"Various formulae" - that's what you just heard the PM say were included in the Cabinet paper John Briceno submitted on June fifth. Well, through our sources, 7NEWS has obtained that Cabinet paper and we look more closely at it.
Jules Vasquez Reporting,
This is the Cabinet paper - number 34 of 2007 and for ZMT Inc. there's only one formula proposed. And it states that, 'for 0 to 5,000 barrels - the production share is 20%; for 5,000 to 10,000 government production share is 25%; for 10,000 to 20,000, government's production share is 30%; for 20,000 to 30,000 barrels its 35%; and 40% for more than 30,000 barrels.
As for BCH - the proposed terms for that are in another Cabinet paper, this one number 62 of 2006 and similarly it recommends 20% for 0 to 5,000 barrels; 25% for 5,000 to 10,000 barrels, 30% for 10,000 to 20,000 barrels; and 35% for 20,000 to 30,000 barrels.
The Cabinet paper states explicitly, "these fiscal terms fit in the exploration strategy of Belize that was formulated and is being utilized to ensure that the government receives a state take in the higher end of the international benchmark of 45%-60% for frontier countries like Belize." Breaking that down, it simply means that the petroleum strategy says that the government must try and get a greater take than it did with Belize Natural Energy.
The 2006 Cabinet paper says, "the rates being offered by BCH fits within the exploration strategy." But that advice was ignored in what the Prime Minister says was "its wisdom" Cabinet instead chose this: the final production sharing agreement, which starts at just 1.5% and ends at just 15%. So vast is the difference between what was recommended and what was agreed to, that they can hardly be compared.
The maximum percentage of 15% on the final PSA, does not even match the minimum percentage of what was recommended to Cabinet. How Cabinet started with one and ended with the other is a question that the Prime Minister blew off today.
Rt. Hon. Said Musa,
"I am telling you what the Cabinet decided."
A Cabinet decision to award generous production sharing agreements to two blocks that are listed in the Cabinet paper as high potential - the only two blocks so described.
According to the Prime Minister, those same high potential blocks provide no certainty of oil discovery and the Cabinet paper urges government to, "negotiate for maximum rates in range." Still, beyond the Prime Minister's considered judgement on seismic matters, the national petroleum strategy stipulates far higher production sharing rates for high potential blocks.
