Master of ceremonies at the latest UEF (UBAD Education Foundation) and KREM Radio sponsored symposium, Senator Godwin Hulse, set the tone early. We were there to find out about “wi” oil! A capacity crowd turned out at the Bishop Sylvester Memorial Center on Wednesday night to hear Dr. Gilbert Canton, the Chief Executive Officer (CEO) of Belize Natural Energy (BNE), Mr. Jim Cavanaugh, an oil expert resident in Belize since 1996, Dr. Joseph Iyo, a historian from oil rich Nigeria, and the Director of Petroleum in Belize, Mr. Andre Cho, speak on the present and future of oil in Belize.
The night was electric. At the steps attendees were greeted by a group of energetic activists, bearing placards expressing their distrust of government. But upstairs there was disappointment when Senator Hulse informed the gathering that only two of the advertised speakers, Dr. Canton, and Mr. Cavanaugh, would be presenting. Dr. Joseph Iyo (we learned later that he had been called out of the country on an urgent matter) didn’t show, and, more conspicuous, Mr. Andre Cho of the Department of Geology and Petroleum, also no-showed. Dr. Iyo is not a known petroleum expert, so the audience was not particularly put out by his absence. But the failure of Mr. Cho to show was a tremendous disappointment. Senator Hulse made no apologies for him.
The first presenter for the night was Dr. Gilbert Canton, the CEO of BNE. Dr. Canton took his audience through the process from accessing land to seismic testing to production of oil. For BNE to enter an area to do testing they have to get the permission from the owner of the property. If an owner refuses an oil explorer (BNE), the company can get the government to “step on” (our term) the owner. He noted that in the vast majority of cases landowners are happy to accommodate the oil companies as they benefit from expensive road construction and other compensatory benefits. Of 1700 parcels where they have gone to do testing thus far, less than 1% of landowners had resisted the company. They, of course, have experienced, as we would say, “the big stick.” In the question and answer segment of the presentation, Dr. Canton explained that oil is a national resource, so it is unfair for landowners to stand in the way of exploration.
It costs BNE Bz$3.4 million to explore a well, Dr. Canton explained, and Bz$4.6 million to bring a well into production. To date BNE has drilled 11 wells, of which 5 are productive (in Spanish Lookout), 4 were dry, and 2 are still in the drilling process. The Government of Belize had received over Bz$23.4 million from BNE for the year 2006, while the company had netted (after costs (include other oil exploration in the country)) Bz$9.742 million. BNE employs 388 people, 92% of whom are Belizeans working in all capacities, from truck drivers to senior management. Down the road his company will expand into a gas processing plant to produce butane, propane and electricity, and refine/blending of crude oil to produce diesel and gasoline for local sales and export. BNE, on its own initiative, Dr. Canton said, has set aside 1% of their take toward “corporate sponsorships”, sponsoring local projects to the tune of Bz$1.79 million to date.
There is compensation for landowners for use and damages caused by oil exploration. Landowners are paid a rental fee for drilling. To date the company (BNE) has paid out $289,000 to residents of Spanish Lookout for damages caused to their properties.
Mr. Jim Cavanaugh titled his presentation “Oil in Belize – benefit or curse.” Mr. Cavanaugh, a chemist/geologist with extensive experience in the oil industry, told his audience in his introduction that way back when the Arab world was threatening to take the price of oil to $30-$40 per barrel, the “presence of oil in Belize was no secret.” Still, despite all the modern technology involved in research, the “only way to find oil is to drill”, said Mr. Cavanaugh. He described BNE as a company with “unbelievable courage,” and “fortitude”, for, before their success, Belize had turned up about 50 dry wells.
Mr. Cavanaugh sounded a very serious warning. It will be an “absolutely unnecessary tragedy…(if) corruption ruins things,” he said. Belizeans must have “the guts to stand up and make sure things are done right.”
Mr. Cavanaugh also discussed the creation of oil, where it is found, how it is found; and his special beef, how GoB was trampling the rights of landowners in favor of rapacious oil companies.
BNE is just 1 of 21 companies exploring for oil in Belize, he told his audience, and look what they have produced just from the few wells in Spanish Lookout.
Belize MAY have 1 billion barrels of oil! If the oil industry is properly developed it will provide great opportunities for Belize, Mr. Cavanaugh told his audience. Oil can make Belize “achieve the highest standard of living in Central and South America.” Oil revenues should result in lowering of taxes on citizens, increased employment and improved conditions for new businesses. Belize should have low cost fuel, and better roads.
This should translate to lowered transportation costs, lowered processing and energy costs, and increased competitiveness of goods produced in Belize.
“The most shameful thing in Belize is the lack of educational opportunities for our children,” he said. Education should be free, and medical services improved. All these things can come to Belize “by just making proper use of what we have.”
But, we will realize none of these things if the industry is not “in our hands.” There must be annual audits (there is no verifiable production measuring, he claimed (Dr. Canton refuted this)); we must ban secret agreements; prosecute corruption; remove government control from the industry; make ownership in oil companies transparent (we must know “every individual that is involved” in these oil companies); and establish an “independent oil commission comprised of people (professionals, business community, churches, etc.) who have an interest in Belize, not in producing money for a selected few.”
Mr. Cavanaugh, who is employed by the citizens in Spanish Lookout to protect their interest, spoke extensively about the problems, the disrespect BNE is showing to landowners in this area. They (BNE) “refuse to pay for consent of owners to use their properties” and “they pay only damages determined by the contractor.” BNE “flares” (burns) the gas from the wells, which is a serious health hazard, outlawed all over the world (Dr. Canton refuted this). On the matter of flaring, Mr. David Penner of Spanish Lookout told us that people living near where flaring is done complain of respiratory problems, and “there is a greasy residue on the rooftops and on the water.” This has caused many folk in those areas to re-locate.
BNE has constructed a 5-mile long pipeline with a 25,000 volt electrical line on top (in the same trench). Mr. Cavanaugh described this as dangerous. And there is no leak detection on the pipeline, he said. This could lead to major degradation of the environment.
Specific to compensation of landowners, Mr. Cavanaugh said that landowners are getting a very raw deal. He thought that landowners should be getting 5% of the take, not 5% of the 7.5% that was GoB’s share. After two and a half years, Spanish Lookout got only Bz$433,000, he reported. When the Chairman of Oil in Spanish Lookout asked GoB for an “accounting,” he was told: “No!”
Mr. Cavanaugh closed his hour-long presentation advising his audience, and the thousands listening via KREM Radio, to not “let this opportunity slip by.”
Senator Godwin Hulse, commenting on Mr. Cavanaugh’s presentation, declared his position that the “mineral wealth (in the country) should be shared by all Belizeans.” He also said that Belize needs a simple formula to take the complication out of computing our take out of the oil.
A broad cross section of citizens attended the symposium, a number of whom waited in line to express their views on the critical oil issue, and to ask questions, after the presentations.