Bahamas Petroleum Company (BPC) does not necessarily need a farm-in agreement to continue exploring for oil in The Bahamas, Chief Executive Officer Simon Potter said yesterday, but he contended it is the normal process and it will reduce the uncertainty that comes with continued exploration at the unproven leases.
Potter, who made the remarks during an appearance on the radio talk show ‘The Revolution’ on Guardian Radio, said it will be some time before BPC knows whether it will continue its exploration, given that it has to pore over the data gleaned from its Perseverance #1 test well, present the data to the government and have the government renew the company’s exploration licenses, which expire in June.
Potter explained that the data will also either convince a company to join BPC in continued exploration in The Bahamas in a farm-in agreement, or choose to walk away from a deal.
Two possible partners have walked away from BPC in the past, but Potter said “it’s possible to move forward without a farm-in”.
BPC’s test well failed to produce commercial quantities and investor confidence in the company sank, resulting in a 66 percent dip in the company’s share price.
“What’s normal is you would get a partner. You would reduce your uncertainty by actually bringing in a partner who could help you look at the technical aspects of the license and help with future costs,” said Potter.
“To the extent that we’re able to share the cost of that with a partner, then that may again influence our future strategy in The Bahamas.
“But it’s very much a portfolio like any sort of stocks and shares, really, you have high-risk, high-reward shares and you have low-risk, but relatively low-reward shares and it’s the same with the oil fields that we have.”
Potter said the company has now turned its attention toward its investments in Trinidad and Tobago and Suriname, where onshore wells will be drilled at a fraction of the cost of the $35 million offshore test well recently completed in The Bahamas.
He said the company is positioned to make money from its exploration in the Caribbean.
“If The Bahamas’ licenses were the only licenses that the company had, which historically was the case, then there would be very little option other than for us to explore in The Bahamas,” Potter said.
“But we have oil production in Trinidad, where we have onshore licenses and drilling wells there and indeed we have licenses onshore in Suriname, where we will be drilling later this year. And we have very similar exploration acreage to what have in The Bahamas, in Uruguay.
“So having made all of this sort of investment in The Bahamas, we’ll now pause for thought, we’ll direct more of our investment to those other countries and indeed yield higher production and therefore higher revenues in those countries.”