Saturday, May 28, 2011

Bahamian oil firm ready to drill by 2012

Bahamian oil firm ready to drill by 2012
May, 27, 2011 07:25 PM - Reporter (Tavernier, FL)

May 27--In the wake of news that a deep-water oil-drilling rig will
likely be operating off the coast of Cuba close to Key West by the late
summer or early fall, the head of a petroleum investment firm announced
that drilling in the Bahamas could begin next year.

Paul Crevello, chief executive officer of the Bahamas Petroleum Company,
said this month that seismic experts are surveying the prospective
wells, which span about 1,155 square miles of sea floor of the southern
Bahamas. He said that information about the potential oil reserves that
BPC and the seismic companies it hired have gathered so far indicates
that drilling is "imminent."

"These results and newly signed agreements confirm that the company is
progressing well with its exploration program and is expecting to be
drilling in 2012," Crevello said in a May 16 statement to investors.

Original seismic interpretations of recent surveys show multiple
underwater structures with four-way closures up to 75 miles long and
three miles high, Crevello said. He said that the structures have never
been breached and the reservoir and seal remain intact.

"What is most exciting is the scale and the size of the structures we
have been able to map... .," Crevello said. "The structures identified
are similar to supergiant structures of the Mexican fields in the
southern Gulf of Mexico and the Middle East."

Crevello said some of the fields BPC is leasing in its agreement with
the Bahamas could have yields as high as 500 million barrels of oil.

BPC already has an agreement with Norway's StatOilHydro to be the
operators of three of BPC's offshore licenses in the Cay Sal area of the
Bahamas, about 120 miles east of where Spanish oil company Repsol plans
to start drilling off Cuba in September.

That project, which involves a giant, semi-submersible rig built in
China and Singapore, has raised the concern of several U.S. lawmakers,
including Rep. Ileana Ros-Lehtinen (R) and Democratic Sen. Bill Nelson.
Each vowed to try to stop the project through diplomatic pressure and
legislation punishing companies and individuals doing business with the
Cuban government and its energy programs. [See the related story on Page 5.]

Gas prices down for now

Meanwhile, as talk about offshore drilling heats up, gas prices in the
U.S. have dropped slightly this week. Economists and industry watchers
expect fluctuation as summer nears, but they also say drivers may see
some continued relief.

"Where they go after that is very hard to say," said Frederick Joutz, an
economics professor at George Washington University in Washington, D.C.
"There are supply issues and geopolitical events that could raise the
price once again."

According to AAA, the national average price for a gallon of regular
gasoline on Wednesday was $3.81, down from $3.92 a week ago and $3.86 a
month ago. Discount prices in the Upper Keys were about $3.72 a gallon
at press time.

But the price of gasoline is linked with the price of oil, which went up
above $100 a barrel again at the beginning of the week after forecasts
for the price of Brent crude from the North Sea were higher than
expected from investment firms Goldman Sachs and JP Morgan.

Still, Jessica Brady, a spokeswoman with AAA South, does not expect the
forecasts to impact gasoline prices in the coming months. Where oil
closes at the end of the week on the New York Mercantile Exchange is a
more predictable indicator, she said.

Brady said gas prices are coming down because world economic growth has
slowed and fuel demand is down. Also, the U.S. dollar is strengthening a
bit against the Euro. Oil is priced in dollars, and it goes higher the
more the dollar weakens because of international investors holding other
world currencies.

Mark Isaac, an economics professor at Florida State University, said
drivers shouldn't get comfortable with the lower prices -- or expect
prices to come down much more. The price of oil is always one disaster
away from skyrocketing, he said.

"As usual, there are political and regular economic factors at play.
Right now, the politics is pretty quiet -- Libya is at a stalemate -- so
that's factored in. But politics can turn on a dime on one day's
headline, as we've seen," Isaac said.

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