Amandala has confirmed that CHx Belize LP and its partner, West Bay Belize Limited, are challenging the Government of Belize over a recent decision not to renew the concession granted to them for petroleum exploration in the Orange Walk District.
Their concession covers a part of Orange Walk, including the villages of Indian Creek, Indian Church, San Felipe, August Pine Ridge, and San Carlos; and the New Lagoon area.
The dispute surrounds a well dug last year at Yalbac, where the first oil well was dug in 1956 with evidence of oil show. The new well was drilled to 550 feet, using a rig belonging to the Belize Water Services Limited, which Government says did not meet exploration requirements.
Companies are given eight years to explore for oil in their concession. Their contracts are reviewed every two years, at which time the government decides whether the parties should continue exploration up to the maximum eight years.
The Minister of Natural Resources, Hon. Gaspar Vega (representative of Orange Walk North), has decided not to renew the company’s production sharing agreement, which would have gone into its 7th year.
Government sources say that the Minister has taken the position that the venture did not meet the requirements for getting the contract renewed.
Kevin Herrera, chief executive officer of CHx, and former general manager of the Belize Chamber of Commerce and Industry, told Amandala, however, that to the contrary, they had met the minimum requirement for exploration.
Herrera declined to get into details, but informed that they had written the Government expressing their intent to have the dispute heard by arbitration if an amicable solution is not reached via negotiations.
According to Herrera, the Production Sharing Agreement (PSA) gives options for how arbitration is to proceed, but they have not discussed that with GOB yet because they are still hoping for fruitful dialogue with GOB.
CHx, a subsidiary of Aspect Energy, LLC, of the US, (which also has a company in Guatemala – CHx Guatemala Limitada), partners with two other petroleum companies in Belize – Belize Natural Energy (with a contract for the Belize and Cayo Districts) and US Capital (with a contract in Toledo.)
Apart from its joint venture partnership with BNE, in which the parties share profits, 40% for CHx and 60% for BNE, CHx also partners with West Bay in the North and US Capital in the South.
CHx is chaired by Alex Cranberg, who at the time of the partnership with BNE, was also the husband of BNE chair, Susan Morrice.