance One well, net of amounts already prepaid, in the order of $19m-$23m (plus an identified $7m contingency, which may be fully required, in part, or not at all)," it added.

BPC's financial arrangements appear increasingly tied to seeing off the Judicial Review challenge quickly, as another £3m in financing from another source "has been committed, subject to spudding of Perseverance One by 28 December, 2020".

Simon Potter, BPC's chief executive, said in a statement: "2021 will be a busy year for BPC in pursuing operations that have the potential to create considerable value for the company..... In The Bahamas, we have the transformational Perseverance One well for which operations are expected to commence imminently.

"We are thus extremely pleased to have secured a further $10 million of immediate equity funding, along with the option to expand that to $15m and potentially to receive a total $20m from a leading European institutional investor.

"Not only will this additional liquidity, consistent with our overall funding strategy, give us the flexibility to continue to pursue an aggressive growth agenda at a pace determined by the company, but we consider this funding at this time to be a strong vote of confidence in BPC and the value embedded in the totality of our portfolio."