Former minister says cabinet altered oil deal…
When an opposition political party calls a press conference and starts talking about scandal in government, the reaction of a seasoned journalist is one of healthy scepticism. But guess what … since the accusations made yesterday by U.D.P. Leader Dean Barrow of high level official favouritism in the awarding of oil exploration contracts, the government has presented not a single credible argument that its actions were anything but irregular, illogical, unfair, and ultimately highly prejudicial to the national interest. The only question, it seems, is exactly where to pinpoint the blame. The basic situation is that on July twenty-fourth the government of Belize signed production sharing agreements with two local applicants—Z.M.T .International and B.C.H .International—and offered them a deal on that was extraordinarily more favourable than those granted to other recent applicants; a deal that—if oil was discovered—would have left the treasury short changed by tens, if not hundreds of millions of dollars.
Today, speaking by phone to News Five’s Stewart Krohn, former Minister of Natural Resources John Briceno said that the recommendations he sent to Cabinet prior to his resignation on June fourth—based on the advice of his departmental advisors—was for a deal far more favourable to government. What happened after he left, he cannot answer for.
John Briceno, Fmr. Minister of Natural Resources
“On May thirty-first of this year while that was being decided out ministry sent a cabinet paper to the cabinet making certain recommendations and one of the local companies we recommended them to be awarded a p.s.a. Unfortunately I was not at the cabinet on June the fourth when that discussion took place.”
Stewart Krohn
“What were the details then of that cabinet paper? Were they the same liberal concessions that they eventually got or was it substantially different from that?”
John Briceno
“First of all I need to tell you that once I am a cabinet minister I have signed an agreement of confidentiality so I cannot discus what happens in cabinet but I can tell you that I did not make those recommendations. We were following the petroleum negotiations strategy that was approved by the petroleum advisory board approved by the cabinet whereby we look at different blocks and depending on the geology we tend to estimate the likelihood of finding oil in these areas. And we were following that strategy and certainly the terms were not as favourably as this one that was signed in July of this year.”
Stewart Krohn
“How is it then that your recommendation that went to cabinet which you say reflects the realities of having oil been discovered in Belize, how would it be that this would get changed around?”
John Briceno
“I think you would need to ask other people Stewart. I am no longer in the cabinet. I know the recommendations that we made to the cabinet just before I left but whatever happened after that I think I would be unable to really to answer you.”
Briceno went on to explain how the system is supposed to work.
John Briceno
“The process has been a very open and transparent process that we were following. A company comes in, they meet with the department, the department would bring them to my office, they do a courtesy visit and then they go back and do all of their negotiations. And I would challenge any company to say different. All the negotiations take place with the technical people. The technical people then come to the ministry, to the C.E.O. and to myself and they would then inform us whether company a, b and c-because it’s an open bidding-and these are the bids that these companies made and based on this we are recommending that it would be company a, b or c for theses reasons and once they do that then the cabinet paper is prepared. We take it to cabinet with the recommendations from the department then the cabinet would then-I as the minister during my time I would of course have to defend my decisions-in most instances the cabinet would accept it or they could reject it or in some instances they have made some recommendations to make some changes to the recommendation that we would take. So it is a very open process, in every instance it’s been a very open process.”
Stewart Krohn
“In the case of your recommendations regarding Z.M.T and B.C.H. are you aware whether or not cabinet accepted your recommendations? I know you weren’t at that meeting but you would know whether they accepted the recommendations, wouldn’t you?”
John Briceno
“B.C.H., our recommendations…that paper went to cabinet in July of 2006 and that was accepted, I mean we made a press release at that time that they were accepted. The reason why we did not sign a p.s.a. was because we were working with the Commonwealth Secretariat on coming up with a new version of the production sharing agreements because these production sharing agreements were written in the mid-eighties and since then there have been certain changes that we needed to address such as issues of the environment, issues of decommissioning an oil field-those are silent in the previous agreement, the social issues and we wanted to find a way how we could address those issues in the new p.s.a.’s and that is why when the cabinet approved that in July of 2006 we did not sign a p.s.a because we were telling them we want to get the new model p.s.a. and then use that then for them to sign these agreement.”
Stewart Krohn
“So presumably the new p.s.a. that would have been signed in light of the B.N.E discovered would have been markedly less favourably to the oil company and more favourable to the government given that B.N.E. had proved that there was oil in Belize?”
John Briceno
“Well since the day that B.N.E found oil negotiations changed and we were in a stronger position to be able to demand some more.”
Stewart Krohn
“There is a company called Lagoon Resources Ltd. that is claiming that it offered-and this is back in your administration-that it offered much, much better deal that anybody else offered in terms of a production sharing agreement and they are complaining, among other things, that they were passed over due to favouritism towards Z.M.T. and B.C.H.”
John Briceno
“Well basically the B.C.H. has nothing to do with the Lagoon Resources. They are talking about Z.M.T. and the records would clearly reflect that Z.M.T. made a better offer than the offer that was done by Lagoon Resources and the record is going to that and I have no problem in sang that because I am sure that the records at the ministry would be able to prove what I am saying. The Belizean group did make a better offer then Lagoon Resources. The p.s.a that was signed, well now, that is another matter which I have nothing to do with.”
The principals of Z.M.T. and B.C.H. are Zaid Flores, Mike Dunker, and Tony Zabaneh. The current Minister of Natural Resources is Florencio Marin.
