BPC still convinced commercial quantities of oil exist

Despite facing government consternation and environmental advocacy against oil drilling, Bahamas Petroleum Company (BPC) Chief Executive Officer Simon Potter said the company still unequivocally believes in the prospects of finding and producing commercial quantities of oil in The Bahamas.

Potter was a guest on the Guardian Radio talk show Z Live yesterday speaking about the recently announced changes to the company, including its decision to change its name to Challenger Energy Group and him stepping down as chief executive officer to take on a new position as non-executive director.

BPC is currently seeking a renewal of its southern licenses for a three-year period to conduct a third exploration for oil.

Although the government has not announced whether it would renew the licenses, Prime Minister Dr. Hubert Minnis said last month that he remains “totally against” oil drilling in The Bahamas.

Asked pointedly about the prime minister’s recent comments, Potter said, “Well it’s not up to me to comment on various political statements, I’m a mere geologist, I go where the rocks have potential. Governments around the world have a duty – if that’s the right word to use – to their citizens to evaluate the resources held within their country’s boundaries. We were licensed in 2007 to help the then government and subsequent governments assess the volume, the nature, the potential, the scale, the value of the resources within their boundaries.”

Potter continued, “With established democracy over hundreds of years, with an established judicial and financial sector, you have to look here and say that in general terms the political risk here was very attractive. I didn’t mean to sound too lofty. There has to be a commercial gain for the company and its shareholders and that is afforded in the license agreement. When you lay down $150 million as we have done to explore and assess those resources, we have to know what the rules of the game are.”

BPC holds five exploration licenses covering approximately four million acres. The four southern licenses are located in the waters where Perseverance #1 was drilled. BPC began drilling the Perseverance #1 in December hoping to yield at least 0.77 billion barrels of oil, however it announced in mid-February that although hydrocarbons were found, they were not in the quantities expected.

Potter said although Perseverance #1 failed to yield commercial quantities of oil, BPC is convinced there are commercial quantities in Bahamian waters.

“Unequivocally yes. What we’ve done with the changing or the expansion of the portfolio, the diversification of the portfolio is to cover the down side. So if the only asset that we had was The Bahamas and you drilled a well and you found nothing, then it’s kind of an all or nothing situation,” he said.

“So by having production, by having income in Trinidad and the ability to generate more income from production in Trinidad and Suriname, then the nature of the portfolio is that an investor doesn’t lose their shirt if we don’t find anything in The Bahamas. So your investment in the new Challenger Energy is well if these guys are successful in The Bahamas then there’s a large upside, but if they’re not then they can continue to produce and continue to generate income and cash from their other assets. So it’s a portfolio decision the company has made to ensure that the downside, or exposure for not finding anything, is covered for investors.”

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