By Taneka Thompson
Nassau Guardian Senior Reporter
NASSAU, Bahamas -- The Bahamas government will allow exploratory drilling to determine if the country has commercially viable oil reserves before it holds a referendum on the issue, Minister of the Environment and Housing Kenred Dorsett said.
Dorsett explained that the exploration data needed to verify if the country has enough petroleum reserves to justify drilling would not be available until the end of 2014 or early 2015. As a result, the government is not expected to hold an oil drilling referendum before the second half of 2015, depending on the outcome of the exploration, Dorsett said.
“Exploration drilling is of course the only way the Bahamian people will be able to get a scientific answer to the burning question as to whether petroleum reserves even exist in commercial quantities in our waters,” he said in a statement.
“Obviously, we are not going to have a referendum on a hypothetical proposition.
“More particularly, we are not going to ask the electorate to vote on whether they want to develop an oil industry if there is no oil to begin with.
“Thus, we need to find out first, through exploration drilling, whether we do indeed have oil in commercially viable quantities.
“If we don’t, then obviously it would be completely pointless and a shameful waste of public funds to have a referendum on the matter.”
The Bahamas Petroleum Company (BPC) was granted five oil exploration licenses in April 2007, the company’s website notes.
To date BPC has invested $50 million in the country, most of that spent on 3D seismic testing, according to the company.
Hours after Dorsett released his statement, BPC CEO Simon Potter welcomed the news as an opportunity to properly plan for oil drilling, which he said is at least a year away.
“Over the next several months our plan is to demonstrate in a straightforward and transparent way how exploration plans will be implemented and strengthened,” Potter said in a statement. “We anticipate it will take at least a year to appropriately plan any drilling activities.”
Dorsett also pledged that if significant oil reserves are found the government would launch an “extensive public information program” on the implications of oil drilling.
“As part of this public information process the Bahamian people would also receive a timeline for production and, very importantly, there would have to be a national dialogue on all important aspects of the question, including how oil revenues should be used to develop our nation and our people in ways that would probably not be achievable under current revenues from tourism and other existing industries.”
He added, “It is unlikely there would be any referendum on the oil development question before the second half of 2015.”
Dorsett noted that Russian interests have begun drilling for oil in Cuban waters, not far south of Guinchos Cay in The Bahamas.
He said because of this, the government must quicken its decision on oil drilling and ensure the necessary environmental laws and regulations are in place.
Dorsett said new regulations to support oil exploration “are substantially complete” and will soon be presented to Cabinet.
“The fact that oil exploration is being pursued so seriously and systematically in such very close proximity to The Bahamas dictates that we hasten our own decision making process as it pertains to oil exploration and environmental regulation here in The Bahamas,” he said.
Dorsett, along with Minister of State for Legal Affairs Damian Gomez, toured Cuba last month to discuss both countries’ “mutual interest” in oil exploration and environmental protection.
He said the Ministry of Environment and the Office of the Attorney General have made the strengthening and modernizing of petroleum regulations a priority.
The new regulations are “substantially complete” and will be presented to Cabinet very shortly, he said.
Weeks before the 2012 general election, Prime Minister Perry Christie, then in opposition, said his administration would hold an oil drilling referendum if necessary.
This pledge came after former Prime Minister Hubert Ingraham accused Christie of being involved in a conflict of interest because of a previous relationship with BPC.
While in opposition, Christie worked as a consultant for Davis & Co., which counted BPC as one of its clients.
Christie admitted that he offered the company advice, through the law firm. He later said he severed ties with Davis & Co., and by extension BPC, well before his involvement became an election issue.
Republished with permission of the Nassau Guardian