EXPLORING SAFELY AND RESPONSIBLY:SAFEGUARDING THE ENVIRONMENT

June 2013: FISHING COMMUNITIES

ROBERTA QUANTENVIRONMENTAL SCIENTIST

SIMON POTTERCHIEF EXECUTIVE OFFICER

Disclaimer

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Oil Exploration Mitigation of Major Associated Risks

Potential Benefits of Successful Oil Exploration

Summary

3

Exploration: Where Are We Looking?

Concept born: 2005• Prospectivity

• Technology

• Oil Prices and Costs

• Fiscal and Legislative stability

Licences to explore: 2007

Listed London: 2008 (AIM: BPC)

Owned by the shareholders

Nassau office and staff

Distance from Shoreline• Nassau 168 miles, Andros 80 miles

• Cuba: 25 miles

• GoM closer to Grand Bahama

Anticipated BPC location

Commenced December

Previously drilled wells

★★

4

Exploration: The Basic Exploration Questions

Source

Reservoir

Structure

Seal

Where to drill?

Oil Generation

Migration

Time/Space

Enduring

Shared reward?

5

Exploration: What has been found with $50 million spent

DepthDepth

ClosureArea

Fold B700m~75kms423 km2

(104,526 acres)

Fold C950m~25 kms63 km2

(15,814 acres)

~10 Kms

High to Low

Competent PersonsReport

• Concluded multiple billionbarrel potential

• Residual source risk• Can only be reduced by

drilling

Oil Exploration

Mitigation of Major Associated Risks Potential Benefits of Successful Oil Exploration

Summary

Preparation: Perseverance #1

7

PreventiveMeasures

Qualified Management Team Qualified International Operator 12 Months of Well Planning Blow-out Prevention

MitigationMeasures

ResponseMeasures

Environmental Impact Assessment Environmental Management Plan Safety Management Plan Member of Tier III Oil Response

Organization

Oil Spill Response Plan Activate Oil Spill Response Limited

– Ability to immediately mobilize vessels,aircraft, containment equipment andskimming equipment

Top Hat, Capping Stack

LicenseRequirement

CompletedIn Production

Preparation: Well Plan

Drilling rig with upgraded andadvanced safety mechanisms

Water depth at location: 1,500 feet

Planned well depth: 22,500 feet

1 year to plan, 120 days to drill

Anticipated well cost: $120 million

3D seismic data to safely plan well

8

N

Major ShippingLanes

Atlantic OceanAbaco

GrandBahama

Eleuthera

Cat Is.

San Salvador

Rum Cay

Samana CayCrooked Is.

Long Is.

Andros

Exuma

Exuma Cays

Cuba

Cay Sal

GreatBahamaBank

NewProvidence

BPC ExplorationWell

Zarubezhneftdrilled Q1 2013

Wells drilled inCuba 2012

Anticipated welllocations for 2013

Storages

Oilfields

Oil Pipeline

Gas Pipeline

Martin MesaField Jarahueca Field

MotemboField

Central BasinFields (4)

Boca de JarucoFields (5)

Pto. Escondido YumuriFields (2)

SantaCruz

VaraderoFields (7)

Refineries

Terminals

Cayo Coco 10 563 ft (3,200m)

Cay Sal IV-1

Joides 101

Joides 100

Joides 99

Long Is. - 1

Andros - 1

GT. Isaacs

Coastal State -1

Doubloon Saxon -1

Joides 98WilliamsHistoric

Boreholes

Preparation: Current Oil and Gas Activity !!!

US Gulf Bahamas

Rock Type Sandstone &Shales

Carbonates

Rate ofSediment-ation

Rapid20,000’ < 10million years

Slow20,000’ ~ 200million years

Compaction High Low

Pore Pressure Abnormal – High Normal

Preparation: Freeport BORCO terminal

TANKER SIZES:Medium Range tanker 25,000–45,000 tonsLR1 (Large Range 1) 45,000–80,000 tonsLR2 (Large Range 2) 80,000–160,000 tonsVery Large Crude Carrier 160,000–320,000 tonsUltra Large Crude Carrier 320,000–550,000 tons

FREEPORT

11

Preparation: Incident Prevention and Risk Mitigation

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Cuba production andtranshipment

√ √ √ √√

Cuba exploration √ √ √ √ √International OilTransport

√ √ √√

√ √√

Transhipment toBORCO/SRP

√ √ √ √ √ √ √

Domestic oil transport √ √ √ √ √ √ √Oil Exploration √ √ √ √ √ √ √

Revised standards and equipment – post GoM

Source: Helix WellContainment Group

Top Hat

Capping Stack

Blow Out Preventer(BOP)

