BARBADOS – Barbadians will eventually have an opportunity to invest in the blocks currently available for hydrocarbon exploration once oil is found in them.
Word of this has come from Minister of Energy and the Environment, Elizabeth Thompson, who said a provision had been put in place which reserved Government the right to take a stake in the oil company’s well or bid block on the market.
“Under the terms of the agreement, if they were to hit a dry hole, the expenses would fall to them. However, as long as there is a commercial find of oil in their bid block, the Government would take a percentage of the profit. We would pay them back for their exploration costs, but we would take a percentage of the profits on that well over and above the taxes that would be payable.
“So, by taking that, Barbados is securing for itself, for present and future generations an additional revenue stream and ownership in every single well. In addition, what we expect to do in the future is to set up a corporate regime which will allow Barbadians to co-share in the ownership of these blocks,” Ms. Thompson stated.
She noted that some Barbadians already had shares in local state-owned and private sector companies and she, therefore, hoped that persons would purchase shares in the entity that government would set up and “get a really good return on their investment.
“I am hoping that this is a way that several Barbadians will see as making money for themselves and their families. There is no risk because you do not pay for dry holes or purely exploratory wells. Your benefit kicks in when we know for sure that it is a commercial find, so you will be buying shares knowing you are going to get an immediate return on your investment because there is a commercial find of oil on that bid block,” she explained.
The present bid round covers an area of approximately 70,000 square kilometres. Twenty six blocks have been placed for this round, but Government has opted not to place two – “A-Moses” and “Oistins” – on the market at this time. The average size of the blocks is 2,700 sq. kms, with the largest being 5,025 kms.
Bids are expected to be awarded and contracts signed by January, 2008.
