Could a sensitive block of southern Belizean territory and the much-eyed Sapodilla Cayes, claimed by Guatemala, be in the hands of Guatemalan operatives or be at risk of falling under Guatemalan control via a petroleum exploration concessions granted for offshore Belize? That is the question that Belizeans were made to ponder this week as attorney Audrey Matura-Shepherd, vice president of Oceana in Belize, disclosed at a public forum that Island Oil—a subsidiary of a Guatemalan company—has petroleum exploration rights for offshore Toledo.
“Petdegua gets where? Right here. That is our Sapodilla range. That is our disputed territory right here with Guatemala,” she pointed out, adding later that, “our territorial waters has been put into the hand of a Guatemalan company. That compromises our sovereignty.”
Even though some persons who were party to the Island Oil agreement claim she is making much ado about nothing, Matura insists that even if the owners of the company are Americans, it does not matter because the company itself is a Guatemalan company, which can, under certain conditions, such as the break-out of war, be taken over by the Guatemalan government, along with any petroleum rights in Belize.
Speaking at the Oil Forum on Tuesday held by the Belize Coalition to Save Our National Heritage, Matura-Shepherd continued: “Now I want you all to know that petroleum rights trump 100% land rights. In law, the general principle is that you own the land and everything below it and everything above it. But if there are minerals below it, it belongs to the government. …That is the common-law system we inherited but that can be changed by law.”
There could be a wealth of petroleum resources at stake. A Business News America article dated February 9, 2001, claiming that Petdegua was seeking technical and financial partners, quoted reserves of petroleum at an estimated at 553.7 million to 3.32 billion barrels of crude, without citing the exact source of that information.
The concerns arise as the coalition is calling on the Government of Belize to ban petroleum exploration in offshore Belize, protected areas, and other sensitive habitats. Prime Minister Dean Barrow, who claims that Belizeans won’t have to worry about offshore drilling for a few years, told reporters Wednesday that if the company happens indeed to be majority-owned by Guatemalan citizens, “there is no connection between that and territorial integrity.”
A press release from The Belize Coalition to Save Our National Heritage is calling on the Government of Belize to revoke the Island Oil concession, claiming that it is both illegal and unconstitutional, because it violates the provision of the Belizean Constitution that declares that all disputes with Guatemala over this disputed area must be settled through a referendum and not privately through a private contract.
“From the Rio Hondo to the Sarstoon River… your entire country is parceled out there – except the Maya Mountains because I guess they can’t drill through the mountains,” commented Matura-Shepherd, outlining the possible implications for ordinary Belizeans.
“If you could use your imagination, pick your house on that entire map,” she said. “Your land is there. Your land has been given away to a second owner. You don’t have that full right over your private land. And that is why it is important for us to be clear whether or not we want our entire lands to be parceled out for drilling be it onshore or offshore.”
If a landowner is really stubborn about not letting an oil company come on their land, the government can acquire his or her land by force and then pay a monetary compensation to the landowner, she furthermore explained.
The alliances between Belizean and Guatemalan petroleum interests are clear, and have not just existed with Island Oil. For example, Belize Natural Energy’s (BNE) joint venture partner for the past four to five years, CHx, has also had operations in Guatemala. US Capital, the company allied with Island Oil, also has interests in Guatemala. So does Perenco Belize Limited, whose point-man operates out of Guatemala.
Just who is Island Oil?
Island Oil was registered in Belize in 2000 as a subsidiary of a Guatemalan company, Petdegua.
Briceño told Amandala Wednesday that the story goes way back to 1998, when he claims former United Democratic Party minister responsible for Natural Resources, Joe Cayetano, issued a concession to AB Energy Limited.
In 2001, said Briceño, the parties decided to split into US Capital and Island Oil. The negotiators were two Americans, said Briceño: Jerry Kiser, who had Island Oil; and Brian Richter, who took on US Capital. No state oil company was involved, Briceño claimed. In 2003, claims Briceño, Kiser sold his interest to Steve Reilly. Briceño told us that Reilly, of Island Oil, had already been operating in Guatemala. (Perenco, Petrolera del Atlantico, and Island Oil, US Capital were listed among companies that have or have had interests and operations in Guatemala.)
In 2005, Briceño went on, Island Oil asked for other acreage, and that is when they got the supplemental right next to an existing block.
The split of AB Energy took place around the same time that Belize and Guatemala resumed talks at the Organization of American States over the territorial differendum. The amending agreement for Island Oil was signed the year Belize and Guatemala entered into a framework agreement for negotiations and confidence building measures.
We called to speak personally with Steve Reilly, listed as the president of Island Oil, in San Francisco, California Thursday; however, his wife, a woman with a heavy Hispanic accent, said he was not available.
Alistair King, the local contact for both Island Oil and US Capital, would not take our call when we phoned his office. He sent a message back to us saying that he is awaiting advice from his lawyers before he speaks.
The Companies Registry records indicate that over four years after the signing of the Production Sharing Agreement and its amendment, the company ownership information on file remained unchanged. The Guatemalan company, Petdegua, was still listed as 99.9% supermajority owner of Island Oil in Belize.
