By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government is expected to decide this year whether to approve a further five oil exploration licences, with its current licensee aiming to secure a joint venture partner “after the summer”.

The Bahamas Petroleum Company (BPC), in its recently issued 2012 annual report, said it expected the Christie administration to this year make a decision on both its two additional licence applications and the three made in a joint venture with Norwegian oil giant, Statoil.

Simon Potter, BPC’s chief executive, told Tribune Business that the fact its research showed the Bahamas had “world class petroleum potential” should aid the Government in making a ‘positive decision’ on the five applications.

“We view the prospectivity as very strong, have made these applications in good faith and, indeed, have paid for those applications,” he said.

“Ourselves, with Statoil, are optimistic “ that they will be approved.

All five applications were submitted in 2010, but fell victim to the then-Ingraham administration’s decision to place a moratorium on issuing any new oil exploration licences until the proper regulatory framework was in place.

In its annual report, BPC said: “The company has applied for two additional licenses in the Santaren Channel, and a further three licences in joint partnership with Statoil.

“In the joint venture with Statoil, an Environmental Feasibility Study (EFS) has been submitted and is currently under review by the Bahamas Environmental, Science and Technology (BEST) Commission and their consultants. A decision on these applications is expected in 2013.”

Elsewhere, Mr Potter described as “a key priority” BPC’s search for a ‘farm-in’ joint venture partner to share the technical and financial burden of its planned $100-$120 million exploratory well.

“During 2013 there are a number of major catalysts that will underpin and sustain future growth,” Mr Potter wrote in the BPC annual report.

“A key priority this year will be to close the farm-out discussions as soon as possible, but as these negotiations remain commercially sensitive, no update or announcement is anticipated until a successful outcome has been achieved, nominally expected after the summer of 2013.”

Mr Potter added that BPC had rejected several ‘farm in’ offers received when it initially opened its oil exploration data to potential joint venture partners in May 2012.

He said this was because the offers were “too heavily discounted” as a result of the uncertainty surrounding the Government’s proposed oil exploration referendum, and doubts over whether BPC would even be allowed to drill an exploratory well.

The Christie administration’s subsequent moves to clarify the referendum situation, Mr Potter told Tribune Business yesterday, were “fundamental” to BPC’s renewed ability to seek better terms from potential joint venture partners.

“We’re obviously talking with potential partners at the moment. We have obviously done all the technical work, and are just as excited by the opportunities as our colleagues will be,” he added.

“Certainly, the data room is open at the moment for companies to view the data, and they are proceeding through the room as we speak.”

Declining to go into specifics on the ‘farm in’ negotiations, Mr Potter said BPC was talking to “a number” of potential partners.

“The technical merits are there for all to see,” he added. “It’s through the confidence in the research and the prospectivity - it’s that which makes me confident that companies will share our view and want to farm in at some point.”

BPC had submitted the prospectus for its proposed Bahamian Depository Receipt (BDR) offering to the Securities Commission and Central Bank of the Bahamas in February/March 2013, but had yet to receive the go-ahead from the financial services regulators.

Emphasising that the BDR issue was not to raise capital, but to give Bahamian retail and institutional investors an opportunity to buy-in to BPC and enjoy the upside if it struck ‘black gold’, Mr Potter said of the regulators: “They will opine, I guess, in their time.”

Backing the Government’s plans to upgrade the regulatory regime governing the oil/petroleum industry, he added: “We’re waiting for the strengthened, modernised regulations, but we welcome that. That’s the right thing to be doing.

“I don’t think that will cause us too many worries as we’re operating at international standards, and that gives confidence the well be executed in the required timeframe.”

While BPC’s first exploratory well might be spud as early as mid-2014, Mr Potter said a more realistic timeline was closer to the end of next year.

He added that previous statements by Kenred Dorsett, minister of the environment, indicated that BPC would not be held to the initial stipulation that it spud its first well by April 26, 2013.