Bahamas Petroleum announces final results for the year ended 31 December 2018
25 Apr 2019
Bahamas Petroleum Company, the oil and gas exploration company with significant prospective resources in licences in The Commonwealth of The Bahamas has announced its Final Results for the year ended 31 December 2018.
Period and post period highlights:
In April 2018 lodged an application for Environmental Authorisation with the Government of The Bahamas, representing a significant milestone for the Company operationally and the necessary first step toward commencing offshore field activity;
In May 2018 signed a Confidentiality and Exclusivity Agreement with a major international oil company for which the Company received US$1 million in payments for a period of 4 months of exclusivity. The Company reiterates the view that the willingness of a major international oil company to pay to enter into such exclusive negotiations to be validation of the technical merits of the Company’s project;
Appointed Macquarie Capital Markets Canada as an advisor to assist the Company with various corporate initiatives with the goal of securing funding for the initial exploration well;
Post period end (in February 2019), received formal notification from the Government of The Bahamas that the (current) second exploration period of the licences had been extended to 31 December 2020, providing certainty as to the Company’s licence term, tenure and primary work obligation as it continues to pursue a farm-in or other funding solution for an initial exploration well with the specific forward work programme for 2019 and 2020 to be agreed in the coming months together with any future licence fees due to 2020;
- Cash as at 31 December 2018 of $2.2 million – post period end raised a further $2.54m – such that BPC has sufficient working capital to maintain the farm-out / funding process, the ongoing environmental applications and necessary technical preparations for offshore field activity through the extended licence period; and
- 2018 operating loss and total loss reduced approximately 29% and 59% respectively against previous year. Significant cash saving initiatives continued during the period, including the Board agreeing to increase fee deferrals from 50% to 90%.
Simon Potter, Chief Executive Officer of Bahamas Petroleum Company, said:
‘2018 was a period of progress and consolidation for the Company. Whilst we continue to be entirely focussed on securing the funding needed to drill an initial exploration well, we now have the working capital, Government support, clear and enacted legislation and an adviser in place to achieve this. Further, the surrounding industry circumstances are more favourable, with a sustained recovery in the global oil price and renewed industry interest in frontier exploration that will underpin moving this exciting project forward. We would like to thank all our investors and staff for their continued support and perseverance and look forward to reporting on further developments to you over the course of the coming year.‘
Source: Bahamas Petroleum
New negotiations- EU/ACP pact
VICE-PRESIDENT and Foreign Affairs Minister and Guyana’s Ambassador to the European Union will lead the Region in negotiations for a Caribbean Forum (CARIFORUM)/European Union (EU) Regional Protocol at the ministerial and technical levels, respectively.
The appointment was made when ministers of the CARIFORUM/ACP [African Caribbean and Pacific Group of States] met in Jamaica with a high-level (EU) delegation, to advance the Region’s preparations for the negotiation of the Regional Protocol.
Discussions focussed on the Region’s strategic priorities in the new Post-Cotonou ACP/EU Agreement and timelines for conclusion of the negotiations. The two bodies are engaged in negotiations for a successor to the Cotonou Agreement that will govern trade and development for a twenty-year period commencing 2020.
Strategic priorities under the new agreement include regional integration and cooperation, inclusive sustainable economic growth and development, environmental sustainability, climate change and sustainable management of natural resources, migration and mobility, human rights and social cohesion, peace and security, and support for Haiti. Migration and mobility were addressed. Special guests were the Foreign Minister of the Togolese Republic and Chief ACP Ministerial negotiator and ACP Secretary-General.
IMF Executive Board Concludes Fifth Review under the Stand-By Arrangement for Jamaica
April 22, 2019
Reduction in the primary surplus target by ½ percent of GDP to 6½ percent in the FY19/20 Budget will facilitate higher spending in social assistance, citizen security and infrastructure.
Reducing the highly distortive financial turnover taxes is expected to lower the cost of doing business and increase economic activity. Tackling governance issues swiftly and forcefully is necessary to enhance transparency and accountability, bolster trust in public institutions, and protect public funds.
The Executive Board of the International Monetary Fund (IMF) today completed the fifth review of Jamaica’s performance under the program supported by the Stand-By Arrangement (SBA), on a lapse of time basis.[1] The 36-month SBA with a total access of SDR 1,195.3 million (about US$ 1.66 billion), equivalent of 312 percent of Jamaica’s quota in the IMF, was approved by the IMF’s Executive Board on November 11, 2016 (see Press Release No.16/503). The Jamaican authorities continue to view the SBA as precautionary, and to use it as an insurance policy against unforeseen external economic shocks that could lead to a balance of payments need.
