amandala.com.bz With Taiwan’s
crude oil production dwindling vastly over the past few decades, the country’s
top oil company, the state-run Chinese Petroleum Corporation (CPC) of the
capital city, Taipei, has come looking for oil in Belize. The company is slated
to commence the first phase of work by April.
Company officials yesterday
penned a contract with the Government of Belize for oil exploration off the
shores of the Belize and Stann Creek Districts—an area covering roughly 1,800
square miles, encompassing (as our map shows) the entire Belize City area, much
of the Turneffe Atolls, a part of Glovers Reef, as well as the waters very near
to San Pedro, Ambergris Caye in the north and Dangriga in the south.
It is one of the largest
concession areas ever granted by the Government of Belize, spanning a maximum
length of 140 kilometers and maximum width of 50 kilometers, near Dangriga.
Director of Geology and
Petroleum, Andre Cho, told our newspaper today that CPC would be undertaking
deep and shallow offshore drilling, with exploration drilling allowed until
2017, and, production drilling possibly up to 2042, if commercial scale oil
reserves are confirmed.
Cho told us that as far back
as the 1960’s there has been offshore drilling in Belize.
An international industry
source reported in June 2008 that old scientific data indicate that a total of
9 wells were drilled on the acreage assigned to CPC, and two wells recorded oil
shows while a third recorded oil and gas shows.
There have been numerous media
reports of the plans to enter a PSA with the Taiwan company over an area
spanning much of Belize’s reef system, and Cho informed that there have been no
objections from any interest group lodged with his department.
Cho told Amandala that under
the terms of the contract, known as a production sharing agreement or PSA, the
company, CPC, through its overseas arm – the OPIC Resource Corporation, has 8
years to explore for oil, and within 90 days the company is required to begin
at least the desk work and then move into collecting scientific data out at
sea. If a commercial find is declared, the company has a maximum of 25 years to
produce the petroleum for sale on the world market.
A press release issued by the
Government Press Office Wednesday announced that the PSA had been signed by
Minister of Natural Resources and Environment, Hon. Gaspar Vega, for Belize,
and by Dr. Ming-Taw Lu, OPIC’s president, and CPC’s CEO of exploration and
production business division.
As to what the Government and
people of Belize would get out of the whole deal, the government release said
that revenues collected by the Government will include royalties, share of
production earnings, income tax and a 10% working interest, but it did not give
specific numbers to indicate exactly what Government’s cut from petroleum
earnings would be.
When we asked Cho for the
details, he said that he did not have them on hand, because copies of the
60-odd page document are being bound elsewhere, but that copies of the PSA
would be available to us early next week.
Cho went on record to say that
the PSA gives Government a better percentage cut on revenues than the existing
contract with Belize Natural Energy (BNE).
When we asked Cho if there are
any other PSA’s in the pipeline, he told us that there aren’t, simply because
the entire country of Belize—land and sea—has been parceled out to companies
wanting to explore for oil here.
There are 16 other companies
licensed, including West Bay Belize Ltd., Island Oil Belize Ltd., BelGeo Ltd.,
Blue Creek Exploration Ltd., and Princess Petroleum Ltd.
To date, the only commercial
producer of petroleum in Belize is Belize Natural Energy (BNE), which declared
a commercial finding in 2005 and began full production in 2006.
According to Cho, all PSA’s
give companies up to 8 years to explore for oil, and 25 years to undertake
production and pump oil commercially out of the ground. If no oil is found
within the 8-year exploration phase, the contract “self-terminates,” meaning it
is no longer in effect.
OPIC was awarded its
exploration concession under the Musa administration way back in October 2006,
after BNE struck its commercial find.
As Amandala reported a few
months ago, CPC’s top executives and attorneys were in Belize late last year
negotiating with Government officials here.
Back in September 2008 a news
report surfaced out of Taiwan quoting Taiwan’s ambassador to Belize, Joseph
Shih, commenting on the negotiations with CPC.
“Noting that Belize is dubbed
by many members of the U.S. media as the ‘Kuwait of Central America,’ Shih
said, “relations between Belize and Taiwan are moving from more traditional
agriculture and economic relations to multi-dimensional cooperation,” the
Taiwan news report posted on “etaiwannews.com” said.
The Energy Information
Administration (EIA) of the US Department of the Energy reports that Taiwan had
only 2.38 million barrels of proven oil reserves in January 2008, and crude
production was down to 800 barrels a day—with local production of crude
declining drastically in Taiwan since 1980, when production was 5,000 barrels a
day. However, the country was said to have a very large petroleum refining
sector, and was producing roughly 10,000 barrels a day from four major fields,
apparently using crude from foreign sources.
By contrast, estimates of
reserves in the Spanish Lookout area, Belize’s only commercially producing
field, have been tagged at 11 million barrels, with production ranging from
3,000 to 5,000 barrels a day in 2008.
While CPC/OPIC has 46 blocks
assigned to it in Belize, the EIA says that the company also has exploration
and production projects in Ecuador, Indonesia, Venezuela, Australia, the USA,
Chad, and Libya.
With a population of nearly 23
million, Taiwan reportedly consumes close to a million barrels of oil a day.