Prime Minister Freundel Stuart today signed a deal for oil exploration in Barbados’ southern territorial waters that he said could lead to the island moving from being a net oil importer to an exporter in ten years.
Stuart signed the agreement with Australian company BHP Billiton, which will begin mapping these territorial waters in blocks named Carlisle Bay, measuring 2,498 square kilometres, and Bimshire, 2,506 square kilometres.
BHP Billiton Vice President Dr Niall McCormack signed on behalf of the firm, reputed to be the world’s largest mining and resources company, operating across the world for more than 100 years.
“April 29, 2015 will be etched in our minds as a historic milestone in Barbados’ efforts to realize its offshore petroleum potential,” Stuart said before inking the deal in the conference room of Government Headquarters, Bay Street.
“Today, Barbados will make a bold step towards securing its energy future by signing two offshore exploration licences with the highly regarded international oil company, BHP Billiton.”
To stress the significance of this deal, the Prime Minister spoke of the drain which oil imports have on the island’s foreign exchange. He cited an annual average bill of $542.3 million for the ten years leading up to 2013, but noted that imported fuel consumption was growing.
To satisfy this growing demand, $807.8 million was spent on imports in 2012, the equivalent of 9.6 per cent of the Gross Domestic Product.
“Expending such significant amounts of capital on the importation of fossil fuels has impacted Government’s ability to allocate the desired level of financial resources across other areas of critical national importance, such as education, health and social development,” he said.
But Stuart said that today’s agreement for exploration of two of Barbados’ 26 offshore blocks with potential hydrocarbon reserves, could herald an absolute turnaround in the nation’s relationship with petroleum products.
“In the event commercial quantities of hydrocarbons are discovered in Barbados offshore, our country can transition from being a net importer of fossil fuels to a net exporter within the next decade,” he said.
Barbados has marginal inland petroleum extraction operations at Woodbourne, St Philip but Stuart said this operation “is showing signs of steady decline, producing on average, 700 barrels of crude oil and 1.9 million cubic feet of natural gas per day”.
That declining figure contrasts with the island’s current consumption of just over 10,000 barrels of oil per day.
There is yet no official estimate on the amount of crude oil that might be lying in Barbados’ territorial waters, but experts believe the prospects are good for this island that lies 226.9 miles from the capital of oil-rich Trinidad and Tobago.
“Barbados’ offshore petroleum acreage remains largely underexplored, with both local and international geological experts agreeing that all the necessary elements for a productive petroleum system are present,” Stuart noted.
McCormack, said that the Carlisle and Bimshire blocks earmarked for exploration “lie within a geologic province known as the ‘Barbados Accretionary Prism’ in 1,200 to 2,000 meters of water, between 40 and 140 kilometers south-east of the island”.
He explained that exploration, leading ultimately to the drilling of wells, will be done in phases, using “a new 2D seismic survey programme of over 3,200 line kilometers”. That first survey will span three years.
“If the results of this initial survey are promising, BHP Billiton may then elect to proceed into the next exploration phase to acquire and process approximately 1,500 square kilometers of 3D seismic covering both blocks.”
He said once satisfied at this point, “the next step will be the drilling of at least one exploration well in each block”.