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Jun 14, 2013

But Maranco’s Production Sharing Agreement is favorable to G.O.B.

Tanya Williams

The report was generated using cost data from BNE’s Spanish Lookout oil field, the existing terms of Maranco’s production sharing agreement, as well as corporate tax.  The Production Sharing Agreement, Williams says, is favorable to the government.

 

Tanya Williams, Exec. Dir., Belize Coalition to Save Our Natural Heritage

“We had to use some assumption because we don’t know, the government does not know and neither does Maranco know what is the size of the oil field, expenses etc… So there are assumptions that you have to use to come up with an economic profile.  BNE is the only company that has found oil in Belize so far, of production quantity, to produce oil in Belize so far.  We have the Spanish Lookout field and we have the Never Delay field but Never Delay is pretty small so what we did was use the larger of the two which is Spanish Lookout.  So for that we used the size of the field, we also looked at costs, like the development cost.  A third assumption that we used was looking at what is the cost of oil on the world market, not only for this year but we already know what oil is selling at for 2015, so that is what we used as well.  Very importantly to point out is that this is… really we must commend government on this particular production sharing agreement.  It’s very different from others that we’ve seen before.  The others had a hundred percent cost recovery, so, for example if I was one of those concession owners, under my PSA I could pay all my costs, my production costs, my operational costs, my capital costs before government started getting any money other than royalty.  Under this particular PSA it’s only sixty-five percent so it’s pretty good.”

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