Source:ajiacomix.wordpress.com

Source: Helix WellContainment Group

Upgraded, modernised domestic regulations and standards

√

Preparation: Environmental Impact Assessment and BEST Approval

Scope:• Exploration drilling activities at Bain,

Cooper, Donaldson, and Eneas offshoreblocks

• Incorporate best practices fromNorway, the US (GoM), and the UK

• International standards and codes

Key Findings:• No sensitive environments in

immediate vicinity of first proposeddrill site

• Low/normal pressure reservoirsreduce probability of a incidents

• Identified impacts are deemednormal/acceptable

Outcome:• BPC to progress with Environmental

Management Plan (EMP) - currentlyunderway 12

BPCWell

Gulf of MexicoWell

Preparation: Potential Impacts to be Monitored and Mitigated

13

Equipment Specifications. Efficient technology

Fishing and Shipping monitoring and communications

Minimisation of noise, observers

Minimum Discharge, maceration, compliance

No hazardous discharge – retained, stored, exported

Equipment Maintenance

Compliance with regulations, standards and code

Blow-out Preventer. OSRL, Helix contracts

Oil Spill Contingency Plan

Air Emissions

Vessel Movement

Marine Mammals

Waste Streams

Fluid Usage

General Risks

Blow-out

* 2,556 individual spills lasting 60 daystracked for 90 days; no intervention

Preparation: Oil Spill Movement Simulation

14• simulated release site

Sophisticated model incorporating ocean currents, prevailing winds,seafloor (bathymetry) and oil properties

Modeled worst case scenario, very low probability event: an uncontainedMacondo-type spill *

Ocean State Bathymetry

Model Conclusion: very littleoil would reach Bahamianshorelines due to prevailingenvironmental conditions

Model results are being usedto pre-plan potential cleanupresponse activities in theunlikely event of a spill

Proactive BPC outreach toCuban authorities onemergency preparedness

21

Preparation: Environmental Management Plan

Health, Safety and EnvironmentalManagement

Environmental Sensitivity Maps

Emergency Response Plan Oil Spill Contingency Plan Waste Management Plan Health and Safety Plan

Oil Spill Contingency Plan Environmental Sensitivity Maps Response Equipment Transportation – Personnel &

Equipment Safety measures in the event of

natural disasters Clean-up mechanisms Incident Command Structure (ICS) Resource Protection Measures

Preparation: Environmental Sensitivity Index (ESI) Maps

Oil Exploration

Mitigation of Major Associated Risks

Potential Benefits of Successful Oil Exploration

Summary

18

Affordable/Sustainable: Potential Development and Returns

Projected revenue assumes1 billion bbls developed at$80/bbl oil price

BahamasGovernmentRevenue:$20 Billion

BPC Return onInvestment:$20 Billion

Exploration andDevelopment Costs: $40

Billion

Phase

~ 5 – 10+years

~ 1 year ~ 1 – 3years

~ 3 – 6 years ~ 20 – 40years

Seismic &GeologicStudies

ExploratoryDrilling

AppraisalDrilling

DevelopmentPlanning &

Construction

Developmentand

Production

BPC

$50 million $60 – 160million

$400 –600

million

$30 – 40 billion USD

Gov.

$0 $0 $0 $0 ~ $20 billionrevenue

Completed In Progress Estimated Typical CostsBased upon Exploration Success

Dividing the Pie

No financial risk,No cost to Government

Cost

Note: These numbers are basedon estimates that couldchange as the result ofexploration drilling.Does not include cost ofcapital to shareholders.

➔ Royalty payments: Long termsource of revenues

➔ Diversification of the economy

➔ Supply contracts

➔ Cheaper Fuel and Power

➔ Premium on Marine Vessels

Sustainable: Regional Oil Development and Fisheries Coexist

Gulf of Mexico: $662 million Brazil: $419.1 million Colombia: $64.4 million Cuba: $2.4 million The Bahamas: $93.8 million Trinidad and Tobago: $10 million Belize: $16.2 million Recently Barbados and Portugal

19

Annual revenue from fisheries incountries with offshore petroleumexploration and production

*2003 Worldmark Encyclopedia of Nations, Gulf ofMexico data – National Marine Fisheries Service 2007

Oil Exploration

Potential Benefits of Successful Oil Exploration

Mitigation of Major Associated Risks

Summary

21

Key Points

Exploration is still required

• Successful exploration well will notbe produced – but suspended orabandoned

Risk are manageable• Not GoM, very different conditions

• New oil & gas regulations –international best practices

• “Oil spill” modeling: “MotherNature” protecting The Bahamas

Considerable marine support activity

• Jobs creation; directly andindirectly in new or expandedindustry sector

Physical presence• Creation of Marine Protected Area

• Presence deters poachers, attractsmarine life

• Safe Haven; fast rescue facilities

22

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