March 11 (Bloomberg) -- The Bahamas government approved offshore oil exploration as the island nation seeks new revenue to help reduce its debt burden, Environment & Housing Minister Kenred Dorsett said.
Exploration will probably begin this year to gauge if the archipelago contains enough oil to be commercially viable, Dorsett said in a statement yesterday. Oil estimates from the exploration are expected to be available by late 2014 and a national referendum would be held prior to any drilling or development, he said.
“Exploration drilling is of course the only way the Bahamian people will be able to get a scientific answer to the burning question as to whether petroleum reserves even exist in commercial quantities in our waters,” Dorsett said. “The discovery of oil in The Bahamas would almost certainly prove to be economically transformative for our nation for many generations to come.”
Government debt rose to 53 percent of gross domestic product last year from 32 percent in 2007, according to a December report by Moody’s Investor Services. The largely tourism-based economy located southeast of Florida contracted at an average rate of 0.8 percent between 2007 and 2011 and unemployment remains close to 15 percent, according to Moody’s.
Messages left at the Environment Ministry by Bloomberg News weren’t immediately returned.
New regulations will be drafted to ensure best practices and environmental protection during exploration, Dorsett said.
Neighboring Cuba failed to find commercial quantities of oil at three exploratory wells drilled over the past year.
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