Irish poet William Butler Yeats:
I have spread my dreams under your feet;
Tread softly because you tread on my dreams.
The first discovery of petroleum and gas deposits in Belize was made by Belize Natural Energy Ltd. in 2005 when the first well in Spanish Lookout began producing. Belize National Energy (BNE) has seen its production reach 5,000 barrels per day.
BNE began looking for oil in Belize in 2002. Spearheaded by two Irish women and a Belizean engineer , the small company found oil after most of the major oil companies had tried and failed over the past 50 years. Photo – Belize oil pumping station at Spanish Lookout.
One of the women, Susan Morrice, is a Denver-based geologist with two decades of experience in Belize.
CHx Capital, a backer of the discovery play, is headed by Denver oilman and Alex Cranberg. Cranberg is known as a savvy investor – and also as Morrice’s husband at the time – they are now divorced.
The other woman, Sheila McCaffrey, came from outside the industry to become eventual chairman of the operating company. Another founder, Jean Cornec, did work in the 1980s identifying Belize’s stratigraphy. Paul Marriott, a British rig contractor, headed the drilling operations. Today Marriot is a big player in the Belize petroleum logistical support services sector.
The biggest believer in the country’s petroleum potential, Mike Usher, was a Belize engineer who died before the Spanish Lookout drilling began.
The discovery well and two confirmations – Usher 1, Usher 2 and Usher 3 — were named in his honor.
David King, a professor in the geology department at Auburn University, has conducted stratigraphic studies in Belize.
An overview paper, “Stratigraphy of Belize North of the 17th Parallel,” by King, Kevin Pope and Lucille Petruny, appeared in the Gulf Coast Association of Geological Societies Transactions in 2004.
King referred to Belize as “a real puzzle box” in terms of geology. “There is no formal stratigraphy in Belize. It’s all informal. Cornec himself says all the units are informal,” he said. For a lot of the units, the type sections are just not there anymore,” King added.
In general, south Belize is dominated by the Maya Mountains, a rugged plateau with a thick section of deformed and metamorphosed Carboniferous-Permian sedimentary and volcanic strata, according to King.
A thin section of Paleocene-Pleistocene carbonates comprises most of the coastal plain in north Belize. A moderately thick section of Mesozoic strata, mostly carbonates, is found in the subsurface and in outcrops near the mountains.
In north Belize, the Lower Cretaceous Hill Bank formation appears as a shallow shelf carbonate unit that developed across the area before subsidence of the Chiapas-Peten Basin, according to King.
The Hill Bank, consisting of porous, tan to gray limestones and dolostones, may be equivalent to the lowermost Coban formation and the San Ricardo in Guatemala. The interbedded limestones, dolostones, shales and anhydrites of the Yalbac formation represent sedimentation on the eastern margin of the Chiapas-Peten Basin, which began subsiding during Early to Middle Cretaceous, King wrote.
In northern Belize, the Yalbac thickens to more than 3,200 feet, as shown by well control. King et al. believe the Yalbac is probably equivalent to the upper Coban formation and lower beds of the Campur formation in Guatemala.
Most of Belize’s 8,867 square miles of territory and much of the waters offshore have been allocated out in petroleum concessions to 18 different companies with a range of foreign shareholders from as close as the USA and as far off as Taiwan and even a local gambling den.
Belize Natural Energy (BNE) has one of those 18 contracts, and it remains the only company producing and exporting oil from Belize, since it found oil in Belize.
Apart from having a 36% stake in BNE’s half-million acre concession area within the Belize and Cayo Districts, it also has interest in the Toledo block of US Capital, as well as the West Bay block in Orange Walk.
Princess Petroleum Limited, belonging to the owners of the Princess Casino, has a contract to explore 1 million plus acres of Belize for oil. The license, is mostly offshore, but also some inland exploration. The company is allegedly well connected with local politicians of the ruling United Democratic Party.
The latest discovery was by BNE in January of 2010 when an oil field at Never Delay near Belmopan was declared commercial.
There were hopes that Gallon Jug (in the RSM block), Yalbac (in the West Bay block) and Calla Creek (in the BNE block), would have oil. However, none of the test wells have been successful so far.
In the south of Belize, in Toledo, US Capital has some more seismic planned. They have already done 40 kilometers of seismic in the Sarstoon Temash National Park (STNP). Photo: Drilling for oil in Belize.
