. Senior Business Reporter. Challenger Energy Group formerly Bahamas Petroleum Company said in its recently released annual report that it is experiencing a frustratingly slow process in renewing its four exploratory licenses into a third exploration period, though the company suggests it has experienced long delays from The Bahamas government before. Notwithstanding that the group s application to renew the southern licenses into a third exploration period has now been pending for a considerable length of time, management considers this to be within the bounds of normal expectation in The Bahamas, given that i the renewal of the southern licenses from the first exploration period into the second exploration period took almost five years, ii a new government was elected in The Bahamas in September 2021, and iii COVID19 pandemic related lockdowns caused significant administrative delays all across the world, CEG said in its report. Challenger said that while it is still seeking the renewal of the exploratory licenses it is also looking at other ways to monetize those licenses, especially given that Prime Minister Philip Davis has said on several occasions that if there is found to be commercial quantities of oil in the ground in The Bahamas, it will be left in the ground. CEG said while it has not made significant progress with license renewals since it completed its first test well which had no commercial quantities of hydrocarbons in 2021, the company has hopes that it will make better progress with the government over the next 12 months. In the next 12 months we will be looking to see a result from efforts to realize value from our assets in Trinidad, and, as noted, we hope to reach a resolution in relation to our licenses in The Bahamas in the same timeframe, the report said. The company is hopeful that the licenses will be renewed so that it can explore other license areas, which they contend have the potential for commercial quantities of oil. They also insist that their first test well still has the potential for commercial quantities if it is drilled deeper down than was drilled in 2021. The company said, though, that more test wells would only be drilled if funding could be secured for such an exploration. The company said as of 2023 the cost of a test well sits close to 100 million. Challenger Energy holds four exploration licenses offshore in The Bahamas, the report said. In early 2021, the Perseverance1 exploration well was drilled in this license area, but it did not result in a commercial discovery at that location. However, several other structures and drill targets across the license areas remain prospective, and the technical findings from Perseverance1 suggest potential in deeper Jurassic horizons. In March 2021, the group notified the government of The Bahamas of its intent to renew the licenses for a third threeyear exploration period. This renewal is still pending. Additionally, the company is considering various other options for achieving value from these assets. . Another bone of contention between CEG and the government has been a disagreement on how much CEG owes the government for annual rentals associated with the licenses. The company said in its report that both entities had agreed to a process to finalize a number, though that process is also still ongoing. CEO of CEG Eytan Uliel toldGuardian Businesslast year that his company has had some preliminary discussions with the government on the idea of monetizing the license areas through some kind of carbon credits deal, and that CEG had made a formal proposal to the government. Uliel told this paper that his company has done a considerable amount of work so far to understand the carbon credit market that has been touted frequently by Davis as the country s answer to not drilling for oil. Uliel said it is not yet understood where CEG s oil exploration license holdings and the government s carbon credit ambitions intersect, but he contends that some form of agreement with CEG is required if the government wishes to move ahead with its plan to use the knowledge of the existence of oil as an asset to leverage carbon credits. Having invested more than 150 million in The Bahamas to date and having drilled one test well, he insisted that CEG wants to see some kind of return on its investment in The Bahamas. Senior Business Reporter. . . . . . . Log In. Your browser is out of date and potentially vulnerable to security risks.We recommend switching to one of the following browsers:
Challenger Energy Group faces delays in renewing exploratory licenses in The Bahamas. The company is exploring ways to monetize the licenses amid uncertainties about license renewals and government regulations. Despite setbacks, the company remains optimistic about future progress and potential commercial oil discoveries. Contentions with the government over rental fees and exploring carbon credit deals add to the complexities of the situation.