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Business Monday: Boyce speaks on Barbados’ search for oil
THE search for oil in the waters off Barbados is extremely costly, says Senator Darcy Boyce, Minister of State in the Ministry of Finance.
Senator Boyce said so Thursday night following a televised news conference at which he fielded questions on the local economy.
Responding to media queries about the status of the country’s proposed offshore drilling programme, Senator Boyce who also has responsibility for Energy, said that oil deposits are not only located in the extremely deep waters off the island, but that they are expensive to drill.
“Each offshore well could cost between $50 million and $60 million, and this makes the exploration a high risk venture,” said the Minister. “So you cannot just go out there and drill will nilly, you have to be sure about the deposits, and where to sink wells,” he explained.
Senator Boyce remarked that based on what the experts are saying as a result of seismic work, there are deposits. However, whether they are in commercial quantities is another matter.
He also revealed that Barbados will be approaching both Norway and Trinidad and Tobago. He explained that the aim is to secure technical assistance from the two oil producing countries.
In addition, the Minister stated that Government is looking at the existing legislation related to Offshore drilling to see whether it requires changing.
A bid submitted by BHP Billiton to undertake work in this country’s territorial waters has been approved by the Barbados Government. BHP Billiton, an Australian firm was among several international oil companies submitting bids.
The company was awarded offshore blocks Carlisle Bay (2 498km2) and Bimshire (2 506km2). Melbourne – headquartered BHP Billiton was one of 3 groups that submitted bids in September for the round, where 24 offshore blocks ranging from 790 – 5 025km2 were offered.
“We now have to negotiate a licence and something that is reasonable for Barbados,” Senator Boyce stated. The goal was to have a contract signed by end-July.
The exploration contract licenses will be valid for eight years, which may be extended. A contract holder who has a commercial discovery during the license period may apply for a production license.
The official said a decision has yet to be made whether a new round will be launched.
The Barbados National Oil Company (BNOC) produces upward of 1 000b/d from onshore fields. BNOC sends the crude to Trinidad & Tobago to be refined, after which it is brought back to Barbados.
The 1 000b/d represents roughly 15% of Barbados’ fuel requirements, the rest of which are imported. (JB)