What is the future of oil in Belize and who will benefit? Since July of last year when oil was discovered in the Spanish Lookout area, those two questions have been the most widely asked and generally speculated upon. And for both the truth is there are no ready answers because it's still too early to tell. But there is useful information about the current exploration and production at Spanish Lookout, and today we went west to get some on-the-ground answers.
As we've reported, Belize Natural Energy has four oil wells in the Spanish Lookout area; three are producing, and the last one has just completed drilling. The wells are all named after Belize Natural Energy's local partner, the now deceased Mike Usher. So how much are wells one through three producing and what's in store for number four? Here are the answers.
Jules Vasquez Reporting,
This was Mike Usher number one when we first visited it on the third August, 2005 and this is it today. At that time, oil had just been found and it was still in the testing phase. But since December it has been in production phase, and since January, Mike Usher #1 has been trucking out a thousand barrels a day.
Sheila McCaffrey, Belize Natural Energy
"The production here is averaging about 1,000 barrels of oil per day. That oil comes out of the ground naturally, as you see from the type of infrastructure that is on the ground. It goes through a separation unit and when it's separated, it separates the natural gas from any potential water that may be in the oil and then into the crude oil. The natural gas, as you can see, is burnt off and the crude oil then comes through a pipeline system underneath the ground here and then into the tanks behind me. We have capacity on site for 2,000 barrels per day in the tanks that you see behind us, each tank holding 500 barrels so we have about enough for 48 hours of production on the site."
The light sweet crude is stored in these four 500 barrel tanks and every hour Clarence Dawson checks it to make sure that the pressure and the levels are satisfactory. The same thing happens here at Mike Usher #2, and at Mike Usher #3, which is visible from our perch atop Mike Usher #1. Usher #1 and Usher #2 are prolific producers, the oil comes out of the ground and goes into the storage tanks without any mechanical intervention - that means it's all pushed by the pressure of natural gas beneath the earth. McCaffrey says they are very special wells.
Sheila McCaffrey,
"To find a well such as this anywhere in the world is rather spectacular; a well that produces high quality oil that can be used practically directly from the well and it is being used currently here in Belize in many different facets. So the quantity and quality of oil that is under this well makes it a very very special well."
And now Belize Natural Energy and its partners are hoping for the same with Mike Usher #4 which was drilled at a new area in Spanish Lookout. Drilling went to a depth of 3,400 feet and has been completed. After that the testing phase begins. Rig manager Robert Craig says he ahs a special feeling about this one.
Robert Craig, Rig Manager
"At the moment we've completed the drilling phase of the well and we're now doing the testing and analyzing of the structures that we've drilled through and at the moment we're at the early stages of it, its looking quite promising, some good results there, but the scientists and engineers still have to figure out what's there and what's worth pursuing so let's wait and see."
And if number four works out as well as one and two have, Belize Natural Energy will be able to ship out at least one thousand barrels more a day. That's a total of 3,500 from the four wells - and more than a field
Jules Vasquez,
There's a lot of speculation that you all are going to become vastly wealthy off of a Belizean natural resource. If we have proven 6.74, you multiply that into BZ$100/barrel which is $670 million and that proven is hardly what is predicted. How do you respond to that?
Sheila McCaffrey,
"I go back to say that the people that are here are very committed to make this project work in Belize. We've been working extremely hard, as you know, you've been tracking us for many months what we're doing. People talk about vast wealth but there is vast risk first of all involved in this and many Belizeans, including a lot of the people that question everyday what is going on, were given the opportunity to invest in this at the very beginning. They chose not to because the risks were too high and remember 50 multi-nationals did fail in front of us
I would say to anybody who are asking what about these huge profits, there is lots and lots of land in Belize available for risk dollars, there's a lot of potential for everybody to go out there and risk their dollars. There's lots of land available currently from the government. You can apply, the same as anyone else, put your consortium together and you go out there and drill and spend your dollars and you risk it the same as we did. Anyone Belizean is free to do that if they wish. I don't see any cue forming up to do that because unfortunately fifty multinationals failed spectacularly in front of us and just because we have been successful doesn't mean that the next person who comes behind us is going to be successful."
And while the Mike Usher Wells one through three each have storage of two thousand barrels, the storage facility at the Big Creek Port has a capacity of forty thousand barrels. It's is preparing another shipment of that in the next week. Tomorrow, we'll have more on the oil in Spanish Lookout as we look at the economics and the battle over how much the company will get and how much government will get.
