Belize strikes oil… but how much remains unclear
Today’s big story from the meeting of the House of Representatives in Belmopan was supposed to be new legislation that would allow the Public Utilities Commission to intervene in the B.T.L. dispute. But that prediction was made before Prime Minister Said Musa opened the meeting with some startling news.
Prime Minister Said Musa
?Currently Belize imports one hundred percent of the fossil fuels used in its service. Over the years there has been considerable activity involved in the search for oil in Belize. Several wells rendered live oil shows, but not in commercial quantities. On June third of this year, after prolonged studies and tests, including seismic data, the company Belize Natural Energy Limited and its partners, Aspect Energy and CHx LLC, started drilling in the Spanish Lookout area of the Cayo District. After drilling operations were completed, the well was secured and the planning of a testing programme took place. Testing of the well commenced on July twenty-fifth and will continue for a number of weeks. On Saturday July thirtieth, oil started to flow naturally and has been flowing at a constant rate and pressure since, producing an estimated five hundred barrels a day. According to company officials, this zone will be plugged and other zones tested in the same manner to determine if they will add to the oil producing capacity of the area. The next step will be to carry out long-term production testing for a period of several months to determine conclusively if a commercial discovery has been made.?
We’ll get back to Belmopan in a few minutes, but first its off to Kuwait–formerly known as Spanish Lookout–where News Five’s Stewart Krohn got a firsthand look at what government hopes will make you forget all about Social Security, D.F.C., INTELCO, B.T.L. and an angry judge in Miami.
Stewart Krohn, Reporting
It was the announcement that oilmen in Belize have been waiting to make since 1950…and the one to say it was an oil woman.
Sheila McCaffrey, Dir., Belize Natural Energy
?What I can tell you today is that it?s a great day for Belize. It?s a great day for our company, it?s a great day for every citizen of this country and we?re extremely privileged, quite emotional, and very proud to say that we have substantial amounts of oil flowing to the surface under tests. (clapping)
What the drillers and politicians were clapping about was that for the first time, it looks like Belize may have petroleum in commercial quantities. Tests so far show natural flows above five hundred barrels per day and the quality is that of light sweet crude–the best on the market. For those involved in the operation, including Belize’s Inspector of Petroleum, Andre Cho, the tough part was expressing optimism and caution at the same time.
Andre Cho, Inspector of Petroleum
?It looks very good, but like I said we don?t know for sure if it?s commercial until we install production testing equipment and monitor it over the next couple of months. We?ll look at the wellhead pressure, we?ll look at flow rate, and that will be able to tell us how big the field is, what is the recoverable barrels of oil, how much wells we will have to produce etcetera. So it looks good, it looks very good, but we won?t know for sure if it?s commercial until production testing has been completed.?
Stewart Krohn
?When will you know if it?s commercial??
Andre Cho
?In the next couple months, at least maybe four to six months and at that point when we are able to determine if it?s commercial, then we have to start developing the field, meaning we need to shoot 3D seismic, we need to drill more wells, and various sorts of analysis that will further help us to understand the field.?
The theme of caution was echoed by Minister of Natural Resources Johnny Briceño, who, while acknowledging that the news was good for his government, emphasised that an oil strike is a plus for all Belizeans.
Johnny Briceño, Minister of Natural Resources
?From day one I think we have been very cautious of what we inform the media. Even the Prime Minister today in his statement, he was very cautiously optimistic, stating what we are seeing so far, but reminding people that still more tests has to be done. Over the next two, three months, what the company is going to be doing is they are going to be brining in other experts that can, looking at the flow of the oil and drilling other wells. Presently they are looking at another site about half a mile from here, which within the next week or so they are going to start drilling there again. And doing that, almost like a jigsaw puzzle, putting all of that together, then we can get a fairly good estimate as to the amount of oil that they expect here.?
Stewart Krohn
?Minister, even with all the caution that is being expressed, as a politician and as a member of a government that is really, as we all know, very cash strapped, this has to be a great day for you. How do you feel politically about it??
Johnny Briceño
?I think it?s more than politically. I think it?s more important that it?s a great day for all of us in Belize. Whatever the conditions is of the government?s finances, I think what is more important is that we have found a resource that everybody suspected was here. Now after fifty years and after fifty wells that have been dug over this past fifty years, we finally struck it, as they would say, we finally have one that is showing that there is commercial quantities. Why is important for us? It is important because we can then take this resource and put it to use and to ensure that we as Belizeans, that all of us are going to benefit one way or the other.?
Stewart Krohn
The oil that has thus far come out of the ground is now stored in these green structures behind me. But when it first started coming out of the ground, it flowed into a pond and since then they have cleaned up that pond and have put the oil in these regular fifty-five gallon drums next to me. We really haven?t been able to explore what?s inside them, but what I can tell you is that the oil on top of this barrel… that?s now on my finger is one hundred percent made in Belize.
And that oil, if available in commercial quantities, will some day be sold… with at least part of the proceeds going to the owner of the land. In this case, Erwin Thiessen of Spanish Lookout. I asked him how he felt about the prospect of being rich.
Erwin Thiessen, Landowner
?Well we certainly looked at it and we?ll have to find out.?
Stewart Krohn
?This must be an exciting thing for you.?
Erwin Thiessen
?It has been an exciting thing for us over the last couple days.?
Stewart Krohn
?How much land do you have in this area?
Erwin Thiessen
?We have close to?the community has close to fifty-five thousand acres of land in this area.?
Stewart Krohn
?So what you?re telling me is if there is oil under Spanish Lookout and if the law calls for the owners of the land to get a percentage of the revenues, it will be the community that would take that money or it will be the individual land owners??
Erwin Thiessen
?We had a recent meeting about that and we decided that part of it would go to the landowner and the bigger part would go to the community that owns the land title.?
The composition of the financial split varies, with the government’s percentage rising as the quantities pumped increase. Initially the G.O.B. will collect seven point five percent of the revenues. From every dollar that government receives, the landowner will get five cents. And when might that money start to flow?
Sheila McCaffrey
?The next step is to prove what we have in the sense of being able to test this well on a long-term basis to make sure that the pressure stays up and that the production stays up. We have obviously a number of zones in the well that are of interest to us. We still haven?t tested all of those zones yet, so we have to put this in perspective, it?s extremely early days. But immediately from here, obviously the other thing is to look at further wells being drilled here in Spanish Lookout and that?s already underway, the planning of that and execution of that to be able to prove that this really does exist and it is here on a long-term basis.?
Prime Minister Said Musa
?We are very pleased; we are very encouraged by this find so far. We are very optimistic that this is only the beginning of great things for Belize.?
Reporting from Spanish Lookout, Stewart Krohn for News 5.
The well has been named Michael Usher number one in memory of the local oil industry veteran who for years urged Sheila McCaffrey and her associates to explore in Belize. Usher died in 2004.
