Article Preview By David Gobeil
I’ve noticed over the past several months a conspicuous absence of the seemingly never-ending parade of giant tanker-trucks traversing the Hummingbird Highway and Southern Highway in both directions.
Now, don’t get me wrong…. in some ways I’m very happy to see less of the 20,000 pound behemoths constantly rumbling down our roads, mainly because the hundreds of pot holes that have appeared on parts of the Hummingbird and Southern are a direct result of these trucks. These two highways, though quite well built, were just not designed to carry the constant weight of these massive vehicles. An engineer friend explained to me that in the mid-day sun, when the roads get super-heated, is when most of the damage occurs.
But, as a frequent traveler of these two picturesque highways myself, I’m also happy from a safety point of view. I’ve literally lost count of the number of tankers I’ve seen broken down, usually at the most dangerous of hill crests or blind corners. I even witnessed one tanker go off the road and overturn near Pomona a few years ago. I found it interesting how there was no mention of the ensuing spill in the media, although the oil company, to it’s credit, were on-scene unbelievably fast and had the entire mess “cleaned up” in very short order.
However, in the grand scheme of things, I also know that fewer trucks means less oil, which means less money for the government and people of Belize. And that obviously concerns me. I’ve also noticed, in very un-scientific fashion, there seems to be fewer trucks when the world price of oil drops too far, or gets too high for that matter. (The company would not want to produce too much of their finite asset during either of these times. When the price it too low the reason is obvious… however when the price reaches a certain high-point, I think around $100 usd per barrel, a hefty “windfall” tax kicks in which is paid to the government of Belize….)
So, I’m very happy to see some local journalists taking a peek at what’s going on with Belize oil industry.
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Spanish Lookout, Tuesday, October 24th, 2012 –If it wasn’t for the robust flame from the flaring of gas from the extraction and separation operations at Belize’s first producing oil field a visitor could be excused for thinking at first glance that they were on a college campus. The peaceful almost bucolic rural scene is only occasionally interrupted by heavy equipment, mostly trucks, and workers in overalls. Most of the time it is the clerical and white collar workers dressed more like college students or in exercise clothes who appear in sight.
I had thought that with persistent reports of a sharp decline in oil production there would be visible signs of concern if not alarm, here at Belize Natural Energy’s operations headquarters and oil field but there was no such evidence during my visit today. Instead most of the staff who answered freely when questioned said that they did not feel alarm because in their view there was no reason for concern.
In an interview Belize Natural Energy’s marketing manager Daniel Gutierez confirmed that production had fallen from 5,000 barrels per day in 2008, by nearly half to just 2,600 barrels per day.
Gutierez said that despite having 13 wells operating at Spanish Lookout, and four more at Never Delay, production has been in gradual decline and the company’s executives and technicians did not know when the decline would stop. They were confident, however, that at some point it would stop.
When the field was discovered in 2005, initial estimates were that it had 18 million barrels of oil. Two years later that was revised upward to a 40 million barrel reserve. Belize Natural Energy (BNE) may have extracted approximately five million barrels from the field over the last six years. Using the industry standard of a 30% recovery factor the experts and the company believe that it will be in operation at Spanish Lookout and Never Delay for several more years.
Most economists credit revenue from Belize’s nascent oil production industry as the primary factor in helping the nation weather the bad economic conditions of the last several years. The bounty from the discovery impacts in many areas of the economy and not only on the Government’s balance sheet. Services and products providers of all description are numbered among the industry suppliers and they as well as a work force of nearly 400 persons also benefit directly from the discovery and subsequent production of oil in Belize. And despite the decline in production, higher world market prices for crude oil have not meant a proportionate decline in revenues.
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