These are the names of the two offshore blocks obtained by BHP Petroleum for oil exploration. These blocks are located between 40 km to 140 km Southeast of Barbados collectively encompass an area of 5,000 km2 in area and sitting in water depths ranging from 1,200 meters to 2,000 meters.
These depths are deep but with today’s technology, not impossible for the extraction of oil and gas. With the recent finds off Guyana, a greater possibility exists for Barbados to soon become a member of this exclusive club.
There is no guarantee that oil will be found during BHP’s exploration but if it is, now is the best time to prepare for that possibility. If their work bears fruit, there will be an influx of other players rushing to our shores and so the Government must be knowledgeable and well prepared to negotiate with all interested parties.
Before we all jump up and down in glee and hope that Barbadians will all now be rich, increased revenue for the treasury does not mean gas at 5 cents a litre and money for all. On the contrary, any funds received should be spent wisely. Preferably on improving the islands infrastructure, health and welfare along with the creation of a wealth fund for future generations.
So, if oil is in our future, what happens next?
1) We need to be ready to create a Barbados Oil Ministry with qualified lawyers, engineers, visionaries and consultants who could advise the current and future methods of negotiating any and all gas and petroleum contracts. We must learn from what happened in Angola.
2) Investment possibilities for local Barbadians. 40 km offshore will mean from helicopter services to boats taking food and supplies on a 24 hour basis, to increased private air traffic at the airport, increased cargo handling at the port along with more tugs and pilots etc Let us not also forget that institutions like the Barbados Community College may need to be expanded as they will need to provide technical training in industrial welding both above ground as well as undersea, commercial electricians, and pipe fitting.
3) The creation of a wealth fund staffed with the best investment bankers with specific safe (conservative) long term investment strategies.
4) The creation of a new port on the east of the island to exclusively service the oil and gas industry. This should include a state of the art centre for an expanded coast guard and a new quick response long range marine fire fighting service.
5) Improvements to the Queen Elizabeth Hospital to include a helicopter pad for emergencies and an expanded surgical section to include but not limited to a specialized burn unit.
6) The training of Barbadians in the oil industry from non skilled workers to providing scholarships for persons interested in the oil and gas industry.
Careers in Oil and Gas There are countless jobs within the industry, each of them requiring different levels of skill and education. The most advanced jobs require degrees while the entry- and mid-level jobs require more basic training and education. Today there are over 1.700 Guyanese citizens working in their oil industry and we can expect that 20 – 30% of the working population in Barbados will find jobs in this industry when production commences.
The Government would be wise to have an exploratory committee formed and ready. To many the above scenario may sound like a dream but I can assure you that when the first discovery is announced by BHP or others, it will be one day too late to start planning.
Roland Clarke, PhD CMVP CRE, Energy Management and Policy,
What does COVID-19 have to do with oil prices?
At refineries, planners and traders forecast how much crude to buy based on forecasted demand. Those forecasts would normally be off by plus or minus a few percentage points.
As the time of future deliveries, demand is now known and last minute decisions are made to either buy/sell a small percentage of oil in order to balance demand and supply.
The last minute decisions can only be done on a speculative open market.
In the current COVID-19 scenario, the sudden in demand has resulted in refineries not taking massive amounts of crude.
This not withstanding that refineries would have some storage. Privately owned “tank farms” together with oil tankers would also provide a limited storage buffer for the markets. However these storage options may not be enough in the short term.
The current COVID-19 scenario unfolded in less than one month, a shorter period than the term of the traded contracts. Storage became constrained and something had to give.
Any trader left stuck with extra oil on their hands would have to pay storage buffers to off take the unwanted oil. That’s why market prices went negative
1. Should the terms of the oil trading future contracts be shortened to be less than one month?
2. Should nations agreed to a more phased and slower shut down of their economies in order to better manage the constrains?
3. Should pandemic related force majeure clauses be included in oil contracts?
— By Roland R. Clarke PhD CMVP CRE, Energy Management and Policy, University of Pennsylvania 1995.
There has been a lot of chatter in the news lately about the large oil deposits found by Guyana. Barbadians and Caricom neighbours wish the South American republic well and must be concern about recent reports the deal with Exxon is a bad one.
It is shocking that Exxon would seek such an exploitative deal in one of the Western Hemisphere’s poorest countries,” Jonathan Gant, senior campaigner at Global Witness said. Gant also explained the nation’s urgent development needs, such as building new hospitals and schools and protecting itself from rising sea levels, that put 90% of the population at risk.
On queue we read this week the Ministry of Energy and Water Resources issued offshore exploration licences for the Carlisle Bay and Bimshire blocks to BHP Petroleum.
Minister of Energy and Water Resources, Wilfred Abrahams, stated: “While the Government of Barbados is aggressively pursuing renewable and alternative energy initiatives, it also recognizes the importance of diversifying the island’s energy portfolio to include offshore oil and gas development.
