Oil company wants to look offshore too
THERE ARE POTENTIALLY up to 50 billion barrels of oil in Barbados’ waters, and a group of investors which has already committed to recovering hydrocarbons onshore is positioning itself to explore offshore.
Having tendered bids to secure three of the seven blocks now available in Government’s 2015 Offshore Petroleum Licensing Campaign, Bajan Hydrocarbons Inc. has just secured $130 million worth of capital for the venture, chief executive officer Robin Birchall revealed. The funds are split between debt ($100 million) and equity ($30 million).
“The Government has been very pragmatic throughout our conversations to date. They understand what we are trying to do and appreciate the potentially vast impact that industry success in the country could have on the socioeconomic development of Barbados,” Birchall told BARBADOS BUSINESS AUTHORITY.
And he said if it was successful, the Barbados-based private oil and gas company would be spending $52 million in pre-drilling costs in the first two years, with an additionally $390 million in spending, “assuming a well is drilled in each block”. It is likely to cost about $130 million to drill a well offshore Barbados.
“We did a review of all the offshore blocks and we think there is potentially up to 50 billion barrels in place, which is not small by global standards, it’s a pretty decent size. To put that in perspective, that’s more oil than the remaining reserves lying in the United Kingdom North Sea,” he said.
“If a discovery is made the capital expenditure to build the facility for production would be around US$3.5 billion and it would pay around US$650 million in total net taxes to the Government for 25 to 30 years. So the facility would be the single largest taxpayer by a significant margin and the Government doesn’t have to put up a single penny to build it.
“This is for a US$250 million recoverable oil field. That would make the country a surplus energy producer to the tune of about 30 000 to 65 000 barrels a day. It could start at about 75 000 barrels a day, it would run like that, then it would start to decline and then probably go down to about 25 000 barrels a day. So one single producing field would transform the economy and pay more tax than all the other sectors put together,” he added.
Birchall has a background of 15 years in corporate finance in natural resources, oil and gas mining “all over the world”. Bajan Hydrocarbons has a senior core team with experience in the financial markets and the oil and gas industry.
“Our technical team has an exemplary track record in health, safety and running environmentally secure projects, so we will manage our offshore operations to the highest of industry standards,” he said.
As it awaits word on its bids from government, Birchall said Bajan Hydrocarbons was pressing on with its activities in Trinidad, where the company is searching for oil offshore the west and east coasts.