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Saturday, May 26, 2012

Applied Drilling Technology International (ADTI)... The company hired by the Bahamas Petroleum Company (BPC) to plan and execute an exploratory well in Bahamian waters... says it believes it will be drilling by the end of next year

ADTI: We expect to drill by end of next year

By Jeffrey Todd
Guardian Business Editor

Nassau, The Bahamas

The company hired by the Bahamas Petroleum Company (BPC) to plan and execute an exploratory well in Bahamian waters says it believes it will be drilling by the end of next year.

Applied Drilling Technology International (ADTI), based in Texas, is a division of Transocean, one of the largest offshore drilling contractors in the world with thousands of employees and billions in annual revenue.  While ADTI refers to itself as a turnkey operator, providing an all-inclusive approach to drilling, top executives revealed to Guardian Business that, in this case, they will only provide project management services for the Bahamas Petroleum Company.

"We're doing the pre-planning and design of the well. We design it with our people here, on our staff. Once the design is done, we move into the logistics planning stage," said Jess Richards, managing director at ADTI. "Once that is done, we will have a small team of engineers that will manage the day-to-day operations on the ground in The Bahamas. There will be supervisors on the rig.

Between our base teams and offshore teams, you're looking at around 12 people."

While not wishing to comment on the geological makeup in The Bahamas, Richards said, "We believe there is an incentive to drill a well. We believe we will be drilling by the end of next year. We're working as directed by BPC. All indications that we have received show we're on track."

According to BPC's drilling licenses, the company is required to spud an exploratory well by April of 2013. The ADTI director said his company, compared to other areas of the world, has not done a lot of exploration in the Caribbean. ADTI does manage wells all over the world, he added, especially in the Gulf of Mexico, which holds many similarities to Bahamian waters.

"It'll be a challenging well, but that's our forte," Richards told Guardian Business.

Research fellow at the Center for International Energy and Environmental Policy at the University of Texas, Jorge Pinon, called Transocean, and by extension ADTI, "a quality outfit with a high level of experience and expertise".

He said Repsol's failure to strike oil off the northern coast of Cuba was unfortunate. But he emphasized that this setback has nothing to do with prospects in The Bahamas.

"The fact Repsol came out dry is not an indication you also don't have other opportunities in Cuba or The Bahamas. So no, the fact it failed does not mean The Bahamas is not a geologically attractive area," said Pinon, who is also the former president of Amoco Oil in Mexico and Latin America.

The comments echo similar assurances made by Simon Potter this week, the CEO of BPC.

Potter said BPC's target represents an "entirely different structure". According to the company's 2012 annual report, also released this week, 3D seismic surveys have yielded very positive results.

It found that the basement is deeper than previously mapped, implying a thicker source rock.

An event that could more accurately predict the fortunes of BPC is another well being spearheaded by Zarubezhneft, a Russian operator in Cuba, immediately adjacent to BPC's "southern blocks".

Share price for BPC, listed on the London Stock Exchange, ended yesterday's trading down more than seven percent, finishing at 6.91 pence.

On Tuesday, Adrian Collins, non-executive chairman of BPC, acquired 200,000 ordinary shares in the company at a price of 7.12 pence each.

Shares have suffered so far this year, registering a marked decline compared to when they were worth as high as 16 pence earlier this year.

May 25, 2012