On November 22nd government appointed a petroleum advisory board. The 9 member advisory board comprises of 5 public and 4 private sector representatives.
Their first order of business is to review petroleum exploration contracts given out over the past years. But while the review will look at those, what about the existing one for Belize Natural Energy that gives government a 7% royalty cut? We asked the Minister of Natural Resources Johnny Briceno about it.
Hon. Johnny Briceno, Minister of Natural Resources
"The Petroleum Advisory Board is an idea we came up with in the Ministry. There's been a lot of concern from Belizeans as to what will happen if we had a petroleum industry. We feel, we are convinced, that the best way to address or to allay the concerns of Belizeans is to include everyone, to bring a broad based group of people to advise the Ministry. We wan them immediately to look at the present petroleum sharing agreement that we have signed. The idea is for them to look at it and to advise us how best we can negotiate better agreements with other people or companies that want to apply for new PSAs in this country. Secondly in the long term, its for them to look at the models that have worked in other countries and models that have not work and try to come up with a scheme or with a plan that we will ensure that Belizeans can benefit from this new industry."
Alfonso Noble,
People looking on will say what about the present arrangement you have with Belize Energy, will you all be re-negotiating that contract you have with them, where you're only getting 7% in royalties from them when in Norway and the Black Sea you're getting royalties in the region of 70%.
Hon. Johnny Briceno,
"Everything is within perspective. Let us start with the Belize Natural Energy agreement that we have. It a legally binding contract that we have. They made a bid, our department negotiated, it was recommended to the Ministry, the Ministry took it to the Cabinet and the Cabinet accepted it. We also need to understand that before this find in Spanish Lookout, we had 50 years of drilling dry wells, over 50 wells were dug so nobody was prepared to give us more. Now that we have the possibility of having a commercial find, we are in a better bargaining position to demand more from other companies.
Belize will never be a huge petroleum country. Because of the size of the field, because its smaller, obviously we will have to be, we are unable to negotiate huge royalties."
Alfonso Noble,
Did we give in too much concessionary terms to this company because of our inexperience in the production of petroleum?
Hon. Johnny Briceno,
"Its not a matter of inexperience, now that you know what you have, its like the LOTTO, after the LOTTO has played and you know the number, you would say if I used these numbers I would have won the LOTTO. It's the same thing happening here but we also understand and recognize in our Ministry that the Department of Geology and Petroleum needs more help."
While the board has been named, no Chairman has yet been selected.
