Government-owned Barbados National Oil Company was established in 1982, and produces crude oil, natural gas, and imports the country’s requirements for motor fuel. While Barbados is currently a net energy importer, a new exploration deal, signed between the company and Anglo-Australian resources giant BHP Billiton, looks set to change the island’s fortunes. Winton Gibbs, the company’s general manager, talks to The Report Company about Barbados’ oil industry.
The Report Company: How would you define Barbados?
Winton Gibbs: Barbados is a country with infrastructure that works. Our utilities, electricity and communications can compete with those of any country in the region. Barbados is a country which in recent times it has been erroneously labelled as a tax haven but that is far from true. Barbados is a safe place to live and to work, and it’s a destination which will support international business.
TRC: What is happening in the oil and gas sector in Barbados today?
WG: We have a licence to develop our offshore potential. We have some very small oil and gas reservoirs which we produce from fairly efficiently, and that crude oil output is processed in Trinidad and the yield is then sold to our power company for our power generation. That covers only a small percentage of our demand. Last year, we signed an exploration contract with BHP Billiton, and geologists tell us that the prospects of both oil and gas look very good. We believe that while we are a net importer today, in the next six to eight years, we should change that status to net exporter.
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TRC: At what stage is the agreement with BHP Billiton?
WG: Barbados National Oil and BHP Billiton are developing a joint operating agreement, and BHP Billiton is currently looking at the environmental impact study, so this is proceeding simultaneously. We believe that in a short while, we will be able to sign off on those agreements. Once the environmental impact study has been agreed upon and signed, I think BHP Billiton would want to do some additional review of the existing seismic data, and I believe they are proposing to do some additional work to determine the prospects. Our technical teams have been in contact and speaking with each other.
TRC: How do you see Barbados National Oil Company in the next five to 10 years?
WG: Five to 10 years down the road, we will probably not be called Barbados National Oil Company but rather Barbados National Energy Corporation. Our focus will be mainly on the development of offshore oil and gas, but we will also play a significant role in the renewables sector. We believe that we have a comparative advantage with solar energy, and we will maximise the benefit to the community in that regard. We are also speaking to a number of potential partners in wind energy and therefore we will diversify the company to wind power as well. In five years’ time, I would think this company would be significantly transformed into an energy delivery company. In order to achieve this, we are speaking mainly to local investors, but the opportunities exist also for foreign technology transfer.
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TRC: What scope is there for collaboration with the UK in the oil and gas sector?
WG: There is opportunity in the oil sector in terms of services that people can provide. We are an isolated, remote area. All of the services that we use within the industry we have to bring in from abroad, and I know that there are a number of service companies in Britain that can come and partner with us. We do have issues with sand production in our wells, so we would look for companies with expertise in sand control and expertise in how more efficiently to produce oil. We have only been producing oil as a primary source, but there is a great opportunity to do secondary recovery. There is room for partnership. With respect to renewables, we are comfortable with the solar panel technology. What we would like to do is to invite partners in other forms of renewables, especially wind energy. We would embrace any investor with that technology to partner with us.
TRC: What is your most important objective for the company?
WG: As a government-owned company, our objective remains delivering energy products to the consumer at the most competitive price. My aim is for that basket of products that is delivered to the consumer to be widened. We must be able to positively impact the consumers.
TRC: What would be your message to investors looking at Barbados?
WG: We all know that Barbados is a lovely place. It has beautiful beaches and sea, and friendly people. Barbados is a safe place to work and Barbados National Oil Company will do what is in its power to create the business climate to make a partnership with investors successful.