May 8 Bahamas Petroleum Company's
shares climbed 40 percent after Prime Minister Hubert Ingraham,
who said last month he would not approve any drilling for oil if
re-elected, conceded defeat in Bahamas' general election.
Prime Minister-elect Perry Christie has close ties with
Bahamas Petroleum, Ingraham had earlier alleged. But Christie
denied any links to the company.
"This is hugely positive," Gerry Donnelly of FirstEnergy
Capital said. "This removes a lot of the uncertainties going
forward to help Bahamas Petroleum get on with its work programme
and bring in a partner to be able to drill."
The company's drilling permits expired last month. But it
maintains it has fulfilled its required commitments and its
permits have been renewed till 2015. The government, however,
Bahamas Petroleum holds five licenses to explore for oil in
the country, whose waters likely hold 1 billion barrels of oil
reserves, according to analysts.
Ingraham initially said he would not allow any drilling for
oil if re-elected. But he later said it could be authorized once
appropriate regulatory procedures were in place.
Bahamas Petroleum's shares have lost about a fifth of their
value over the last month - after media reports raised fears the
company's permits may not be renewed - and has seen volatile
"It was put in the middle of a political process it didn't
want to be a part of... and I think it stood apart from the
process," said Donnelly, who has a speculative buy on Bahamas
The company's shares were up 20 percent at 9.88 pence at
0803 GMT on Tuesday on the London Stock Exchange.
(Reporting by Brenton Cordeiro in Bangalore; Editing by Joyjeet