The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Some $900,000 raised from Bahamian investors will "adequately cover" the agreement reached by an oil explorer with the Minnis administration over outstanding licence fees.

Bahamas Petroleum Company (BPC), in a statement to the markets, said the BPC Investment Fund, which it created as a vehicle for Bahamians to invest in its shares only, has been approved for listing on the Bahamas International Securities Exchange (BISX).

It added that the Central Bank of The Bahamas' exchange control department has also approved the process through which BPC will receive the monies invested by Bahamians once the regulator has finished "vetting" the latter.

The oil explorer, which recently said COVID-19 has forced it to further delay plans to drill its first exploratory well in Bahamian waters south-west of Andros until October 2020, also disclosed that it had reached an "agreement in principle" with the government over unpaid licence fees for both the period to 2018 and subsequent two years to 2020.

While the sum agreed was not disclosed, BPC indicated it is below the $1m mark as it said the $900,000 raised from Bahamian investors in the BPC Investment Fund will be more than sufficient to cover what is due.

"The company has now received confirmation that the [BPC Investment] Fund has been approved for listing on the Bahamas International Stock Exchange (BISX), and that the Central Bank of the Bahamas exchange control division has approved the process by which BPC is to receive remittance of subscription funds. This is expected to take place shortly once the Central Bank has concluded the vetting of subscribing investors," BPC said.

"Thereafter, the company and the fund will complete the subscription process. The company will receive the subscription funds of approximately $0.9m, which have already been received into the fund's account, and admission of the fund shares to trading on [London's Alternative Investment Market] AIM will take place."

BPC added that itself and the government had "agreed a process seeking final agreement" on the outstanding licence fees at the time Environmental Authorisation was granted for the first exploratory well at end-February 2020.

"At the time, the parties had acknowledged that they would work collaboratively with a view to finalising this long outstanding matter within the next 60 days (by approximately the end of April 2020)," BPC said. "Subsequently, the company and the government reached agreement in principle in relation to this matter within the agreed timetable.

It added that the final agreement and payment now awaits confirmation by the Public Treasury that past payments recorded in BPC's audited financial statements in 2012 and 2015 were received.

"This confirmation process has been somewhat delayed owing to the State of Emergency declared, and ongoing business disruption caused, by the national response to the COVID-19 outbreak in The Bahamas," BPC added. "However, subject to said confirmation, the company expects that an appropriate side-letter agreement can be finalised in due course and the outstanding amount paid.

"The amount of outstanding fees is agreed in principle and is expected to be finalised shortly. The amount would be adequately covered by the proceeds of receipts from subscription for the fund shares which, as noted, is expected to be received shortly by the company."

BPC's oil exploration activities remain controversial with Bahamian public opinion split on the issue. Many observers continue to question whether the company is for real, while environmental activists and others fret about the impact any spill or pollution could have on the country's environment and tourism industry when it re-opens following COVID-19.

Environmentalists recently celebrated what they saw as a major victory as multiple Florida congressmen and women, including some close to the Trump administration, wrote to US secretary of state, Mike Pompeo, urging that he oppose BPC's oil exploration plans.

Others, though, argue that the economic crisis created by COVID-19 means that The Bahamas cannot afford to spurn the opportunity to discover whether commercial quantities of oil exist within its territorial waters given the potential positive impact this would have for the government's fiscal position and country overall.

However, "if" remains they key word regarding any prospect of discovery for the time being, with any prospect of economic diversification from BPC's activities still some way off regardless of whether oil is found. The company said the recent collapse in global oil prices will not affect its activities based on its belief the market will recover.