The Chinese Petroleum Corporation (OPIC) had visited Belize in 2009 to collect data and take back to Taiwan to review and reprocess. Since then it has officially abandoned all prospecting licenses it held in Belize. This is believed to be connected to the growing public disaffection in Belize over oil drilling.
The 18 companies with petroleum contracts are: BCH International Inc, BelGeo Ltd., Belize Natural Energy, Blue Creek Exploration Ltd., Island Oil Belize Ltd., Miles Tropical Energy Ltd., Northern Spirit Resources Inc., OPIC Resource Corporation (now abandoned), Perenco Limited, PetroBelize Ltd., Princess Petroleum Ltd., Providence Energy Belize Limited, RSM Production Corporation, SOL Oil Belize Ltd., Spartan Petroleum Corporation, US Capital Energy Belize Ltd., West Bay Belize Ltd., and ZMT International Inc.
Companies have up to 8 years to explore for oil, and 25 years to undertake production and pump oil commercially out of the ground. If no oil is found within the eight-year exploration phase, the contract “self-terminates,” meaning it is no longer in effect.
The current United Democratic Party government has made an election promise to establish a Belize Petroleum Trust Fund to benefit all Belizeans which much needed social programs. Some 60% of Belizeans are classified as living in poverty. But more than three years after taking office, the trust fund is yet to be established and all oil revenues – estimated at $120 million – are absorbed by the government for its day to day operations. The government claims that crushing debts has forced it to channel oil revenues into government coffers and is hoping for new oil finds to be able to help meet election promises.
In the wake of the BP Gulf of Mexico Oil spill, a movement has started in Belize to ban offshore drilling. Led by environmental organizations and civil society, the movement has questioned the government’s decision to allow oil drilling in the sensitive Barrier Reef World Heritage Site zone.
Update April 2013: The Supreme Court has declared null and void all offshore oil exploration contracts issued by the government of Belize.
History of Oil Exploration In Belize
Little is officially known about the history of oil exploration in Belize.
A local newspaper recently reproduced an old interview with a Belizean Mr. Compton Fairweather who was involved in the early search for oil.
The esteemed and highly knowledgeable Compton Fairweather, CBE, published at least two articles in June 2006 issues of The Reporter, where he discussed his employment with Gulf Oil Corporation of Pittsburgh, Pennsylvania, in the business of oil exploration in British Honduras. Personally, I only have the second of these articles, and I will quote some of Mr. Compton’s revelations and opinions in that article.
“My duties with Gulf were to assist and be trained by senior geologist, Dr. Giovanni Flores, on Italian geologist employed by the company. We explored every river bank, highway excavation, quarry, cave, sink hole and outcrop we could find between the Sarstoon and the Rio Hondo Rivers, taking samples from the sedimentary rock strata.”
“Yes! We did find oil (called ‘shows’ in the industry) at two locations. The best quality was found at the Galvez ranch between San Ignacio and Benque Viejo, now known as Clarissa Falls. The other was at the Western Highway and Belmopan junction, now known as the Agriculture Show Grounds. Even today, almost anyone can break the right rock and if lucky can fill a jar with oozing crude oil.”
“As I have indicated earlier, the Southeastern Mexico oil find which was producing 235,000 barrels of oil per day brought Mexico’s daily output to 635,000 barrels per day by the end of 1974, and it is part of the same Cretaceous zone we were exploring in the Yalbac area in the mid 1950’s. It is my honest belief that when Belize achieves an oil bonanza it will be in the Yalbac area.”
— Compton Fairweather
Editor’s Note: Mr. Fairweather errs in his location of the Belmopan oil find. The oil show was actually about half a mile from the Belmopan junction, on the road north from the Hummingbird leading into the WASA facility. As Chief Information Officer of Belize I personally visited this well and was shown (and collected samples from) oil flowing after a valve was opened by Belize Department of Geology officials.
Mr. Fairweather refers to an area “..now known as Clarissa Falls”. The area was actually known as Clarissa Falls well over a century before Mr. Fairweather was born. Clarissa Falls was given its name in the 18th century by the great Belize-Irish patriot Thomas Paslow in honor of his wife Clarissa Paslow nee Carter a Creole (Afro-English). Thomas Paslow was active in the Public Meeting (the first form of government in the then British Honduras settlement), the great debate over Evacuation in 1797, the Battle of St. George’s Caye in 1798 and in defying British Army Superintendents for some 22 years.
