BNE says government’s share of oil money IS fair

Dr. Gilbert Canton

Revenues from the oil industry have been under the microscope for some time; the public outcry intensified in recent days when information not known in Belize was published across the continent in Ireland to the effect that Belize Natural Energy was making big bucks while benefits to the country are yet to be seen.  On Tuesday night, Director of Petroleum, Andre Cho, presented figures of BNE’s profits which are now under challenge. News Five sat down today with Dr. Gilbert Canton, the Chief Executive Officer at B.N.E. who says production sharing falls under a fiscal regime, which also includes royalties and income tax. That regime was created based on a study of Belize conducted by the Commonwealth Secretariat when the oil industry first started. According to Canton, the international oil industry categorizes countries from frontier to mature and based on Belize’s status, the government’s is getting more than fifty percent in revenues.

Dr.  Gilbert Canton, C.E.O., B.N.E.

“We were placed in the frontier countries, which means that you’re a country that has little or no production, that has high costs and high risks. A country like that, what it says also is that a take that is good for the government is somewhere between forty-five to fifty-five percent if it is a low profitability operation and somewhere from fifty-five to sixty-five percent if it is a high profitability operation. What we did was we looked at our 2005 to 2008 audited financials that would have been audited by several accounting firms and then we also looked at our unaudited statements for 2009 and looked at them at the end of December thirty-first 2009. If you look at it, we’re talking about a net take for government of about fifty-eight percent while the company gets forty-two percent.  And again these numbers are a little bit different from what the government provided mainly because what they reported was actual cash received in hand. But for example, we’re talking about the sales revenue of about three hundred and twenty-six million dollars and then talk about transportation and handling and other capital operating cost recovery of forty-four point five million of a hundred and forty-five point six million. Royalty is twenty-two point four million and trust fund is two point seven million. Production sharing is one point two million, government of Belize working interest is thirteen point two million and income tax is thirty-eight point four million. These are all US dollars. That brings the government take to about seventy-five point eight million dollars and the Belize Natural Energy to about fifty-five point five million dollars. Referencing back to what the Commonwealth report has said, puts into a highly profitable frontier country acceptable take for government. And I think it is important for people to recognize that in order to attract investment in the country to develop your gas and oil industry, you have to compete with other countries that have similar fiscal regimes, to attract that international dollar to come here and invest.”

We’ll have more on Canton’s interview later this week.