Tuesday, Jul 23, 2019
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BPC announces confidentiality and exclusivity agreement with international oil firm

Bahamas Petroleum Company (BPC) may be closer to finding a farm-in partner for the exploration of oil within The Bahamas after it announced yesterday that it has entered into a “confidentiality and exclusivity agreement with a major international oil company to conclude a detailed technical evaluation of the company’s licenses”.

BPC added in its announcement, published on its website, that it will seek to “develop a commercial framework for a potential transaction” with the international oil company, which it said will remain anonymous based on its agreements.

Chief Executive Officer of BPC Simon Potter said this step brings the company closer to realizing a partner that allows an exploratory oil well to be drilled.

“The decision to enter into an exclusivity agreement with a reputable international industry operator is a significant step in our ongoing process to secure a partner for our highly prospective assets in The Bahamas,” Potter said.

“We look forward to working closely with the counterparty over the coming months, and we will update the market of any material developments as and when appropriate.”

Late last week BPC announced it had submitted its application for environmental authorization through the Ministry of Environment and Housing to carry out its operations.

BPC’s statement explained its financial, exclusivity and confidentiality commitments to the international oil company: “The company will receive a non-refundable cash payment of US$250,000 per month (US$750,000 in aggregate) for the initial three-month period of exclusivity with an additional US$250,000 per month for any extended period of exclusivity, such extension at the option of the counterparty, up to a maximum of a further three months.

“Unless and until a definitive farm-in or other commercial arrangement is agreed with the counterparty, its identity will remain confidential. Given the exclusivity arrangements provided for in the agreement, discussions and negotiations with other potential partners have been suspended for the time being.”

BPC noted that the agreement does not provide an assurance that a commercial transaction will ultimately be concluded with the international oil company.

Attorney General Carl Bethel recently suggested that the government is considering moving forward with oil exploration. Bethel said in an address to the Senate recently that the government will have to make hard decisions regarding the potential growth of the Bahamian economy, and suggested that oil exploration is one of those sectors with huge potential.

 

Chester Robards

Senior Business Reporter at The Nassau Guardian
Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian.
Education: Florida International University, BS in Journalism
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