Strong implementation of the reform program continues. After commendable performance under two successive Fund arrangements since May 2013, Jamaica’s public debt is projected to fall below 100 percent of GDP for the first time since FY2000/01—to 98.7 percent of GDP in FY18/19. Unemployment is near all-time lows, business confidence is high, and the economy is estimated to have expanded by 1.8 percent in 2018, buoyed by mining, construction and agriculture. International reserves are estimated to be comfortable under a more flexible exchange rate. All quantitative performance criteria at end-December 2018 were met, and the structural benchmark to table in Parliament amendments to the Bank of Jamaica (BOJ) Act was completed in October 2018. In December 2018, however, inflation was 2.4 percent, triggering staff consultation under the Monetary Policy Consultation Clause; it remained at the same level in February 2019.
Achieving higher growth calls for action from both the public and private sector. For its part, the Government of Jamaica’s FY19/20 budget is reducing the primary surplus by ½ percent of GDP to 6½ percent without compromising the medium-term public debt anchor. The fiscal loosening supports growth and social spending by providing resources for security, infrastructure, school meals and transportation. Further, the cuts to distortionary financial taxes will help support economic activity and job creation. The private sector, for its part, should capitalize on these fiscal measures to increase investment, and create new opportunities for advancing financial inclusion.
Public sector governance shortcomings should be immediately addressed. This could be achieved, in part, by: (i) empowering the Integrity Commission, (ii) passing regulations to solidify a transparent and competency-based process for board appointments to public bodies’ boards, (iii) migrating funds from the government’s commercial bank accounts to the Treasury Single Account (TSA) and closing those accounts, and (iv) reducing the number of public bodies.
Further monetary easing is needed to restore inflation to the midpoint of the 4–6 percent target range. The BOJ’s recent reduction in the reserve requirement on Jamaican dollar deposits will help make policy accommodative but further rate cuts are likely to be needed. In deciding further policy loosening, the BOJ should carefully assess all incoming data. The BOJ should also continue to reduce its FX market footprint, including by limiting its FX sales to disorderly market conditions; the need for further reductions in reserve requirements should be assessed.
Strengthening coordination between the BOJ and FSC and increasing capacity in both institutions is paramount to maintain financial sector stability. Risk-based supervision of financial conglomerates requires the methodical collection, sharing, and monitoring of data and lending standards. Joint work among the regulators will be required to draft legislation for the special resolution regime and to address AML/CFT deficiencies.
An ongoing commitment to strengthen domestic institutions is needed as Jamaica prepares to exit from the Fund financial arrangement later this year. Laying the groundwork for the Fiscal Council, amendments to the BOJ Act for its operational autonomy, and a disaster resilience policy framework are steps in this direction. Overhauling the public sector compensation structure by streamlining allowances and making it performance-based, prioritizing and reducing government functions and size, and upgrading public bodies’ governance are critical for fiscal sustainability.
[1] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.
Table 1 has the relevant economic parameters saved in .pdf format and can be reached by following the links to the file here:- JAMAICA Book1
Sources: Jamaican authorities; and Fund staff estimates and projections.
Notes:- 1/ Fiscal years run from April 1 to March 31. Authorities’ budgets presented according to IMF definitions.
2/ The new methodology uses trade weights for Jamaica that also incorporate trade in services especially tourism.
3/ As of January 31.
4/ Consolidated central government and public bodies’ debt, consistent with the Fiscal Responsibility Law. The most significant deviation from the EFF definition is the exclusion of debt to the IMF held by the BoJ.
5/ Central government direct debt, guaranteed debt, and debt holdings by PCDF, consistent with the definition used under the EFF approved in 2013
6/ Consistent with the Fiscal Responsibility Law (FRL), implementation of the FRL-consistent debt definition began in FY16/17. A backward series is not available since consistent data on public bodies’ debt holdings is not available prior to FY16/17.
7/ The decrease in debt in FY15/16 partly reflects the PetroCaribe buyback operation that generated an immediate 10 percentage point reduction in debt. The increase in debt in FY16/17 partly reflects prefinancing for FY17/18 maturities.
8/ Projections for 18/19 reflect the special distribution from PCDF to Central Government, ahead of its reintegration by end 18/19.
IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: RANDA ELNAGAR
PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG
The full text of the report can be downloaded as a .pdf document from the following link:-
Jamaica : Fifth Review Under the Stand-By Arrangement-Press Release and Staff Report