Why has the government put oil exploration on the back burner?
Arising from one of the blogs yesterday titled Darcy Boyce Please COMMUNICATE, You Are The Servant the point was made by a Amused that there was exploration on the South East of Barbados many years ago on a land area which spawns Oistins to Silver Sands. The revelation provoked more than a little curiosity in the BU household to follow through on the accuracy of the information. The point was made that the information should be available at the Barbados Archives.
It turns out indeed that the land in question (Oistins to Silver Sands) was recorded on July 25, 1919 in the Courts of Barbados. It was signed by William Kellman Chandler, William Benjamin Hallam Messiah, Henry Graham Yearwood, George Laurie Pile and Charles Ernest Gooding. The period of the Lease was for 50 years and expired May 12, 1972. British Union Oil Company sold out its interest in the Lease to the Gulf Oil Company. Government in 1950nationalised all outstanding oil leases.
In is interesting to note that British Union Oil sold to Gulf Oil and one may reasonably conclude that there had to be some high level of prospectivity in the findings at the time. To be fair, the technology obviously trailed that of today but there was a method back in the day to locating oil we have to admit.
To add to the intrigue the government nationalised the leases. What would have been the consideration for doing so if not monetary? To the layman, and BU is included, there must have been the thinking at the time that oil deposits existed in the area (Oistins to Silver Sands).
Although it is unlikely any government would have the courage to ‘dig up’ Oistins looking for oil, landowners in the area may want to be cautious when considering a decision to SELL! They should go to the Barbados Archives or where ever the information is lodged to be seized with all the information about where their lots land in the tract recorded by the Courts in 1919..
The national average for gasoline is $3.40 a gallon right now. But according to Dr. Kent Moors, the “oil constriction” he – and he alone – sees coming could slam Americans at any time. And we could have $5 gas by as early as March. Here’s his official warning. As you’ll see, this is also a massive profit opportunity, especially for those who “get in” before the rest of the world even knows what an “oil constriction” is.
December 5, 2011 Power Politics and the Price of Oil by Dr. Kent Moors
Dear Oil & Energy Investor,
Over the past three days, two events at different ends of the globe have reminded us that political developments can directly influence global oil prices.
First, on December 2, just as I was departing theUnited States, the Senate gave notice that it was prepared to tighten sanctions againstIranover its nuclear program.
And yesterday, the parliamentary elections here inMoscowdidn’t quite provide the results Prime Minister Vladimir Putin and his party had expected.
The catalysts of each event were quite distinct, and each event was not directly the result of energy policy or related costs. However, both events will likely influence the international oil market in similar ways.
Both will likely restrict the flow of oil. And this constriction should be a sign to investors that crude prices will be going up.
If we are to believe the media’s analysis on the state of British politics based entirely upon the General Election results of Thursday night into Friday – one would assume that the gridlock often seen in Capitol Hill, Washington DC was now dawning on the shores of Britain for the first time in a generation causing an already beleaguered market to go into a Greek-style tailspin.
But this is what the Athenian model of democracy has resulted in. Much can be said about Greek culture (the cradle of democracy and civilization) but moreover as we witness the bedlam, anarchy and economic seismology in Greece at the moment – we can take little comfort in the modern machinations of political intrigue.
On another equally troubling note, BP (British Petroleum) is in the news AGAIN. We must conclude that these oil companies are criminal enterprises propped up by evil governments for the sake of wanton profit and excess. Look at SHELL* and its antics! Has Southern Farmers in Barbados been adequately compensated in a 15 year-old saga which has robbed many of their livelihoods? What about the Ogoni people of Niger Delta? What about these folks in my neck of the woods?
All the attention in recent weeks has been the sour taste LIME has been creating in the mouths of Barbadians. Having said that we were impressed with the sexy 51 page booklet which LIME distributed in the Sunday Sun newspaper today. Must have cost a pretty penny to trot out the thousands of copies to stuff the Sunday Sun newspaper.
With all the attention on LIME the Barbados Light & Power Company (BL&P) flies under the radar, ever assured of its well-cultivated corporate image. There was a time when the Marketing Manager Mr. Stephen Worme was inclined to communicate directly to the BU family on matters raised, that stopped when we started to ask the hard questions.
Mr. Worme our communication channel is still open, feel free to challenge or expand if required.