Director of Petroleum and Geology, Andre Cho, told Amandala that Petdegua was registered in Guatemala by American shareholder because he was working in that country before he invested in Belize.
Brian Richter and Jerry Kiser had a license in Guatemala and decided to come to Belize and applied for a license through AB Energy Limited for both onshore and offshore Toledo in 1998. They relinquished their old license in Belize after the split and applied for separate licenses, said Cho. “Kiser applied under Island Oil,” adding that his parent company is in Guatemala.
Cho claims that Petdegua is not a party to the new agreement, though the Registry documents still show that Island Oil is owned by Jerry Kiser’s Guatemalan company.
Cho told us Island Oil had some years ago drilled a shallow core well (for data) near the Monkey River area. Apart from that, nothing has happened offshore since 1997, Cho told Amandala. US Capital has not done any work yet, he added.
(We note that US Capital has published that it has a petroleum concession in Guatemala.)
Gapi signed extension with Perenco’s Guat-based manager
Furthermore, Deputy Prime Minister and Minister of Natural Resources, Gaspar Vega, signed the Perenco agreement extension with Geoffrey Martin-Denavit, director-general of Perenco-Guatemala, in November 2009, amending Block A, which covers Orange Walk, Sarteneja and the Crooked Tree Wildlife Sanctuary. The amendment to the production sharing agreement resulted in more acreage: adding 768 square kilometers, equivalent to roughly 190,000 acres or about 300 square miles. The size of the concession areas are: Block A: 992,869 acres; Block B: 289,113 acres, the latter of which covers Gales Point Village, going eastward several miles into the Caribbean Sea.
Perenco Belize Limited has as its directors four men, including president Roland Fox of Paris and manager for the Latin American group, Rodrigo Marquez, along with two representatives of the Bahamas-based Guaranty Trust Bank Limited. The parent company, Perenco S.A., reportedly operates off the island of Bahamas.
Perenco Belize’s parent is an Anglo-French company operating in 16 countries in Europe, Africa, Latin America and the Middle East. Only this year, Guatemala gave Perenco Guatemala a 15-year renewal. The company indicates that it wants to shoot 3-D seismic in Belize this year, 2010, but did not indicate whether that would be onshore or offshore.
Of note is that Perenco is suing the Government of Ecuador at international arbitration after Ecuador’s government seized US$327 million worth of assets in 2009, primarily petroleum, after the company and the government disputed over windfall taxes. In 2006, the government passed a 50% windfall tax and later took the percentage up to 99%. Negotiations to resolve the dispute failed and the matter is still before a World Bank tribunal called the International Centre for Settlement of Investment Disputes.
Indigenous challenges to concessions
The Maya of Belize have continued to challenge the decision of the Government of Belize to issue blanket concessions over what they deem to be ancestral lands in Toledo. Back in 2000, they had noted that AB Energy was given over 700,000 acres in the Toledo lowlands. The split to form US Capital and Island Oil put even larger acreages under contract for petroleum exploration.
“Oil exploration concessions have been granted in at least two Maya villages, San Antonio and Jalacte, and were made without any notice to, or consultations with village leaders,” said a statement Wednesday from the Maya Leaders Alliance (MLA). “Oil exploration could have major consequences for people living where it occurs; the decisions to grant these concessions should not be made without consultation of the affected villages.”
It supports the cause of the coalition saying, “The Maya of southern Belize stand in solidarity with other Belizeans who object to off-shore oil drilling in Belize’s waters, particularly in light of the Deepwater Horizon disaster off the U.S. coast.”
A petroleum company in Guatemala, Petrolera del Atlantico, of which Kiser is also named in past news reports as operations manager, had lost a part of its concession block in El Estor, Guatemala, after Q’eqchi Maya there protested under ILO Convention 169 Indigenous and Tribal Peoples Convention. The Guatemalan government, in rescinding a portion of the concession, cited violation of international treaty.
Charge Johnny for treason?
“I vote that the persons who signed [the Island Oil contract] should be charged with treason,” said Matura-Shepherd, later calling the names of Opposition Leader Johnny Briceño, and Director of Geology and Petroleum Andre Cho, among others.
“You see this wealth untold you think you own as Belizeans. You will only own it when you make sure you get rid of the tyrants and the despots,” she also commented.
Briceño told Amandala in response to Matura-Shepherd’s statement that he is considering legal action against Matura-Shepherd and Oceana for statements she made at the Oil Forum on Tuesday, that he committed a treasonous act in signing the concession over a disputed part of Belizean territory with the Guatemalan company.
“I am offended that somebody could say something like that about me,” Briceño commented.
Cho was also very angry over her comments, and he told us that he is looking into taking legal action against Matura-Shepherd, because accusing him of treason for signing the Island Oil document was defamatory.
“She is a lawyer and should know better,” said Cho.
Matura-Shephard told us that she is not fazed by the threat and if she has to, she, a trained attorney, will defend herself.
Looking now at the consequences at the BP oil rig explosion, Briceño, who penned his signature to the Island Oil extension for offshore exploration, said: “I don’t think we can take that chance” here in Belize.