By NEIL HARTNELL
Tribune Business Editor
An international advocacy group has pledged to pressure Bahamas Petroleum Company's (BPC) insurers to drop the oil explorer as a client after coverage for its first exploratory well was confirmed.
The Insure Our Future group, which last week urged BPC to provide proof that its Perseverance One well was fully insured against all potential eventualities, is switching its focus to the Lloyd's of London syndicates who last week confirmed they were underwriting coverage for the company's first Bahamian exploratory well.
The group, which lobbies the global insurance industry to stop underwriting and providing coverage for activities deemed harmful to climate change, spoke out after a spokesperson for the Lloyd's insurance market validated BPC's previous statements that coverage has been placed with some of its syndicates.
Annie Roberts, Lloyd’s senior business partner for public relations and external affairs, said of BPC: “I can confirm that an insurance programme has been placed with various Lloyd’s syndicates.” And further confirmation was supplied to Tribune Business by Aon, the global insurance broker through which BPC's coverage was placed.
An Aon spokesperson, in an e-mail to this newspaper, said: "We can confirm that we placed an insurance programme, as permitted by the Bahamian government, for Bahamas Petroleum Company PLC for the risks associated with the drilling of their Perseverance One well, offshore Bahamas.
"The programme has been placed with various Lloyd’s syndicates and other approved insurers, and complies with industry standards." Neither Aon, nor Lloyds or even BPC, provided any details on the policy including the amount of coverage obtained and its extent - whether it includes all potential oil spill and pollution incidents and associated clean-up costs, including impacts to Cuba and the US.
BPC's environmental activist opponents immediately argued that the disclosures should go much further, indicating they are not satisfied with merely confirmation of insurance coverage. Casuarina McKinney-Lambert, the Bahamas Reef Environment Educational Foundation (BREEF) executive director, told Tribune Business: "We are asking some very simple questions.
"What are the limits of the insurance coverage? Who is the insurer? These should not be difficult questions to answer and it raises a red flag that we are not getting answers to these basic questions. We still need some fundamental answers regarding the terms of BPC's insurance, specifically the limits of coverage and whether there are any exclusions.
"This secrecy is deeply concerning to people in The Bahamas and neighbouring countries who could be impacted by an oil spill. It's time to see the insurance certificate. Platitudes about tourism and fisheries being 'covered' are not enough."
Mrs McKinney-Lambert, warning that "the financial impact that The Bahamas is facing is huge if there is a spill that impacts US trust resources", added: "As one of the most vulnerable countries in the world to climate change, The Bahamas has asked the world to help in responding to climate emergencies such as sea level rise and the impacts of climate-fuelled Hurricane Dorian.
"We should not be surprised that the world is watching us as we decide to encourage fossil fuel dependence through new oil exploration in direct contradiction to our own well-being or choose a more sustainable path."
BPC has frequently asserted that the terms of its Perseverance One well's insurance coverage are commercially confidential, while confirming that the Government has been provided with a copy. It has also pledged that the cover exceeds what is required by this nation's laws.
However, Lindsay Keenan, European co-ordinator for Insure Our Future, said the advocacy group will now be "campaigning strongly" to persuade the Lloyd's syndicates currently underwriting BPC to not provide coverage for future commercial or exploratory wells in Bahamian waters.
“Having previously sent mixed messages, Lloyd’s has now clarified they are insuring the BPC’s offshore oil drilling project in the Bahamas," he said. "Insure Our Future is calling on Lloyd's to review and revoke its decision to insure this project and this company.
"New oil and gas projects are completely incompatible with limiting global warming to 1.5 degrees centigrade. Lloyd's need to do better. They published their first ESG (environmental, social and governance) report in December, but clearly have a long way to go to become a truly sustainable insurance market. We will be campaigning strongly to persuade Lloyd's to drop this project.”
Simon Potter, BPC’s chief executive, previously blasted its opponents for “deliberate and gross misrepresentation” over suggestions its exploratory well lacks adequate insurance coverage.
In a statement to Tribune Business, he accused environmental activists of making “baseless” allegations that expose “a near complete lack of understanding and continued naivety” over how business in The Bahamas and internationally is conducted.
“As has previously been disclosed publicly by BPC, in accordance with its strict legal requirements the company has secured all insurances to be procured by a prudent operator for the Perseverance One well operations, and as stipulated by the Government of The Bahamas,” the BPC chief responded.
“Therefore, the statement from Our Islands, Our Future in relation to BPC’s insurance policies is baseless and entirely incorrect. As with all insurance contracts, there exists normal business confidentiality provisions, and whilst the details of BPC’s specific contracts have been provided to the Government of The Bahamas, they are otherwise subject to commercial confidentiality obligations.”
Mr Potter continued: “I would note further that Lloyd’s of London is the world’s leading insurance market, comprised of multiple risk-writing syndicates. It is not a company or similar such organisation where any one individual can attest to speak for Lloyd’s as a whole, but is rather a facilitator of insurance transactions on behalf of individual Lloyd’s syndicates.
“As such, the corporation of Lloyd’s does not have details of individual contracts underwritten by its syndicates. Thus choosing to represent an individual as speaking for the whole of the Lloyd’[s syndication market is yet another deliberate and gross misrepresentation of basic facts by Our Islands, Our Future, evidencing a near complete lack of understanding and continued naivety as to how businesses operating in The Bahamas (and internationally) actually operate.”