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MONDAY, APRIL 30, 2018
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Oil exploration one step closer By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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IL exploration in Bahamian waters is one step closer to reality after an application for environmental approval was submitted to the Government late last week. Bahamas Petroleum Company (BPC), which has spent more than a decade on its exploration project, confirmed it has “lodged an application for Environmental Authorisation” with the Ministry of the Environment and Housing over its plans to drill a first well in waters south-west of Andros. Simon Potter, BPC’s chief executive, told Tribune Business yesterday that
* BPC applies for ‘Environmental Authorisation’ * Oil price rise ‘quite attractive’ for JV partners * CEO: Success chances ‘the best I’ve seen’ the submission was another “step” in the process to ‘spudding’ that first well, having taken two years to complete. He added that it would aid BPC’s search for a joint venture partner, which has received a further boost in recent months from the increase in global oil prices to over $70 per barrel. This, Mr Potter explained, had made the Bahamas - and specifically BPC’s project - “quite attractive” again to oil industry players whose exploration appetites have been stoked by the rise in
global prices and potential profit margins. He further described BPC’s prospects of discovering commercial quantities of extractable oil as “the best I’ve seen”, based on the company’s $100 million investment to-date in obtaining seismic data and ‘de-risking’ the project. BPC is currently working on a ‘parallel track’, which involves obtaining the necessary environmental approvals from the Government at the same time as it seeks to secure a ‘farm in’, or joint venture, partner to share the
financial and technical burden of drilling that first exploratory well. The ‘Environmental Authorisation’ submission indicates that BPC is likely making progress on its joint venture partner search, although Mr Potter declined to provide details on this aspect of the company’s work. He branded the application as an “intense piece of work” that took two years to complete, but which was required under regulations
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SPECIALIST: GOV’T FACING ‘MINEFIELD’ ON OWNERSHIP REGISTRY By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A BAHAMIAN IT specialist is warning the Government it faces a technical “minefield” over its Beneficial Ownership Registry, whose operations he urged it to outsource to the private sector. Bruce Raine, International Private Banking Systems (IPBS) principal, told Tribune Business his complete “lack of confidence” in government was behind the call for the Registry to be run by a ‘third party’ such as a law firm. With data protection and security key to calming investor fears over the Registry’s creation, Mr Raine said just one well-publicised data leak could “scare off” clients and business from the Bahamas. The Government last week tabled legislation in the House of Assembly to
* IT SPECIALIST’S ‘LACK OF CONFIDENCE’ * ‘THIS IS ONE THING WE MUST DO WELL’ * OUTSOURCE CALL ON SECURITY FEARS create a central registry containing details of beneficial ownership for all Bahamas-incorporated legal and corporate entities, suggesting this was necessary to meet international anti-money laundering and automatic tax information exchange standards. Mr Raine, though, argued that the data stored by the Registry needs to be “encrypted”, especially given that the lives of financial services clients and their families living in crimeridden Latin American
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Gov’t urged: Delay WTO until 2021’s new power plant established By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE GOVERNMENT was yesterday urged to delay the Bahamas’ WTO accession until 2021 to coincide with the prospect of lower energy costs for New Providence at least. Robert Myers, the Organisation for Responsible Governance’s (ORG) principal, told Tribune Business that the proposed timetable for Shell’s liquefied natural gas (LNG) power plant “gives the timeline” for when the Bahamas should seek to become a full World Trade Organisation (WTO) member. Reiterating that he was
in favour of the Bahamas ultimately joining the WTO once it could realise the full benefits, Mr Myers again urged that accession be delayed to properly position the economy for this. Suggesting that the Government was currently on a WTO “sales mission” and “blowing smoke up our backsides” over the need to join global trade’s rulessetting body, the ORG chief said his personal experience called into question the advantages said to flow from membership to Freeport. Mr Myers argued that Freeport should instead be labelled “bureaucratic port”, recalling how the imposition of 1 per cent
* ‘Reason enough’ to put accession off * Freeport ‘bureaucratic port’ with 2 Gov’ts * Gov’t ‘sales mission’ not tackling problems
ROBERT MYERS Customs processing fees on all imports and exports plus a doubling in Customs attendance fees - ultimately
sank his VTrade transhipment/logistics business. VTRade’s business model was built on quick turnaround, bringing in bulk shipments for ‘break down’ and forwarding on to consumers via smaller loads. However, the extra costs and bureaucracy introduced by the former Christie administration ultimately undermined its existence and forced the company’s closure. “Why do they think the WTO is going to open up Freeport?” Mr Myers told
Tribune Business. “What’s closing down Freeport is that you have to deal with two governments: the Grand Bahama Port Authority (GBPA) and the Governmentx. “You’ve got to jump through all the Port Authority stuff, and still have to deal with Immigration and Customs, and have Customs breathing down your neck. They imposed a 1 per cent fee on all goods imported and exported, and then doubled the Customs attendance fee.
“Every time you imported or exported something, you had to have Customs come in and inspect it. That’s not a ‘Freeport’; that’s a bureaucratic port. That’s what put me out of business. Until you get Customs and Immigration, and government, out the way, it’s a ‘bureaucratic port’.” Mr Myers argued that the Government seemed to be solely focused on selling WTO membership’s supposed merits, rather than addressing productivity, energy, and cost/ ease of business challenges that made Bahamian businesses uncompetitive with their international and
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QC: Licensees ‘can’t BAHAMAS’ GDP GROWTH trust’ Port over WTO ‘25%’ OF WHAT’S NEEDED By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
FREEPORT needs “two seats” in the WTO negotiations because the Grand Bahama Port Authority (GBPA) cannot be trusted to look after its licensees’ interests, an outspoken QC has warned. Fred Smith QC, the Callenders & Co attorney and partner, said the deal agreed with the former Christie administration over Freeport’s expiring tax breaks exposed the willingness of
the GBPA to “sacrifice” its 3,000-plus licensees. While the GBPA, Hutchison Whampoa and all their affiliates received an automatic 20-year renewal of their expiring incentives, all other Freeport businesses were required to apply to the Government to receive the same - until the May 10 general election produced a change in administration and policy. As a result, Mr Smith told Tribune Business that the GBPA and its licensees need to be represented
* WANTS ‘TWO SEATS AT TABLE’ FOR FREEPORT * TAX BREAKS SNAFU SHOWS INDEPENDENCE NEED * GOV’T TOLD: ‘DON’T BURY FREEPORT UNDER CARPET’
“independently” in the Bahamas’ upcoming World Trade Organisation (WTO)
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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE BAHAMAS is just “25 per cent of the way” towards generating the economic growth its needs following real GDP expansion of 1.4 per cent in 2017. Robert Myers, a principal with the Organisation for Responsible Governance (ORG), told Tribune Business that while welcome last year’s growth was still well short of the 5.5 per cent needed to slash existing
unemployment in half and absorb all new workforce entrants. The International Monetary Fund (IMF) has estimated that an average annual growth rate of 5.5 per cent, sustained over a five-year period, is needed to achieve such an objective, indicating the Bahamas still has much work to do. “We still need to be at 5.5 per cent,” Mr Myers told Tribune Business. “We’re just over 25 per cent of the way there. Our GDP still
* HAS TO EXPAND ALMOST FOUR-FOLD * TO MEET IMF’S 5.5% TARGET * DPM HAILS ‘RECOVERY’ SIGNS has to come up four times’. There’s still a long way to go, and there’s still some cost-cutting to do. “When we’re at 4.5 per
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