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Jun 28, 2007

Controversy calmed, oil exports produce growing revenues

Story PictureWith the controversy over taxation and environmental concerns largely resolved, Belize’s fledgling petroleum industry has been absent from the headlines. But while the rhetoric has cooled, the wells, pumps, and tanker trucks have been running steadily … to the point where crude oil just may be the nation’s largest single export. News Five’s Janelle Chanona reports from Spanish Lookout and Big Creek.

Janelle Chanona, Reporting
“According to the experts, there is approximately seven million barrels of light crude oil buried beneath the ground here in Spanish Lookout. After five successful drills, today Belize Natural Energy is extracting three thousand two hundred barrels, that’s about one hundred and thirty thousand U.S. gallons of oil, every day.”

Since February, pump jacks have replaced the tanks and flaring posts that originally marked the Michael Usher wells in Spanish Lookout. As the oil is pumped to the surface, it is redirected and pushed through five miles of pipelines to B.N.E.’s Central Gathering Facility in Iguana Creek.

Through a single main pipe, the petroleum is then sent to the oil, gas, and water separator, where the three products are sent into different coloured pipes.

Daniel Gutierez, Marketing Manager, B.N.E.
“The oil is separated from water and gas. The oil is stored, the water is pumped back down to the earth where it came from and the gas is flared as you can see, over there.”

Flaring has been a source of controversy, as people living in the vicinity of the wells blamed headaches and other symptoms on the fumes. According to B.N.E.’s Marketing Manager Daniel Gutierez, the burning is necessary, but having only one station outside the community should substantially lessen concerns.

Daniel Gutierez
“What is in there is not unlike the gas for example that you use in your stoves at home. So it’s nothing—people need to understand that it’s something that can be used, it’s something that is done, and it’s done for good reason.”

“Obviously, as time goes by we will try to find systems to make better use of the gas and we’re not exactly sure how that’s going to all pan out. We are exploring some kind of a turbine system, but that’s not written in stone. We are just walking down that path, it’s going to be a few months before we know exactly how successful we will be with that effort.”

Allen Reimer, Spokesman, Spanish Lookout Community
“The flaring is over and the tanks have been removed, everything has more or less settled down, it’s a lot more like we’ve got the most part of our community back again.”

The reality of having an oil industry in the Spanish Lookout community has hit residents hard. But according to spokesman Allen Reimer, the recent changes in the scenery have brought a sense of relief.

Allen Reimer
“There’s the tail end of it still, but the health issues, the health complaints, they are definitely a lot less. The anxiety has decreased, although not fully receded because people still think what will long term effects be but no, the day to day health complaints they are basically over. There are very, very little health complaints now.”

Janelle Chanona
“By tail end, what do you mean?”

Allen Reimer
“Well there is this concern of what long term will be and there’s some clean up to be done around the wells and some of the feelings will take time to heal.”

“I think that’s life in an evolving oil industry. Experience has been a good master and we’ve learnt a lot, although not always pleasant but that’s growing up, growing up isn’t always pleasant.”

While the gas is burnt off and the water injected back into the ground, the precious petroleum is stored in several large tanks … but not for long.

Janelle Chanona
“Everyday, seventeen tanker trucks arrive at Iguana Creek to be filled with two hundred barrels of light crude oil, that’s about eight thousand, three hundred gallons.”

But before the trucks are filled, they undergo a series of safety inspections to make sure the vehicles are road worthy and their tanks secure.

Janelle Chanona
“Tell me about those seals on the top, a lot of people might be wondering about … why seals.”

Victor Quiroz, Safety Inspector
“Why seals, it’s just to make sure that all the product gets down there, what’s in there, gets down to the site, to the port. What else could I say, just more as a safety so that whatever the driver signs for on the invoice, on the SIV, I don’t know what you call it. When it reach down there they will check it, okay you have two hundred barrels, let’s check it and we’ll go to it, check the washer, measure it or whatsoever and then they’ll say it’s alright.”

Janelle Chanona
“Has anyone tried to open a seal and take out some of the oil?”

Victor Quiroz
“Not on our watch I guess.”

Once the trucks are cleared, approximately eighty percent of the tanks are filled with oil.

Daniel Gutierez
“When you load it from the bottom, what the trucks really need is to have sensors, we need to have sensors on our end and the providers need to have sensors in the tankers so that when it gets to a certain level then that automatically trips. Currently we have guys on the top of the trucks and they are loading up to a washer, as it’s called in the business, and it’s done visually.”

With its load in tow, the trucks then embark on the one hundred and twenty-one mile journey from Iguana Creek to the Big Creek Port, travelling via the Western, Hummingbird and Southern Highways.

At the Port of Big Creek, the oil is pumped out of the trucks and into another set of storage tanks. It takes about two weeks to fill the tanks to their combined forty-two thousand barrel capacity. B.N.E. initially sold Belizean crude to U.S. Gulf Coast processing plants, but more recently the company has signed a contract with a regional refinery in Panama. It takes the oil laden barge about four days to travel across the Southern Caribbean Sea.

While it is not certain exactly how much money the oil makes abroad, the company does admit being “profitable”. But we can tell you how much has made it into Government’s consolidated revenue fund.

According to officials in the Ministry of Natural Resources, B.N.E. has paid Belmopan just over eighteen million dollars in royalties and income tax for 2006. While royalties for the first quarter of 2007, approximately one and a half million dollars, has been deposited, the income tax payment for the same period is pending.

The cash to be collected under the terms of the Product Sharing Agreement and Government’s Working Interest also remains outstanding as an independent audit of B.N.E.’s accounts is currently underway to confirm the company’s production figures.

As for the Mennonites, their spokesperson says negotiations for the landowners’ financial compensation have yet to be concluded.

Allen Reimer
“The Government has a proposal of how they want to settle it, but Spanish Lookout is not—and in talking to other land owners around us—they are not ready just to take it off the board and accept it. They will need a little more explanation on where numbers come from, why so, so it’s going to need a little more time.”

And while those talks continue in the corridors of power, on the ground Belize Natural Energy and their seismic subcontractors are busy exploring other sites within the company’s license block in the Cayo District. A sixth well in San Marcos and another in Mount Hope both proved disappointing, but Gutierez remains optimistic and determined to tap into another reservoir.

Daniel Gutierez
“It is in our best interest and everyone’s best interest for more oil to be found so that economies of scale can be brought to the operations and it can be made more streamlined in the long run for everybody.”

Reporting for News Five, I am Janelle Chanona.

Viewers may have noticed a discrepancy in some of the figures used over the past several years regarding the size of the Spanish Lookout field. Officials at B.N.E. have told us that while there may be as much as twenty million barrels of oil in the field, they believe that only seven million are actually recoverable. When we checked with the Geology and Petroleum Department they told us that their estimate is eleven million barrels.

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Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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