News from the Bahamas related to plans for oil exploration there: preliminary agreement has been reached on the location of the maritime boundary with Cuba:
Government officials from The Bahamas and Cuba have agreed in principal regarding the maritime boundary between the two countries, according to Deputy Prime Minister and Minster of Foreign Affairs Brent Symonette.
Symonette, on Monday, joked at a news conference at the Department of Immigration that the boundary was finally established after a long 15-year dispute. However, he said the countries maintained an amicable and diplomatic relationship throughout the process. The United Nations assisted with the process.
Establishing the maritime boundary between the countries, which goes near the Cay Sal Bank towards Inagua, was critical for oil exploration in the area.
However, the government has not yet said that it will allow drilling for oil near the Cay Sal Bank or anywhere else in The Bahamas. The government announced a drilling moratorium following the oil spill in the Gulf of Mexico last year.
The government is considering a clear policy on disaster management in the event that there is an oil spill in Bahamian waters.
Symonette said that Cabinet now has to meet and sign off on the boundary coordinates agreed on by the Bahamian and Cuban negotiating teams.
The Bahamas Petroleum Company (BPC) has several oil exploration licenses in Bahamian waters. Despite the drilling moratorium, BPC is optimistic that it will begin drilling in 2012.
Read more in the full article from the Nassau Guardian.
And here’s an evaluation of the economic benefits of an oil find in The Bahamas:
What financial benefit should Bahamians expect to reap if the sands beneath The Bahamas hold the immense oil treasures some are projecting?
Under the current leasing arrangements, royalties of up to 25 percent of well-head revenue could translate into hundreds of billions over time. But as far as the government’s take goes, the terms of those licenses are quite favourable — for the licensees.
The projection for a small government take relative to other oil-producing countries is playing into the Bahamas Petroleum Company’s (BPC) efforts to attract investors to its Bahamian petroleum exploration project, and was featured in its April 2011 investor presentation, “The Bahamas, a giant oil province in the making”.
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[T]he potential is massive.
John Bostwick II, attorney and author of “Bahamas 20/20 Vision” told Guardian Business on Friday that based on public statements made, BPC could be looking at $2.4 trillion worth of oil — his calculations based on $97.50 per barrel prices. He says the size of the potential oil traps may be missed by many.
“I don’t know if people really are focusing on what they are saying,” Bostwick said. “Supergiant traps, not giant — supergiant.”
Supergiant oil traps have 5 billion or more barrels of ultimately recoverable oil.
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Just for illustration, if 500 million barrels of oil are produced in a year under those license terms, with oil at $100, it would generate about $11.4 billion in annual royalties for government. That assumes production is averaged out across a 365-day year. That’s a lot of roads — or schools, universities, hospitals, court rooms, police equipment, training programs, etc. For comparison, the entire gross domestic product (GDP) of The Bahamas in 2007 was $7.2 billion, according to World Bank data.
See the complete article at Caribbean News Now for more information.
Previous related posts on Green Antilles: Bahamas Petroleum Company reports positive oil prospects, Exploration in the Bahamas identifies potential “oil giants”, Oil exploration not the way forward for a green Bahamas, and Maritime boundary negotiations between Cuba and The Bahamas.
[Photo: NASA Goddard Photo and Video]
