Bahamas Petroleum readies exploratory drilling

Hurricane Dorian has not threatened a potentially large petroleum deposit in the waters off the oil-starved Bahamas. 

On Tuesday, based on a series of four studies completed over previous months, Bahamas Petroleum Company (BPC) announced “the likely presence and quality of a world-class source rock and petroleum system located precisely in the BPC license, with charge and migration pathways evident to deliver hydrocarbons into the identified structures.”

Tapping such an energy deposit could be a game-changer for the Bahamas, quickly diversifying the tourism-driven economy and bringing domestic fuel supply to an island chain of about 400,000 residents that currently produces no oil and virtually no liquid gases.  

SUBSURFACE STUDIES

In recent months, Bahamas Petroleum carried out four separate subsurface studies with the help of outside advisers and consultants, including:

• A seismic attribute study of its 3D data, deploying what it calls “leading-edge industry technology,” in order to assess the fracture and fault network near proposed well sites.
• A geophysical and seismic interpretation of the carbonate rocks systems in the license area, enabling Bahamas Petroleum to identify direct hydrocarbon indicators (DHIs), as well as strong evidence of the presence of reservoir porosity and permeability. 
• A detailed paleogeographic study, establishing the presence of “a Late Jurassic oil-prone source rock and active petroleum system in the Santaren Channel” in the BPC license area.  
• 3D analysis of areas adjoining the BPC licenses in Cuban waters, as well as oil samples from nearby sites provided by the Cuban National Oil Company, helping to establish the Bahamian license sites as Bossier-Smackover, belonging to the same Late Jurassic petroleum systems as those found in Cuba and the US Gulf Coast.

POTENTIAL IMPACTS

Bahamas Petroleum summarized the results in a press release, saying they: “Add to the already sizeable body of evidence, derived both internally and from independent advisors and experts, in support of [BPC’s] view that technical risk of the prospects is relatively low, thereby increasing confidence in a successful outcome of the exploration wells.”

Simon Potter, CEO of Bahamas Petroleum, said the findings: “Serv[e] to further technically de-risk the drill candidates and reconfirming our view that our prospects in The Bahamas represent a drill ready, potentially multi-billion barrel prospect inventory."

Bahamas Petroleum holds 100% development rights on five offshore licenses, each license area spanning roughly 3,100km2, according to the company’s website.  It has applications pending for three additional sites. 

EXPLORATORY DRILLING IN 2020

The company originally acquired its licenses in 2007, and has since received a number of extensions from the Bahamian government. 

Now, though, BPC must drill by the end of 2020 or else face losing 50% of its southern license area, which encompasses four of its five licenses. 

The southern license sites are co-joined, allowing Bahamas Petroleum to satisfy its license rights by drilling at any one of the sites. 

In August, Bahamas Petroleum announced it had contracted Seadrill for the use of a drilling rig, currently located in the Gulf of Mexico, in 1H20. It also contracted BakerHughesGE for wellhead equipment and tubulars, and has Halliburton under contract for additional rig services and tools.  

Bahamas Petroleum’s drilling plan will be for an exploratory well that is located 18,000-21,500f below the surface, according to the company’s annual general meeting in late August.  

While Bahamas Petroleum has been seeking a farm-in partner as it readies exploratory drilling, it recently announced it was prepared to drill an exploratory well offshore alone. 

The company is now finalizing plans for drilling an initial exploratory well or wells in 2020. It estimates the cost of initial exploratory drilling at US$25-30mn, rising to US$50mn if it opts for concurrent drilling on two wells.  

Image sources: Bahamas Petroleum Company