…while C.E.O. tries to defend government’s actions

We stated earlier that government has provided no credible rebuttal to the allegations by its political opposition. This morning the press office did send a short press release, however, with instructions to call Ministry of Natural Resources C.E.O. Alan Usher with any questions. And that’s exactly what News Director Stewart Krohn did. We apologise in advance for the length of the following phone interview, but Krohn felt that it would be unfair to edit the conversation and that running it in full may offer viewers some insight into what journalists often encounter when confronted with “facts” that don’t always make sense.

Alan Usher, C.E.O., Ministry of Natural Resources
“Hello, Alan Usher”

Stewart Krohn
“Alan, Stewart Krohn from Channel Five calling. How are you today?”

Alan Usher
“What’s up. You get the press release?”

Stewart Krohn
“That’s why I am calling.”

Alan Usher
“Excellent, excellent.”

Stewart Krohn
“Call Alan Usher if you have any questions and I have some questions.”

Alan Usher
“That’s right.”

Stewart Krohn
“Alan from my research it appears that before Minster Briceno left office there was a recommendation on the table regarding Z.M.T. and B.C.H. That recommendation it is alleged defers markedly from the one that was eventually signed by Minister Marin. If that is the case could you explain who that transaction took place?”

Alan Usher
“In the matter of the B.C.H. and the Z.M.T., basically we applied the existing p.s.a. that was authorized by cabinet. If you like it’s a similar one to B.N.E.”

Stewart Krohn
“Yes, but the former minister informs us was that the proposal he put to cabinet was a proposal that was much more stringent than that old n contract which was negotiate before any oil had been discovered in Belize. So how did it change?”

Alan Usher
“Well the thing is that we applied what cabinet authorized and at the time that was the cabinet authorized p.s.a.; all the values in the p.s.a.”

Stewart Krohn
“What I am trying to say Alan is that the minister is saying that is not what cabinet authorized; that cabinet had specifically received the recommendation from him on the advice of his internal experts that was a much more rigorous set of qualifications as befit a country in which oil had been discovered which was the case. Why is it that government suddenly said let’s give these guys the same sweet deal that n had before any oil was discovered? How did that happen?”

Alan Usher
“Well I suppose they must have negotiated with cabinet but at the end of day the instructions that we have was to imply the same p.s.a. as we did the B.N.E.”

Stewart Krohn
“Were you involved in those negotiations with Z.M.T. and B.C.H.?”

Alan Usher
“We are the executing ministry.”

Stewart Krohn
“Well presumably the ministry acts on the advice of its own experts that you have at the Geology Department?”

Alan Usher
“That is correct and then the cabinet is the executive.”

Stewart Krohn
“Is that what your experts recommend?”

Alan Usher
“Well the experts give a scale; there is a scale that the experts recommend by each lot. As we put in the press release each lot is weighted in terms of potential ranging from very low to high and whether those lots are deep offshore, shallow offshore or on the land and so each lot has a weight attached to it. Belize is a frontier country and by frontier country we mean a country with a newly established petroleum industry so our take should rang anywhere between forty-five percent and sixty percent.”

Stewart Krohn
“But wait Alan, let me interrupt you, are you trying to say that because these blocks, fifteen and sixteen, showed such poor potential that it would be unlikely that oil would ever be discovered there that’s why you gave them such a good deal?”

Alan Usher
“Fifteen and sixteen would be medium to high potential.”

Stewart Krohn
“Well if it’s medium to high potential and in fact they do border on n successfully block, they are right adjacent to an existing, producing oil field it would seem that those blocks would fetch a premium price but instead you gave them the exact same terms as the old n contract which was negotiated before even a drop of oil was sold from Belize.”

Alan Usher
“That is correct, but you see the whole thing with oil exploration is extremely risky and either we give good terms or the companies will go elsewhere.”

Stewart Krohn
“But Alan you already had another company, Lagoon Resources, feverishly bidding and offering very high favourable terms to government for the same blocks.”

Alan Usher
“That thing with Lagoon I think is some sort of hysteria. When I got here I found out that the Lagoon permit-they didn’t have a p.s.a., they had only a permit-their permit had expired and so those lots were issued to Z.M.T. and B.C.H.”

Stewart Krohn
“Alan there is a whole history of letters from Lagoon Resouces that not only were they interested but they had even agreed to terms very favourable to government. Something happened here and it’s not making sense to me.”

Alan Usher
“When I came here I found a very hysterical letter from a company called Lagoon and I had to find out what on earth it was about. I wrote the U.S. ambassador who have no jurisdiction in the matter and I wrote the Prime Minister, well probably I should have written him indeed, and I set about to try and only to find out that the permit had expired. So if the permit expire and then you have two companies being Belizean companies wanting p. then of course we process the application and forward their terms to cabinet and at the end of the day cabinet authorized that we use the existing p to apply to those applications. In the meantime we were consulting to a petroleum consultant and indeed with the Commonwealth Secretariat to take out some of the anomalies that exited within the old p.s.a. model and bring it up to internationally acceptable standards in light of the commercial find so a lot of things were happening at the same time.”

