First Belizean oil to be exported to Texas
Ever since the first significant petroleum find was made on July thirtieth of last year, Belize has been experiencing something of an oil frenzy. Never mind that the speculation has always run far ahead of the facts, beginning with the Belize Times shouting Eureka! almost before the drilling even started. But the gap between our dreams and reality is steadily shrinking. Today I headed west–to Belmopan and Spanish Lookout–to separate fact from fiction.
Janelle Chanona, Reporting
For the past nine days, tanker trucks have been transporting thousands of barrels of Belizean oil from wells in Spanish Lookout to the Big Creek port to fill a forty-five thousand barrel barge waiting in the harbour.
Jean Cornec, Geologist, Belize Natural Energy
?I think it?s pretty amazing that less than six months after discovery we are in a position to start exporting crude oil.?
Janelle Chanona
?How is the process going??
Jean Cornec
?I think it?s going very well. There are a lot of details that are being taken care of little by little, but I think everything is going okay.?
Andre Cho, Inspector of Petroleum, Geology Dept.
?We have five companies that are trucking the oil in anywhere from seventy-five hundred to nine thousand gallon capacity trucks. They are trucking the oil daily, constantly.?
?The trucks will transport the oil from Spanish Lookout to Big Creek, load the barge and the barge would go out, take the oil to Texas and then come back and we?ll be doing that constantly during production testing. At the end of which, we?ll be able to determine if the discovery has commercial potential.?
According to Inspector of Petroleum Andre Cho, the price per barrel for the Belizean oil will be determined after B.N.E.?s first shipment later this month. And that rate will have to reflect the costs of sending the petroleum by land to the southern facility and over sea to the Gulf Coast. With government locked into a seven and a half percent royalty fee, everyone in Belmopan is keeping their fingers crossed for a good deal in the U.S.
Andre Cho
?This oil is similar in quality to the west Texas intermediate crude oil, which at this time is about sixty-two U.S. per barrel, so you could more or less look at that as a starting point. But like I said, you have to factor in transportation costs and other costs, so it might be less at the end of the day.?
?We hope that it?s a reasonable price that will benefit both B.N.E. and the government because you know the government collects royalty and production sharing, so the more we collect per barrel, the more the government will collect. And therefore, the more benefits to the government and the country.?
Janelle Chanona
?While B.N.E. executives continue to negotiate for a final price arrangement in the international market, locals here in Spanish Lookout and as far away as the Stann Creek District are already finding uses for the crude oil.?
At the Farmer?s Choice gas station, they buy the oil from B.N.E. for three dollars and twenty cents a gallon delivered. Customers are then sold the crude at a price of three dollars and sixty cents a gallon. We understand some motorists are blending the oil and diesel half and half, but some larger engines, like those in large trucks and heavy equipment, are using the oil without any mixing.
Belize Natural Energy officials tell News Five today that the first well, Michael Usher Number One, is producing approximately eight hundred barrels a day while Usher Two is flowing at a rate of one thousand barrels a day. The hot rumour around Spanish Lookout was that employees working Usher Number Three, located less than a mile from Usher One, had struck oil sometime last night…but that good news was toned down this morning.
Jean Cornec
?We didn?t hit anything last night. We are still drilling and we will have the result in the next couple of days.?
Today, the gas dissolved in the crude oil at Usher One was being burnt, something B.N.E. executives say they will have to do until a use for the gas can be found. Contrary to local reports, Cho maintains that there are no immediate plans in the pipeline for establishing a refinery or production plant.
Andre Cho
?What they have been thinking about is putting in small units that they call topping units that are able to produce diesel right away, right in the field. So that?s a short term solution to begin producing fuel that can be marketed locally and probably exported as well.?
With the oil find the west, the staff of the Geology Department is swamped with work and Cho reveals that with the prospect of black gold in commercial quantities, there are already five new applications, including one from B.N.E., to both explore for oil and construct infrastructure like tank farms and pipelines.
Andre Cho
?It looks very good, it looks like it has a lot of potential to be commercial, so we are working towards that to do our best to make that happen. And like I said, there are five other companies that have exploration licences, they have done a lot of work, shot a lot of seismic, and they will drill in the near future and I also expect other good results from them as well.?
Tonight we understand that half of the forty-five thousand barrel barge has already been filled. As regards taxes on this shipment, contrary to some media reports, government will collect only its seven point five percent royalty plus business tax, currently pegged at one point seven-five percent. The nine percent sales tax, which is paid on local consumption of crude, is not charged on exports.
