The Government will not permit the Bahamas Petroleum Company (BPC) to drill an exploratory oil well prior to a referendum, a Cabinet Minister telling Tribune Business he was aiming “to advance” a regulatory regime for the industry by the 2013 first quarter.
Acknowledging that he was “not where I’d like to be” in terms of developing an oil exploration regulatory regime, Kenred Dorsett, minister of the environment and housing, said his ministry was working closely with the Attorney General’s Office to create a suitable framework.
He also confirmed that the Government would waive any penalties, and there would be no impact on BPC’s licences, if delays on the administration’s behalf – such as the referendum – prevented the company from hitting the April 26, 2013, date by which it had committed to ‘spud’ an exploratory well in Bahamian waters.
Several observers close to BPC suggested the company was hoping the Government might allow it to drill the exploratory well prior to a referendum, and was seeking to engage the Christie administration in talks on this.
They pointed out that it only made sense to hold a referendum on permitting oil exploration in Bahamian waters once it was proven that commercial quantities, which were extractable, existed. This is the very thing that an exploratory well would confirm.
Simon Potter, BPC’s chief executive, said he knew nothing of any efforts by the company to engage the Government on this issue when contacted by Tribune Business in the UK.
And, asked whether the Government might allow an exploratory well to be dug pre-referendum, Mr Dorsett replied: “No. I think that in our discussions with BPC it’s been on the basis that the referendum will take place prior to that.
“Those are the discussions they have been having with us as well. Both of us have been discussing that the exploratory well will be dug subsequent to that condition.”
Uncertainty, largely related to the referendum, given that its timing and wording are unknown, has been impacting BPC in recent weeks. Its share price on London’s Alternative Investment Market (AIM) has been dropping slowly but steadily, given the numerous unknowns surrounding the Government’s attitude and policy towards oil exploration in the Bahamas.
By Neil Hartnell
Tribune Business Editor
For the entire article, click here.