BPC granted force majeure extension for Bahamas licence

Bahamas Petroleum Company (BPC) has been granted an interim force majeure extension to the second exploration period for its southern licences in The Bahamas, which will ensure the drilling of the Perseverance #1 well can be completed within the planned timeframe of the rig contract.

BPC said in an update on Thursday it has received proposals for suitable well control insurance policies for the upcoming Perseverance #1 well.

The company has instructed its insurance broker, AON, to begin the process of placing and binding that policy.

BPC expects this process to complete within the next eight weeks.

As previously reported, BPC back in May signed a drilling contract with Stena Drilling for the provision of a rig for its Perseverance #1 well, thereby ditching its previous plans to use a Seadrill-owned rig for this well.

Under the agreement, Stena may provide any of the Stena IceMax, Stena Forth, or Stena DrillMax or, subject to agreement, any other suitable Stena rig.

Liaison between BPC’s drilling team and Stena Drilling is already underway, with the teams working to prepare bridging documentation to manage the interface between the two companies’ management systems, BPC said.

This work will continue over the coming weeks along with protocols to assure continuous operations and updating of the logistics plan for uninterrupted essential supplies and equipment to the drillship.

The rig is expected to arrive at the field between mid-December 2020 and February 2021.

The company has also received formal notification from the Government of The Bahamas that on an interim basis, a 3.5 months force majeure extension to the second exploration period of the company’s southern licences in The Bahamas has been granted.

The extension is such that the current term of those licences will now extend to at least mid-April 2021, and by which time BPC must have started well activities.

Given that the relevant force majeure event is presently continuing (namely, the impact of the Covid-19 pandemic, currently ongoing in both The Bahamas and in relevant international jurisdictions), BPC remains in constructive dialogue with The Government as to the ultimate full extent of the force majeure extension.

However, the interim extension to mid-April 2021, as now confirmed, is sufficient to provide certainty for the purposes of the drilling of Perseverance #1.

The well is scheduled to start in the window of 15 December 2020 to 1 February 2021.

Simon Potter, Chief Executive Officer of BPC, said: “Already discrete teams are focused on delivering immediate objectives, though none more important than the dedicated drilling team’s total focus on the commencement of the Perseverance #1 well in The Bahamas later this year”.

Potter also added: “We are also pleased to have received confirmation from The Government of The Bahamas of an interim force majeure extension to our southern licences, sufficient to ensure drilling can be completed consistent with the timelines contained in the rig contract with Stena Drilling, and in full compliance with the term and obligations of the licences”.