The Agreement provides for the company to drill in 3,000 to 6,000 or more feet of water, making it the first venture that will explore in deep waters in The Bahamas. The cost to Kerr McGee to dig a well would be $20 million to $25 million.
And, according to Prime Minister Perry Christie “obviously there is sufficient evidence available to them” to cause them to make this approach, and Bahamians will know in the not too distant future whether they will go to the stage beyond the surveys.
He said if the company is prepared to spend a substantial sum of money just to confirm the presence of natural gas and oil, then they must have a reasonable belief of what and where it is.
Mr. Christie said The Bahamas has had a long tradition of receiving, processing and approving applications for the exploration of oil, however, the applications did not continue after seismic surveys were done and the conclusion was reached that no further effort ought to be made to determine whether oil existed.
The Prime Minister said there has always been a concern that any intervention which could threaten the pristine environment of the country ought to be carefully considered because of the tourism lifeline.
He said the business of tourism is heavily based on the waters, fisheries, beaches, landscape and oceanscape, and that only in the most compelling circumstances should the country make decisions that will go contrary to the philosophy and purpose of the major industry that has given Bahamians a comfortable way of life.
“We have always been satisfied that the current legislation enabling the procedures used by oil exploration companies to properly, effectively and from an environmental point of view efficiently protect our environment,” said the Prime Minister. He said because of a greater awareness, a greater sense of involvement in the affairs of the country by the people, environmental matters are much more relevant, and much more focussed.
Mr. Christie said the process of negotiating the licensing agreement with Kerr McGee was not an easy one because ultimately the parties to the licensing agreement agreed to a precedent-setting agreement, one that had not been negotiated before, one which went beyond the requirements of the legislation and one which was particularly conscious of the need to be seen to have provisions included in the agreement that were manifested in the best interest of conservation and protection of our environment.
He said new provisions, new requirements and new obligations were negotiated which include conducting an environmental impact assessment. The fact that Kerr McGee with its internationally recognised commitment to preserving the environment was sufficiently flexible to understand the requirements of our country and to agree to them is noteworthy and deserving of commendation.
“It is important that we have to be continually aware of matters of the environment that must necessarily always remain before us because the entire way of life of our country, the high quality so many Bahamians have come to enjoy have been fuelled in the main by the tourism industry. And we have spent well near to a $1 billion marketing ‘Its better In The Bahamas,’ … and we have an obligation always to ensure in whatever opportunities that are presented to us, that we do not compromise the ability of The Bahamas to continue to attract millions of people worldwide who will come here for a distinctive experience, which we believe our country offers more so than many others in the world,” Prime Minister Christie said.
Under the agreement, if oil is discovered The Bahamas will receive 25 per cent over 300,000 barrels.
Accordingly, Trade and Industry Minister, Leslie Miller, said it has been sort of a “rough ride” over the last several months with Kerr McGee and the Government negotiating for the rights to explore for hyrdro carbons in Bahamian waters.
“Hopefully in the very near future, Kerr McGee will make a value attempt to explore for natural gas and oil in the Great Bahama Bank. This is a company that is world renowned that has explored for oil in the Gulf of Mexico and the North Sea,” he said.
Kerr McGee has been around since 1929 and it is one of the leaders in off-shore oil and gas exploration.
Mr. Miller continued: “Right now we are looking at tourism, banking is our second sector; agriculture and fisheries is another sector, but certainly with the advent, if God is to bless us in the next few months we will be able to find petro-chemicals in our waters,” he said. “It will be a new day, and the benefits to the Bahamian people and economy will be immense.”
It was just over 55 years ago, in 1947 when Kerr McGee drilled the first well in the Gulf of Mexico. It was that well that started the world-wide offshore petroleum industry. The well was in 23 feet of water. The company has now gone into water depths of 10,000 feet in the Gulf of Mexico and Brazil.
Kerr McGee Vice President, David Christian said: “We have taken the basic lessons we have learned since 1947 with that first well and we have continued to built upon that to the point where we hope that this venture in The Bahamas will be a commercial venture not only for us, but also for the Bahamian people.
“We have learned a lot of lessons in the Gulf of Mexico from everything we have done and the industry has done over the years, whether it is seismic activities or drilling activities. I think you will find that in the Gulf of Mexico both the commercial industry, the fishing industry, as well as the sport fishing industry has actually benefitted from the activities that are undertaken in the off-shore waters. The fish congregate around those platforms. They act as artificial reefs,” he said.
Mr. Christian saidin the past six years in the Gulf of Mexico, Kerr McGee has received the highest award given to any other companies by the Department of Interior and Mineral Management Services for its environmental health and safety operations in the Gulf.
Kerr McGee won the award three times, which no other company has won more than once, Mr. Christian said.
“We are going to bring our environmental priorities, our priorities for human safety and we will operate in the same manner here as we do in the Gulf of Mexico,” he assured. “Is there oil in The Bahamas? We don’t know, but we are sure going to try and, God willing, we will see what will happen in the next few months or the next few years.
“Whether oil or gas we are not choosy. They are both valuable commodities. If there is something there we are going to find it,” he promised.
By Keva Lightbourne, The Nassau Guardian
