The oil is gushing at Spanish Lookout, and the money is trickling in to government's coffers. Belize National Energy, the foreign-owned, locally-registered company that runs the oil operation in Spanish Lookout today paid government its first royalty cheque and it's not a kings ransom, but it is something.
Under the production sharing agreement, government gets 7% and National Energy keeps 93% of gross revenues. Today that translated into $15,000 for government based on sales of $200,000. Who bought the oil? We are informed that it was taken up by local industry such as Cuello's and the Belize Citrus Company who use "bunker c grade fuel."
Following the formula in the production sharing agreement, National Energy also paid the landowner 5% of government's 7%, which is $750. And showing itself as a good corporate citizen, National Energy also paid government revenues: 9% sales tax on the $200,000 sales, which is $18,000, and, 1.75% business tax amounting to $3,500. That figure, as we understand it, is still in dispute because there is no business tax classification for petroleum companies.
And while government got a total of just under $36,000 in revenues and royalties, the big news tonight is that a second oil well in the area is producing at an impressive rate. A release from National Energy says that the new well, called 'Mike Usher #2' is producing 500 barrels a day, the same as the original, 'Mike Usher #1.' And while that's the official number, we are independently informed that each is producing at a rate of over $1,000 barrels a day. And beside all that, plans are underway to drill well #3. National Energy's release quotes experts who say that "there is a vast potential of oil yet to be discovered in this country." And because of that, National Energy will do its first 3-d survey of Spanish Lookout, which should determine how vast the oil resources actually are. The release also announces that international oil sales will begin in early December.
