Earthjustice: Denying BPC not only within lawful authority of The Bahamas but also consistent with govt’s public opposition to oil drilling
NASSAU, BAHAMAS — A US-based non-profit specializing in environmental law, Earthjustice, has asserted that the Bahamian government has full legal authority to deny the Bahamas Petroleum Company’s (BPC) request to review its licenses.
The organization, in a letter addressed to Prime Minister Dr Hubert Minnis and Environment Minister Romauld Ferreira, contended that the Bahamian government “has broad discretion under the law to deny BPC’s request for renewal of its licenses and that BPC has no right of renewal”.
Earthjustice said it came to that conclusion after having reviewed relevant provisions in the Petroleum Act and its accompanying regulations, along with the license agreement.
BPC undertook a controversial exploratory well exercise in its search for commercial quantities of oil in The Bahamas. In February, its initial well came up dry; however, it has since announced its intention to continue exploration in Bahamian waters and drill another exploratory well amid an ongoing court battle with environmentalists.
BPC’s incoming chief executive, Eytan Uliel, recently stated during a podcast responding to investors’ queries that it was “our right to extend” the company’s four oil exploration licenses beyond their end-June 2021 expiration.
He confirmed that BPC, which is soon to be renamed as Challenger Energy Group, has submitted the necessary documentation to the government to start the renewal process.
Earthjustice said based on the available authorities, “we conclude that the government of The Bahamas has broad discretion under the law to deny BPC’s request for renewal of its licenses and that BPC has no right of renewal”.
“In addition, such denial is not only within the lawful authority of The Bahamas, but it is also consistent with the government of The Bahamas’ public opposition to offshore drilling activities as well as its nationally determined commitments under the Paris Agreement,” it said.
According to the non-profit, BPC’s latest renewal request, unlike the previous, is discretionary.
“There are multiple reasons for the minister to exercise this broad discretion to deny BPC’s renewal request,” Earthjustice noted.
“First, in order to be eligible for a renewal, both the 2007 Licence Agreement and Petroleum Act require BPC’s compliance with ‘the act, the regulations and terms and conditions in [the license]’. Judging by statements by both BPC and the government of The Bahamas, it seems that there has been a failure to pay rents under the existing license agreement.
“In addition, the post-well technical analysis remains to be submitted and BPC indicates that various other amounts remain in dispute. BPC cannot renew its license without meeting these threshold obligations.”
The non-profit also argued that the company’s efforts to seek a funding and operating partner for the next stage of its activity in The Bahamas demonstrate that it does not have the assets or operational capacity to utilize the licenses.