BELIZE CITY, Fri. Dec. 18, 2015–US Capital representative in Belize, Alistair King, told Amandala today that the company’s US-based shareholders have still not decided whether they will continue on their mission to explore for oil in southern Belize, particularly with the price of oil dropping to US$37 a barrel.
King said that he would be waiting to hear from the investors within the next couple weeks. The company’s current contract to explore for oil in Toledo expires on January 21, 2016, but King said that seeking an extension on that contract is a possibility.
The contract—which was first issued to US Capital 15 years ago, on January 22, 2001—has already been amended twice: back in 2004 and again in 2007, for a second contract period to begin January 2008.
Under the contract, the company has 8 years to explore for oil, and those 8 years expire in 4 weeks. It would have gotten an additional 25 years to produce from the oil field had it declared a commercial find before the end of the 8-year exploration period.
The US Capital contract had been the center of a legal dispute between the Maya of southern Belize and the Sarstoon Temash Institute for Indigenous Management (SATIIM), which had been co-managing the Sarstoon Temash National Park.
King recalled that Temash #1 was drilled back in the 1970s. Temash #2, the well which US Capital drilled in 2014 to explore for oil, was located inside the national park, but the company was able to proceed after receiving environmental clearance in 2012 and a Government permit to drill inside the national park.
Tankers were readied for export in March, but exploration has proved fruitless. Although King had previously reported positive signs that oil, as well as methane and butane, were present, the first well was abandoned after the discovery of high concentrations of potentially deadly hydrogen sulfide (which has a pungent rotten egg odor) forced them to plug and abandon it.
King had told us that a second well could be drilled 15 feet away from the first, on the same drill pad, located inside the park, and the information gathered from the drilling of the first well could have helped to make drilling of the second well more effective. However, since the equipment imported from Mexico was shipped back in April, things have been at a standstill on the ground.
King had previously told us that the company had spent roughly US$22 million on the abandoned well and a total of US$40 million so far on oil exploration activities in Belize, including preliminary work such as seismic testing in southern Belize.
Its original contract covered almost 800,000 acres, covering most of Toledo and extending all the way to the Sarstoon River. Its remaining exploration area is substantially smaller, but still includes locations such as the indigenous communities of Barranco, Graham Creek, Machakil Ha and Dolores, as well as the Payne’s Creek National Park and the Sarstoon Temash National Park and extends still to the Sarstoon.