How many licences does Bahamas Petroleum Company have? And, does Bahamas Petroleum Company have any pending applications?
Bahamas Petroleum Company currently owns 100% equity in five
exploration licences, Bain, Cooper, Donaldson and Eneas in Southern
Bahamas and Miami in Northern Bahamas. Bahamas Petroleum Company
has made two, 100% equity applications named Santaren and Andros by
the Government; additionally the Company has three applications in
the Cay Sal area, given the names Zapata, Falcones and Islamorada
by the Government.
How did the existing licences and the pending applications get their names?
Upon making the licences application, Bahamas Petroleum Company
was required to define the applied for area of blocks and to give
that area a name; the Government then decides when awarding the
licences whether they accept the proposed name(s) or whether they
wish for the Company to change them. After the Government confirms
and accepts the names they are typed into the actual licence
agreement along with all other fiscal terms and obligations.
Is there any significance to the names of the licences and applications?
The names of the licences and applications hold no significance.
The names of the four Southern licences run alphabetically and
reflect 'traditional' Bahamian family names rather than
pertaining to any particular person, or persons related to the oil
industry or Bahamas Petroleum Company.
What are the main components of the Maritime Agreement and how does it affect Bahamas Petroleum Company?
The agreement delimiting the maritime boundaries of The Bahamas
and Cuba was signed on 3 October, 2011, by the Deputy Prime
Minister and Minister of Foreign Affairs Brent Symonette. This
agreement defines the dividing line between the two countries and
the limits of territorial waters. Further, it defines the exclusive
economic zones and continental shelves between the two nations
which then also allows for cooperation in the management of living
and non-living marine resources in the area. The agreement delivers
on the Government assurances to protect not only the Bahamian
borders but also the extent of the granted exploration licences.
This affords Bahamas Petroleum Company certainty as it relates to
the limits and extent of its currently held exploration
What are the Act(s) governing petroleum activities in The Bahamas? What do they allow?
The Petroleum Act ('the Act') 1971 Chap 219 governs Petroleum
exploration, making provisions for the granting of Permits,
Licences and Leases. Additionally, the Act covers the level of
Royalties and granting of all rights required by a licensee or
lessee in order that petroleum may be searched for, bored for,
gotten, stored, treated, converted, or carried away. The Act is
further refined by the Petroleum Regulations 1978 Chap 219; which
goes beyond simply defining the term of the licence to
actually detailing the procedures and obligations for the licence
and/or lease. For instance, where the Act speaks only to Petroleum
exploration; the Regulations specifically deal with the Term and
Renewal of Licences, Expenditure and Pooling of Expenditure as well
as Abandonment, Completion and Suspension of wells; etc.
When were the current Licences awarded? And, what are the key terms and obligations?
Bahamas Petroleum Company was awarded five licences in 26 April
2007 for a twelve (12) year term, though the currency of the
licence has to be renewed every 3 years - consistent with the
existing Act and Regulations. A 2-year extension was granted to the
first 3-year period in March 2008 after Bahamas Petroleum Company
was requested to hold operations until The Bahamas/Cuba
Delimitation agreement was assigned. Bahamas Petroleum Company
accordingly deferred commencing seismic surveys in the awarded
areas, with the first 2D survey not commencing until June 2010 and
the 3D a year later in July 2011. Thus the renewal of the first '3'
year term was extended until 26 April 2012 when the Governor
General, under advice from the Minister,shallgrant Bahamas
Petroleum Company a licence renewal. This, provided Bahamas
Petroleum Company is in compliance with its obligations under the
Petroleum Act, the regulations and the Terms and Conditions of its
licence agreement. The Company is in compliance given the aggregate
expenditure to date of some $50 million exceeds by over 60 times
the obligations placed upon it by the licence agreement. There is
no room for ambiguity in that compliance shall lead to renewal and
each year (to the year of this report) the Company has received
from the Ministry of Environment a letter attesting to
The Company and the Minister of Environment agreed the specific
obligations pertaining to the licences before the licences were
awarded in 2007. In summary, it is a requirement that Bahamas
Petroleum Company pay annual rental fees for each licence, conduct
seismic surveys, prepare and submit an Environmental Impact
Assessment (submitted in October) and Environmental Management Plan
(currently being drafted) ahead of drilling; additionally, there
are certain reporting requirements for annual submission, such
as a Plan Report showing annual expenditure for each licence; an
amount which the Company has exceeded by a considerable amount.
How does the ‘Moratorium’ implemented by the Bahamian Government affect Bahamas Petroleum Company?
In August 2010 the Minister of Environment, Earl Deveaux,
announced that as a result of the Deepwater Horizon rig incident in
the Gulf of Mexico; the government were to impose a moratorium on
the consideration of any new oil exploration licence applications
pending the enactment of revised/new environmental regulations
covering petroleum operations. This immediately impacted the
pending award of the three licence applications Bahamas Petroleum
Company made jointly with StatoilHydro, plus the two 100% equity
licence applications. However, Bahamas Petroleum Company has never
received any documentation, official or otherwise, informing the
Company how this refers to existing licences or modifies (if at
all) the obligations placed upon it. In the absence of any official
or direct advice the Company has continued, and will continue to
honour, obligations to the Government, as defined in the terms and
conditions of the licences. Bahamas Petroleum Company is
active in supporting the Governments efforts to implement revised
environmental regulations compliant with international standards
and embodying lessons learnt from the incident in the Gulf of
Mexico. The Company will ensure compliance with all and any,
existing and new, regulations in all aspects of operations,