Bahamas Petroleum Company (BPC) has entered into a definitive contract for a drill rig with Stena Drilling in order to begin its exploratory well by the end of the year or early 2021, a statement on the company’s website revealed, adding that the company’s costs have been reduced by 15 percent with this contract.
BPC Chief Executive Officer Simon Potter said in the statement that the company’s new drilling window is December 15, 2020 and February 1, 2021, after the impact of the novel coronavirus (COVID-19) forced the company to delay its second quarter 2020 drilling schedule.
“In March 2020, we were within weeks of commencing the drilling of our Perseverance #1 well, when we were compelled to defer our planned drilling program due to the impact of the COVID-19 pandemic,” Potter said.
“Immediately we undertook a range of activities necessary to reschedule activity toward the end of 2020 and into the first quarter of 2021, consistent with our license obligations as extended for the declared force majeure event, by which time we expect the worst of the broad suite of impacts of the pandemic to be behind us.
“To this end, we are pleased to announce that we have entered into a rig contract with Stena Drilling, which provides a firm series of parameters on rig rate, provision of managed pressure drilling (MPD), mobilization and demobilization costs.”
According to BPC’s statement, Stena will provide a state-of-the-art, sixth generation drill rig, with an integrated supply of an MPD unit.
BPC noted that its decision to use Stena and not Seadrill for a drill rig has lowered its cost estimates from between $25 million and $30 million, to now between $21 million and $25 million, “reflecting changes to the global operating environment”.
The company has estimated that its exploratory well could hold 0.77 billion barrels to 1.44 billion barrels of oil.
BPC was obligated, through its contract with the Bahamas government, to drill an exploratory well by the end of the year, but COVID-19 has allowed the company to extend that period, citing a force majeure event. That extension, according to the company, could run into mid-2021.
“BPC has an obligation to drill an initial exploration well prior to the conclusion of the current exploration period of its four conjoined licenses in the southern territorial waters of the Commonwealth of The Bahamas,” the company stated.
“That period was due to expire on December 31, 2020, but is extendable based upon declaration of force majeure occasioned by the Bahamian and global response to the COVID-19 virus pandemic, with the company having submitted a force majeure notice to the government of The Bahamas in early March 2020, in accordance with the terms of its licenses.
“Based upon the license terms and prevailing regulations (and allowing only for the duration of disruption to operations to date) the company expects that the current exploration period of its licenses will extend until at least April 2021, however, given the likely further continued COVID-19-related disruption, the company has sought clarification from the government on an extension to at least June 2021.”