Bahamas Petroleum secures offshore license in Uruguay

Bahamas Petroleum secures offshore license in Uruguay
The Bahamas Petroleum Company logo.

NASSAU, BAHAMAS — The oil and gas exploration company expected to commence exploratory oil drilling in The Bahamas later this year has been awarded an offshore license in Uruguay.

Bahamas Petroleum announced yesterday that it has been awarded the AREA OFF-1 petroleum license offshore following efforts to expand its portfolio option.

The license has a total area of around 15,000 km2, and is situated in water depths from 20 to 1,000 meters, around 100 kms off the Uruguayan coast.

BPC said that the license contains a management estimated resource potential of up to 1 billion barrels of oil equivalent with significant running room.

The license has an initial four-year exploration period, during which time BPC will reprocess around 2,000kms of legacy 2D seismic and undertake a number of new geotechnical studies. Apart from the costs over the initial four-year period, which BPC expects to be around $200,000 per annum, there are no annual license fee payments and no drilling obligation.

The oil and gas explorer said the license compares to its previous “low-cost option” licenses in the Bahamas which saw ‘a modest work commitment over four years that secures a sizable, technically high quality, frontier play, with regional seismic available and exciting exploration upside.’

The company recently announced plans to start its exploratory oil drilling in The Bahamas on December 15.

BPC received formal notification from the government in February to proceed with plans to drill exploratory oil wells before the end of 2020. The company has four licenses in the territorial waters of The Bahamas, which was extended until December 31.

BPC now estimates the total cost of Perseverance #1 to be in the range of $21 million to $25 million – a material reduction from the most recent prior comparable estimate.

In addition, the company continues to assess there to be up to $5 million in potential operating contingency costs, and has scoped up to $5 million of provisional costs for additional formation evaluation work that the company could elect to incur in a success case.

BPC has noted however that the extent to which these contingent elements are utilised will not be known until closer to or during drilling operations, and decisions in relation to incurring those items will be based on capital availability at that time.