“50 million barrels in the ground does not translate into recoverable crude,” said CEO Young
During Tuesday’s budget debate, Prime Minister and Minister of Finance Dean Barrow announced a major oil find—an estimated 50 million barrels—in northern Belize. Today, Amandala got some details of the find from Chief Executive Officer in the Ministry of Energy, Dr. Colin Young, who told us that while the company, Maranco, has estimated that the crude oil reserve within a 2,500 to 3,000-acre chunk of northwestern Orange Walk could total 50 million barrels, preliminary indications are that the oil will be difficult and more expensive to extract than the crude at Spanish Lookout, which is a lighter crude.
“50 million barrels in the ground does not translate into recoverable crude,” said CEO Young.
Amandala readers will recall that recoverable reserves at Spanish Lookout were estimated at 10 to 14 million barrels of oil.
Young said that Maranco made the find after assessing the South Canal Bank #3 site, but the oil is 16 api (a unit of measure used by the American Petroleum Institute). This contrasts sharply with the crude that Belize Natural Energy found at Spanish Lookout, which Young said is 38-40 api crude.
What this means is that oil at South Canal Bank does not flow as well as the oil in Spanish Lookout, and unconventional techniques would have to be used to extract the petroleum – if the company deems it commercially viable to go to the production phase.
Young explained that when they found oil in Spanish Lookout and did a drill stem test (DST), they pumped over a 24-hour period and were getting about 1,200 barrels a day, but when a similar test was done three days ago, on Monday, March 24, at the Maranco site, they were only getting about 10 barrels a day.
Since it appears that the cost of extraction could become extremely high, Maranco would now need to find investors to inject the capital funds needed to explore the right technology for the enhancement of oil flow, Young explained.
Options include introducing chemical additives to the rocks to create more spaces so oil will flow more easily, or accessing the oil using a horizontal drill. Another technique is using high pressure water, but Young told us that he did not want to get into speculation. He noted that whatever method Maranco would propose will be subject to environmental appraisal and an Environmental Compliance Plan would have to be signed before works can ensue.
According to the CEO, a feasibility study will be vital in deciding whether Maranco will venture on to extracting the crude oil.
He told us that all the environmental regulations will have to be followed, and Maranco will have to do an Environmental Impact Assessment (EIA) prior to production drilling.