Six months ago with the price of oil approaching USD150.00, BL&P undertook a PR blitz using the traditional media to sell their budding strategy of delivering alternative energy solutions. On reflection, the blitz was used to deflect public criticism by those of us who still believe that BL&P has been too passive over the years concerning its renewable energy program. Mr. Worme, the spokesman for BL&P has been quick to lecture Barbadians about the prohibitive costs associated with augmenting their fossil fuel dependency with wind, solar and the other forms of power generation. Continue reading →
With oil prices recently declining below the $110 level, it is not all that surprising to find that gasoline prices are following suit. Over the past two months, the average US price for a gallon of unleaded has declined over 40 cents per gallon. While this is welcome news, gasoline prices are still higher in inflation-adjusted terms than at any point prior to 2008 - Source - U.S. Energy Information Administration
Barbadians have started to breathe a deep sigh of relief at the news that world oil prices have tumbled from the $150.00 per barrel to $100.00 in recent days. Several reasons have been given by the market analysts but at the top of the list is a weakened demand caused by slowing down in global economies. Whatever the reasons are the Thompson government would be urging the agency responsible for importing oil into Barbados to button as many future contracts as resources would allow. The objective would be to create a buffer to the external shocks created by volatile oil prices. This would have the affect of giving the government time to do its work.
The last eight months has been a rough initiation!
The Thompson government should not celebrate too quickly because there is news surfacing that OPEC, the oil cartel responsible for producing 40% of the world’s oil maybe about to make a decision to cut back production to stop the price of a barrel of oil falling below $100.00. This comes against the background of oil producing countries and the oil refiners having earned billions of dollars in recent months. The greed is enough to make anybody sick.
Lord come for your world!
The Thompson government has been saying the right things about the need to create a viable energy policy, so far we have not had the feeling based on what we have seen that any major initiative is underway. BU appreciates that there is enormous research required to support a decision to wean Barbados away from the tentacles of fossil fuels and the several interest groups that feed from it. But doesn’t commonsense dictate that we must and soon?
While Barbadians revert to old lifestyles caused by falling oil prices, some of us will continue to offer our concerns about the reluctance of Barbados to fully engage a renewable energy policy. Having said that we find the following article which appeared in the London mail very interesting.Continue reading →
Former Minister of Social Transformation Hamilton Lashley was quoted in the media from his contribution to the current Estimates Debate, that against the backdrop of rising oil prices, Barbados should accept the President Chevez sponsored PetroCaribe deal. Funny that we can’t seem to remember Mr. Lashley shouting so loudly on this matter when he was on the government side. If we are being too harsh on the sitting member from St. Michael, we apologize.
There has been a lot of debate about the PetroCaribe offer from President Chevez of Venezuela to his Caribbean and Latin American neighbours. At the end of it all Barbados under the former Arthur government excused itself from the arrangement. Interestingly however, Dominican Republic (DR), Jamaica and Dominica have signed on. Remember that DR is now part of Cariforum which is the Caribbean group thrashing-out an Economic Partnership Agreement (EPA) with the European Union (EU). It is no surprise that Cuba and Nicaragua are also PetroCaribe members.
Hamilton Lashley should be careful what he is wishing for. We recently read a document that is highly recommended reading for Lashley.
Today, (Thursday 3rd January 2008), I visited Oistins at the Southern Farmers request and witnessed a bucket being lowered into a well close to the road and where an Urban Development project is taken place. The well was about 500 feet from the beach and when the bucket was lifted it contained what appeared to be almost pure kerosene.
Also there was Mr Lashley, Mr Boyce, Mr Jones and Senator Lowe of the DLP, The PEP candidate, several members of the media including the Advocate, Nation and CBC. I did not see any Government representative. I understand that Shell has admitted liability for the leaking pipes but the the settlement offered is simply not adequate. I call on Shell to settle and the Government which has allowed this matter to drag on for the entire duration their office.
The long suffering Souther Farmers group have taken to increasing their lobby for a solution to the longstanding dispute with Shell Oil. Maybe it is not a bad idea with the General Election imminent. In case you have forgotten there is a pipe line owned by Shell which has leaked oil onto the lands of the Southern Farmers and which has negatively affected their ability to produce crops. We all can appreciate that land to a farmer can be likened to what a hammer is to a carpenter. We invite BU readers to read the extensive coverage on BFP – see pictures below of the barren lands owned by the Southern Farmers submitted to the blogs and the note from one of the concerned Southern Farmer:
Here are the pics I promised. The shed is one that Shell put a pump to draw oil off the well which is situated just behind. Everyday, a tanker would collect it. This well is situated approximately 60 yards from the major spill in 1994. This well which was connected to the rural irrigation system was disconnected as it was too contaminated with oil. The crops you see are pigeon peas which I was forced to plant as I discontinued the use of the water, and used natural rainfall.
Look closely and observe the brute force of shell. They just drove their way over the ground which I am leasing, Those drums were all filled , and after a fire broke out one evening, they just dumped the oil all out over the land. I spoke to the guys in Oistins, and was not met with the slightest apology . Notice all the trees which were singed. They all died eventually, and I did a replant.
This is how our country allow corporate giants to treat our country.
Thanks for your concern.