Government releases figures on oil revenues

The Ministry of Natural Resources has released its year end report on petroleum and despite a recent decline in world oil prices, the treasury is beginning to feel some impact from the four producing wells at Spanish Lookout. The figures show a total of over eight hundred eleven thousand barrels of light sweet crude pumped from the ground between December 2005 and January first of this year. Most of that was exported at prices ranging from fifty-six to eighty-three U.S. dollars per barrel. According to the report, government receives revenues from oil production in four different ways. The biggest cut comes from a seven point five percent royalty on gross production. Those payments from Belize Natural Energy are due within thirty days of the end of each quarter. For the first three quarters of 2006 royalties totalled two million, one hundred twelve thousand U.S. dollars, with the full year amount projected to reach near the three million U.S. dollar mark. Five percent of that total is earmarked for the Mennonite owners of the property. The second source of public income is the production share, which is one point five percent of net production. This payment is due annually, thirty days following the year’s end. The ministry gave no estimate of the expected inflow but it should not be very large. Income tax should be a major source of government revenue … but a lot depends on the accounting. It is payable annually at a rate of forty percent of net company revenues. This means gross sales minus all legitimate expenses. Because income tax is paid quarterly but computed on an annual basis it’s impossible to say what G.O.B.’s take will be prior to the March filing deadline. Progress payments made thus far, however, total one point four million Belize dollars. That figure should increase dramatically, depending on the tenacity of the auditors. Finally, it must be recalled that government also purchased a ten percent share in the oil field. Like the income tax, that share of B.N.E.’s dividends won’t be known for a few months. Because the cost of the purchase will be taken out of those same dividend payments, Belmopan is not likely to receive any cash for a while. According to the Ministry, the two parties have not even come to agreement yet on the precise value of that ten percent interest in the Spanish Lookout discovery, which is estimated to hold between six and ten million barrels of recoverable oil.