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Sep 8, 2011

Wikileaks Cable shows BNE was fearful of nationalization

We’ve reported periodically on US diplomatic cables dumped online by Wikileaks tonight in one cable, Wikileaks exposes the perception over the investment climate in Belize. And while the ninth amendment targeted public utilities to be enshrined in the constitution, rumblings in probably the most lucrative industry had long feared the Barrow administration’s intent on nationalization. A summary of a Wikileaks correspondence between the U.S. State Department and the U.S. embassy in Belmopan touched on the fears of the oil sector. It said “A windfall profit tax on oil production is coming to Belize.  The only questions are how much of a bite it will take and how much of a disincentive it will be to U.S. investors.  While the Prime Minister and government say they are consulting and taking industry concerns into account, the U.S. firm behind the sole oil producer in the country is talking of de facto nationalization of its investment.” And why would Belize Natural Energy fear the government even before plans were made public for the B.E.L. and B.T.L. nationalizations? The release goes on to say “In addition to a financial beating, the GOB is taking a political beating after winning office in February, 2008 on a platform that included promises to reduce energy and food prices.” And most people remember the infamous dollar tax that would be placed on fuel.  The Wikileaks cable goes on to say that a Colorado firm, CHx, which is a major investor in BNE had expressed concern to the U.S. embassy over de facto nationalization of their investment, should the tax pass as initially drafted. The Embassy noted that it spoke to both governments regarding the long-term implications for investor confidence since both the tourism and energy sector rely on U.S. investors. The embassy also suggests it has gone to bat for BNE numerous times on other issues in the past. But it recognized BNE’s shortcomings and said that though it believes BNE is a good corporate citizen, at times its management had operated on the assumption that it is easier to ask forgiveness than permission, which has created a perception with some that the firm is arrogant and flouts the rules.

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4 Responses for “Wikileaks Cable shows BNE was fearful of nationalization”

  1. Charlie Price says:

    How do the Belize people benefit from the oil grilled by BNE???????

    After all it is a Natural resource……GIVEN TO US BY GOD……not a manufactured product.

  2. Charlie says:

    BNE does not go around giving money to the people in the streets of Belize but rather through charity for example the Gobie Challenge Foundation whom are getting funds to build a first ever clinic for the treatment of Cancer in children. We have to break that paradigm of wanting cash in our hands, when so much can be achieved through infrastructure. BNE personnel sign up for another program which is Energy for Life, which help children with scholarships, books, school bags, uniforms.etc. Your question should rather be HOW DO THE PEOPLE OF BELIZE BENEFIT FROM THE INCOME THE GOVERNMENT GETS FROM THE OIL DRILLED IN BELIZE????????

  3. Michael says:

    Not to mention also that BNE creates countless jobs directly and indirectly. Most of these jobs ( 95%) are being filled by 100% belizeans.

  4. Earl Grey says:

    Why can’t we have a REFINERY……………… So that we can get gas at a reasonable price????????????

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