by Richard Coulson
The prospect of oil being extracted or refined in The Bahamas has ardent supporters, opposed by intractable critics. Two very different ventures are the targets of their scrutiny, one transparent, the other opaque.
The first is Bahamas Petroleum Company (BPC), founded over ten years ago by offshore investors, primarily UK investment funds, to explore once again the presence of undersea oil deposits in Bahamian waters. They have spent possibly $70 million, without a penny of Government funds, investigating a potentially productive zone southwest of Andros near the maritime Cuban border. This has paid for extensive geographical and seismic research, leading to Government granting licenses (now extended to end 2020) for drilling in five precise locations, as well as the cost of Environmental Impact and Mitigation studies, and expenses of a small Nassau office with resident managing director, Simon Potter.
Since BPC’s parent company is registered in the Isle of Man, and its shares are listed on London’s alternative exchange for smaller companies, every detail of BPC’s ownership, operations, and finances is publicly reported. Mr. Potter has always made clear that BPC’s success depends on finding oil in commercial quantities, and this requires a major oil company joining as a farm-out partner to provide the capital for drilling. BPC’s only income has been a $1 million option payment received in 2018 from such a major, who chose not to exercise on the option’s termination.
Mr. Potter and his fellow directors are working hard to sign up a similar investor. In his progress report of April 28 when WTI oil was trading at $65, he forecast a “sustained recovery in oil prices”, but unfortunately there’s been a downward trend to the mid-$50s. The lower the price, the less incentive there is for investment in new fields like The Bahamas.
I continue to hope that market conditions will reverse so that BPC can find oil and operate profitably. Its sharing agreement with Government could bring substantial revenue to our Treasury, far outweighing he highly theoretical risks from an oil spill that so deeply concern our vociferous environmental lobby.
First published in The Tribune, and is posted here with the kind permission of the author.
Mr. Coulson has had a long career in law, investment banking and private banking in New York, London, and Nassau, and now serves as director of several financial concerns and as a corporate financial consultant. He has recently released his autobiography, A Corkscrew Life: Adventures of a Travelling Financier.