Stewart Krohn
“But it’s not so confusing. The former minister says that he even held up negotiations on the p because those changes were in the works and he deliberately did not sign a p.s.a. until he could get the recommendations. And his own recommendations to cabinet were that the p.s.a. for these Belizean companies be much more rigorous than the ones that were eventually signed. So something had to have happened that changed the terms from rigorous to easy for these two companies because it defies logic that two blocks immediately adjacent to Belize’s most productive oil fields would be virtually given away for exploration under terms that were more appropriate for twenty-five years ago. And the explanation given to me is not making sense.”

Alan Usher
“Under the petroleum legislation the government reserves the right to give a p.s.a. to whom they wish without giving explanation on whatever negotiations took place between the two companies in question and cabinet. That is for cabinet and to say and as the executing ministry we forwarded to cabinet the licence proposal.”

Stewart Krohn
“But Alan cabinet can only act with knowledge and advice and that’s what we have experts for. Could you tell me what experts recommend to cabinet this particular deal?”

Alan Usher
“The cabinet is the executive and the head of the executive sit in cabinet and as an executing ministry we submit our findings to cabinet and cabinet in its wisdom take those recommendations and either modify or adopt.”

Stewart Krohn
“Alan who specifically negotiated, which person negotiated with Z.M.T. and B.C.H. for these terms?”

Alan Usher
“Specifically I don’t know who. They negotiated with cabinet I suppose.”

Stewart Krohn
“You don’t negotiate with the whole cabinet Alan. Who was involved in the negotiations? Were you involved?”

Alan Usher
“Well I suppose. I’m not a member of cabinet.”

Stewart Krohn
“So you did not talk to these people? You were not involved in this process?”

Alan Usher
“We were the executing agency. We submitted the licence applications and our recommendations to cabinet and cabinet approved that we apply the existing p on these two Belizean companies. I have to point out that these companies are fully Belizean owned and here in Belize it would mean jobs, it would mean less money going abroad. The other company…”

Stewart Krohn
“Alan please save that stuff for somebody else. Direct question again, did you do any of the negotiations on this deal?”

Alan Usher
“…has about seventy or eighty in the states so all the profits the contractors pay on the oil would go abroad. In this case it would remain in Belize, hopefully, or there would be a better change of it remaining here in Belize.”

Stewart Krohn
“General Usher I’m still waiting for the answer to the direct question. Did you negotiate any part of this deal?”

Alan Usher
“I don’t know what you mean by negotiate. We received the application, the Office of Petroleum and forward our findings to cabinet and cabinet approved that we administer the existing p.s.a.”

Stewart Krohn
“Did the Office of Petroleum and Geology make a recommendation in this matter; where they brought into the negotiations?”

Alan Usher
“I don’t know, you keep saying negotiations but none of us sat around a table and traded one percent or two percent or what is that or that. We received the application…”

Stewart Krohn
“Who’s we?”

Alan Usher
“The Office of Petroleum.”

Stewart Krohn
“Did the Office of Petroleum make a recommendation on this application?”

Alan Usher
“They would indeed make a recommendation that we forward to cabinet.”

Stewart Krohn
“I’m not asking if they would indeed. Did they make a recommendation?”

Alan Usher
“Of course they made a recommendation. We can’t forward it without a recommendation.”

Stewart Krohn
“Are you telling me that the Office of Geology and Petroleum recommended this deal to be approved by cabinet?”

Alan Usher
“We made a recommendation. When I say we, they to the ministry…”

Stewart Krohn
“Wait, wait, they to the ministry?”

Alan Usher
“…and we made a recommendation and then cabinet approved that we apply the existing p.s.a.”

Stewart Krohn
“Maybe I didn’t hear you properly Alan. Are you saying that the Petroleum and Geology Department recommended this contract?”

Alan Usher
“Stewart you are asking me the same thing over and over.”

Stewart Krohn
“I have to ask you over and over because I’m not getting an answer that I can understand.”

Alan Usher
“The recommendation was made and cabinet approved that we use the existing p.s.a. Nor this and that I really don’t know how to say it. Cabinet approved that we apply the existing p.s.a. that was used with the B.N.E.”

Stewart Krohn
“Very simple question I am asking Alan, was it on the basis of a recommendation form your experts, the Geology and Petroleum Department?”

Alan Usher
“Of course we make a recommendation and cabinet approve that we administer the existing p.s.a.”

Stewart Krohn
“Does we-you use the word we-does that mean the Department of Geology and Petroleum? Simple question.”

Alan Usher
“What about the Department of Geology and Petroleum? They work for us. We noh work fi them. They work fi us. We work for cabinet.”

Stewart Krohn
“So this was your recommendation, the ministry, this was the ministry?”

Alan Usher
“Based on the recommendation of the ministry, the Ministry of Natural Resources and the Environment.”

Stewart Krohn
“Did that recommendation take into account the input of the Geology and Petroleum Department?”

Alan Usher
“We received the two applications and made our recommendation to cabinet and cabinet approve that we administer the existing p.s.a. that existed at the time and that B.N.E had.”

Stewart Krohn
“General Usher I think the way that you have not answered the question makes it very clear what the answer is but I thank you very much.”