The Tribune

By TANYA SMITH-CARTWRIGHT

tsmith-cartwright@tribunemedia.net

BAHAMAS Petroleum Company has endorsed Prime Minister Dr Hubert Minnis’ recent statements about implementing a Sovereign Wealth Fund, saying such a fund can assist with paying off the national debt or better the lives of Bahamians.

BPC’s CEO Simon Potter said if the company finds commercial quantities of oil, royalties from its production would “provide exactly the kind of excess cash” the nation’s leader anticipates for a Sovereign Wealth Fund.

Dr Minnis, the keynote speaker of 2021 Business Outlook, said his administration will develop a Sovereign Wealth Fund which, among other things, will enshrine an accountable and transparent means for Bahamians to ensure national assets are deployed and developed for the benefit of the entire country.

In response, Mr Potter said a Sovereign Wealth Fund has the capacity to make money for the government and diversify the economy.

He said: “Four years ago, The Bahamas passed legislation to establish the framework for a Bahamian Sovereign Wealth Fund, an initiative which BPC actively supported. The many natural resources in The Bahamas, including its potential oil resource, have the capacity to add an entirely new income stream to the government of The Bahamas, thereby diversifying the economy and significantly broadening the government’s revenue base.

“We are thus delighted with Prime Minister Minnis’ statements today indicating how the Sovereign Wealth Fund will be brought to life. Royalty payments to the government, for instance if BPC were to find commercial quantities of oil from its exploratory well ‘Perseverance 1’ and thereafter bring that oil into production, would provide exactly the kind of excess cash the Prime Minister envisages to be paid into a Sovereign Wealth Fund.”

BPC said establishing such a fund would bring The Bahamas in line with similar funds maintained by other countries to enable accumulation of wealth for the national benefit from natural resources.

Mr Potter said: “Once established, such a wealth fund would allow the government a much greater degree of choice than currently exists to promote and safeguard the wellbeing of all Bahamians. Choices, for example, to pay down the national debt, or to invest in infrastructure and services that better the lives of its citizens; the possibilities are many.”

The company’s statement said that its management and professional teams have worked in countries or states that have benefited significantly from the establishment of a Sovereign Wealth Fund such as Norway, United Arab Emirates, Singapore, Alaska and East Timor.

BPC says these countries have successfully maintained Sovereign Wealth Funds created from the surplus income generated from oil and gas wealth and derived along-side buoyant and lucrative tourism income.

Mr Potter said: “Set aside in this manner as a form of ‘national savings,’ future income from a Sovereign Wealth Fund can directly benefit not only this generation but future generations through, as in other nations, an annual dividend payment to all citizens, infrastructure development, educational and vocational subsidies and the like. One of the world’s most well-known Sovereign Wealth Funds is that of Norway, which has seen tremendous wealth accumulated for the benefit of all Norwegians, as that country’s oil and gas resources have been successfully and safely developed over the past five decades.”

Despite fierce opposition from local and international activists, last month BPC began drilling an exploratory oil well in Bahamian waters.

In a letter to Prime Minister Dr Hubert Minnis and Environment Minister Romauld Ferreira, 17 members of the United States Congress asked that the government prevent the company from carrying out the oil exploration.

Dr Minnis has said the government cannot back out of the deal first agreed to by the Christie administration, suggesting it is iron clad, even though he does not support oil drilling.

A judicial review launched by activists in the Supreme Court is underway, however the oil drilling has not been halted.