The long mooted hunt for oil and gas in Barbados’ territorial waters is moving closer to reality.
Following last month’s announcement by Minister of Finance and Economic Affairs Chris Sinckler that Government was close to signing an agreement enabling Australian company BHP Billiton to start its search for hydrocarbon resources, authorities are about to amend the laws governing such work.
And indications were the named company and others keen to explore offshore Barbados would be given 25 years to do so, but only after meeting certain conditions, including environmental.
The Offshore Petroleum (Amendment) Bill, 2012, which is a legislative change to the Offshore Petroleum Act, 2007 and is on Parliament’s Order Paper for debate when the Lower House sits on Tuesday, stipulated that companies like BHP Billiton would have to submit environmental impact assessments within 90 days, and an environmental plan within 60 days of their receiving notice from officials.
Under the proposed legislative changes an environmental plan in the context of offshore drilling will be one that “specifies the measures to be taken to prevent any adverse environment impact from occurring as a result of petroleum operations or to mitigate the impact, where the impact is not preventable”.
In the case of the development plan, which also had to be handed over before drilling started, this would set out activities, including those related to production, drilling and worker “to be carried on by a licensee to develop a licence area under a production licence”.
The amended Section 24 of the Act said in part: “The designated authority shall submit to the minister responsible for the environment for his approval, any environmental assessment and environmental plan received pursuant to an application for a production licence.
“Where the minister responsible for the environment approves the environmental impact assessment and environmental plan, the designated authority may issue a production licence to the applicant.
“A production licence shall be issued in the prescribed form for a period not exceeding 25 years.”
Additional 2007 companion legislation, the Offshore Petroleum (Taxation) Act, was also to be amended.
These laws were also crucial because they “allow the profit tax rate applicable to taxable income to reflect differences in the quality of crude oil” and “refine the provision made for the carrying forward of losses to the next succeeding income year”.
While delivering his June 26 Financial Statement and Budgetary Proposals, Sinckler told the House of Assembly the offshore drilling programme “ran into server difficulties at the beginning of the economic recession when virtually all of the proposed bidders backed away from pursuing the investment”.
“As you know Sir there were almost major deficiencies identified by several of these companies with the two pieces of legislation — the Offshore Petroleum Exploration License Act and the Off-shore Petroleum Taxation Act. We have now completed the draft amendments and will very shortly lay the Bill in parliament for debate and passage,” he said.
“I can also alert the House that we have reached agreement for an exploration with the one remaining company from the first batch of bidders, BHP Billiton, who will be free to proceed with its operations once the amendments are passed in Parliament. We expect that that agreement will be signed shortly and Government will receive a signing bonus of US$6 million.” (SC)