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Principal arrow Noticias arrow Belice arrow Taiwan to explore for oil offshore Belize
Taiwan to explore for oil offshore Belize
19.01.2009
IMG_1140_1.jpgamandala.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.

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