With drilling plans on track, BPC to enable local investment

Bahamas Petroleum Company (BPC) has decided to develop and implement a Bahamas-based mutual investment fund with the aim of owning BPC shares as the company continues its work effort toward drilling of an exploration well in The Bahamas in 2020.

BPC said that it was an opportune time to revisit the matter of providing local Bahamian investors with a means to invest in the company.

The rationale behind it was the fact that the company made progress towards the beginning of exploration drilling in the Bahamas in the late first quarter of 2020.

BPC added Bahamians would be able to invest in the company through this mutual fund and thus in the exploration and potential development of hydrocarbon resources in The Bahamas.

To this end, the company engaged Leno Corporate Services Limited, Bahamian investment services and fund management firm, to act as its adviser for this purpose.

Simon Potter, Chief Executive Officer of Bahamas Petroleum Company, said: “In 2016, the then Government established a framework in law for the establishment of a Sovereign Wealth Fund, for the purpose of harnessing such revenues. Beyond this, however, we at BPC have long believed that Bahamians should be able to invest in the Company, and, in this way, have a ‘direct ownership’ interest in their own national resource. We have therefore initiated a process seeking to create a Bahamas-domiciled mutual fund, which, in the event of its establishment, would provide a vehicle whereby individual Bahamians will have that opportunity to invest in BPC’s project of potentially national significance.”

The company added that a substantive piece of work to be undertaken as part of the environmental authorization (EA) process is an environmental baseline survey (EBS).

This survey will determine the environmental baseline conditions at the proposed drilling location by providing detailed measures of the currently prevailing environmental conditions, and against which any potential effects of future operations can be detected and measured.

This includes a collection of samples, documentation of physicochemical conditions, and characterize the water column. A photographic survey will be used to further characterise the seafloor substrates and associated biological communities as well as identifying any potential archaeological artifacts.

New laws adopted in the country in 2016 introduced for the first time in The Bahamas an entirely new concept of Environmental Authorisation (EA), as a required mandatory step before beginning of drilling activities. In April 2018, BPC submitted an Environmental Authorisation application, which included an Environmental Management Plan.

The company is now working to conclude all work necessary for the finalization of the EA in early 1Q 2020, so as to meet a timeline developed in conjunction with BEST and Government directive, and consistent with drilling activities scheduled to start in late Q1 2020.

Response plan for potential incidents

According to the company, a significant component of the environmental management plan is having a proactive and effective response plan for any potential incidents.

A key piece of additional knowledge required for finalizing BPC’s response plan is predicted fate and behavior of particles or matter in the sea depending on prevailing currents, tides, water depth, surface conditions, and weather data which are derived from simulation models.

BPC completed such a simulation as part of its EIA in 2012, but, as agreed with the Government of the Bahamas, it is seeking to supplement this previous study now with new and repeated studies.

In that regard, BPC engaged RPS ASA Group to undertake this study, making use of RPS’ proprietary three-dimensional modeling tools. Completion of this work is expected in the early first quarter of 2020 when the outputs of this study will be incorporated into the EMP as appropriate.

Meanwhile, BPC entered into a framework agreement with drilling contractor Seadrill back in August 2019, setting the terms for the potential use of Seadrill’s drilling rig for its first exploration well in the Bahamas in 2020. The company stated in October that it was working on finalizing a long-form rig contract with Seadrill and preparing for drilling.

The company also finalized an agreement with Baker Hughes for the provision of equipment for its first Bahamas well.

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