The Oklahoma-based oil and natural gas exploration company that had been conducting seismic testing as a pre-cursor to oil exploration has halted any further work in waters of The Bahamas, a company executive and a cabinet minister both confirmed to The Bahama Journal yesterday.
The confirmation came almost three years after executives of the Kerr McGee company signed an oil and gas pact with the Christie Administration.
Spokesman for the company, John Christensen, explained that all of its commitments had been fulfilled and plans for The Bahamas would not progress any further.
“Consistent with our three-pronged strategy which includes highly focused exploration in proven world class hydro carbon basins, we have advised the Bahamian ministry that we would not proceed to the next exploration phase offshore Bahamas,” Mr. Christensen said.
“We have fulfilled all of our exploration commitments since acquiring the offshore licenses from the Bahamas government in June 2003.”
However, Mr. Christensen declined to say more.
Kerr McGeeﾒs website explained that the licenses, located in the Blake Plateau basin about 100 miles north of Freeport, Grand Bahamas Island, covered 6.5 million acres in water depths ranging from 650 feet to more than 7,000 feet.
The first phase of the companyﾒs work program for The Bahamas included acquisition and interpretation of seismic data.
When contacted on the issue Monday, Minister of Energy and Environment, Senator Dr. Marcus Bethel confirmed that Kerr McGee had indeed ceased any further exploration for oil in The Bahamas.
“They do not wish to fulfill any further terms of the lease. They were working on the lease that they have been working on,” Minister Bethel said.
“I think this means that they have conducted their seismic testing and I can only assume that the outcome would have suggested that there are probably not marketable supplies of oil in The Bahamas, so there is no need to proceed to the next stage, which would have involved possibly drilling for oil.”
The news came months after former Trade and Industry Minister Leslie Miller ﾖ who had responsibility for the matter – announced that Kerr McGee had completed its seismic testing and was recently approved to create a joint venture with Talisman, a Canadian based company involved in worldwide oil exploration.
Combined, he said, these companies have assets in excess of $30 billion.
Minister Miller stated that revenue earned from Kerr McGee had exceeded $3 million to date, and if the company were successful in finding oil, the public treasury would have receive between 12.5 percent and 25 percent of the revenue generated.
But hopes of for securing such a revenue base were apparently dashed with the new revelation.
“This is not an unusual situation when it comes to oil explorations in a global sense. Companies explore on the basis that there may be marketable supplies of oil in the location they are looking and so they would give projections on that because it has to be commercially sound. It has to be a business venture that would produce the kind of revenue to make it worthwhile,” Minister Bethel said.
“The government clearly understood that those projections were only predicated on the possibility that commercially available supplies of oil would be foundﾅ I suppose the situation is that there is always hope in a given proposal The Bahamas would be able to enjoy significant revenuesﾅBut this doesnﾒt mean that other oil companies may not also wish to do testing for oil in The Bahamas. So, we just have to deal with each issue as they come up.”
The government recently approved an oil exploration license for Bahamas Offshore Petroleum Limited, a subsidiary of an Australian oil exploration company with worldwide operations, officials had disclosed.
Minister Miller had projected that revenue from this venture would have amounted to $2 million over the next two years while the company conducts its seismic testing.
Late last year, the minister also reported that discussions were ongoing to reestablish an ultra modern refinery in Freeport at the BORCO site.
This proposed 500,000 barrel per day refinery would reportedly require an investment of $2 billion, and would lead to the creation of 800 plus full time jobs.
By: Macushla N. Pinder, The Bahama Journal
