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Bahamas Petroleum Co delays oil exploration due to COVID-19

Bahamas Petroleum Company announced on Friday that it has rescheduled the drilling of Perseverance #1, its first exploration well in The Bahamas, due to spread or coronavirus

“As a result of the rapidly unfolding impact COVID-19 is having on operations, the commencement of drilling is now anticipated to be in late May/early June 2020 (vs prior estimate of April 2020),” the company stated in a press release.

The company said by that time it will avoid any expected peak in the COVID-19 response and, at the same time, complete operations before the peak risk period for hurricanes in The Bahamas.

BHP said experts have predicted the spread of the virus will last for another eight to ten weeks, which would coincide with its drilling timetable, hence the delay.

Notwithstanding, the company emphasised its commitment to completing the exploration of Perseverance #1 on budget and on time, in accordance with its obligation to The Bahamas and as stated in its licence.

So far, the company said that disruptions to global supply chains — especially for goods and services coming from Asia, limitations to free movement for some project essential supplies, and onerous restrictions on travel for the movement and mobility of key project personnel, staff and contractors — have pushed back the commencement of drilling in The Bahamas.

“As a result of the rapidly unfolding impact COVID-19 is having on operations, the commencement of drilling is now anticipated to be in late May/early June 2020 (vs prior estimate of April 2020).”

— Bahams Petroleum Company

These disruptions have resulted in downtime periods that could increase the cost of operations, which business loss insurance will not cover.

“For this reason, the company has also sought to plan for drilling to occur outside of the peak risk period for hurricanes in The Bahamas (being August to October), given that any unexpected downtime during operations introduces additional commercial risk, as from the company’s perspective downtime periods have to be paid for at essentially the same day rate as normal drilling operations,” BPC said.

However, the company said its initial estimate of between US$25 million and US$30 million, with a contingency US$5 million, should not change despite the schedule change.

Simon Porter, chief executive officer, Bahamas Petroleum Company (Photo: BCP)

“Whilst incredibly frustrating given all the hard work undertaken to get to the current state of drill-readiness, the responsible thing to do is to slightly reschedule commencement of operations, to later in 2Q 2020, to a time when continuous delivery of operations can be better assured whilst also still enabling operations to be completed before the peak risk period of the Bahamian hurrican season,” Simon Porter, Chief Executive Officer of Bahamas Petroleum Company, said.