— M.A Romero – Managing Director Belize.com Ltd.
Update: Mr C. Fairweather is right to point out that an oil seep was found near the Belmopan Agricultural how Grounds close to where the old bridge over the Roaring Creek used to be (and downstream from present day bridge). A well was drilled by Gulf Oil-Bahamas Exploration on the National Agriculture and Trade Show Grounds itself. Mr Flores, Mr Fairweather, Mr. Crebbs and team also reported one oil seep downstream from Clarissa Falls and another upstream from Bullet Tree Falls; they located another one by Hell’s Gate near the Sibun-Caves Branch junction. There is a great geology report and map by G. Flores (1952) available at GOB/GPD. – Jean H. Cornec
Addendum November 2011
The following information as posted to the Belize.com Mailing List:
Detailed History of Oil Exploration In Belize
The laws governing licenses for exploration of oil and gas are some of the most liberal in the world. Total footage of nearly 250,000 ft were, drilled and about 6,000 line miles of seismic surveys were conducted. Besides this, aeromagnetic, gravity, and geological mapping were done.
Photogeomorphological interpretation, morphological studies from toposheets, and landsat imagery studies also were carried out. Shallow seismic surveys for the sea bottom were carried out in parts of southern Belize offshore. Forty exploratory wells and eight shallow stratigraphic holes were drilled. The depths of the exploratory wells ranged from 3,500 ft to 16,000 ft. A number of wells never reached the target depth (see Table 1), and in most of the wells production casing was not lowered and conventional testing not done. The depths of the shallow wells, which were for structural information, ranged from 1,990 ft to 2,843 ft in an area covering a few square miles. In the northern Belize, where 24 wells were drilled there are live oil shows in many of the wells. One of the wells in the DST gave a 60 ft oil column of 32 degrees API.
Shell was the first company to obtain an exploratory license as far back as 1938 and carried out geological surveys on the ground and photogeological studies with the help of aerial photographs obtained from a contract with Fairchild Aerial Surveys Inc. The outbreak of World War II in 1939 saw the end of exploration by Shell Gulf was awarded a license obtained through one of its subsidiaries in 1949. The license covered the entire country and its territorial waters comprising 12,600 sq miles. Six years later in 1955 Gulf drilled the first wildcat at Yalbac on an “anticline” which is exposed and defined by photogeological studies.
In 1956 and 1957 Gulf, which entered into a partnership with Shell in 1957, drilled four more wells in northern Belize. In 1958 Gulf transferred its ownership to Bandini Petroleum Co., which in turn assigned its rights to Phillips. In the same year, Gulf drilled four more wells, and Phillips began its exploration activity in southern Belize by drilling two wells on land in 1959. In 1961, Phillips drilled the deepest well in Belize, in the southern offshore, named 1 Palmetto Caye 1. The fourth well, also in the offshore, was drilled in the same year. In the next year, Phillips drilled three more wildcat wells, which turned out to be wells drilled for stratigraphic-structural information. Phillips drilled its eighth test well in southern Belize on land in 1963.
In 1967, Shell now called Belize Shell Development Co., in agreement with Phillips, drilled two wells in the offshore on two islands. Gulf, Phillips, and Shell carried out surface geological, photogeological, aeromagnetic, gravity, and seismic reflection work. other notable companies which contributed significantly are Anschutz, Exxon, Chevron, and Placid.
Anschutz drilled its first exploratory well in northern Belize in 1972. Six more wells were drilled in northern Belize in 1972 and 1973 by Anschutz, whereas Chevron commenced drilling an offshore well in 1974. In 1977 Exxon drilled two wells in southern Belize, one offshore and another on land. Exxon drilled one more well on land in southern Belize, and Anschutz drilled two offshore wells. Placid drilled four wells on land in northern Belize during 1981-82. The present position is that most of the offshore area up to the territorial waters is held by Central American, Pan American, Anschutz, and Petromar.
Belize Petroleum Revenue
|Table 2. Belize Revenue from Spanish Lookout Oil Field|
|Income Tax Royalty GOB WI GOB Prod. TotalYear Share($US) ($US) ($US) ($US) ($US)|
|2006 $6,137,946.98 $2,877,266.91 $9,015,213.892007 $8,472,141.17 $4,943,117.78 $13,415,258.952008 $12,118,034.17 $8,182,898.67 $3,077,116.00 $334,421.00 $23,712,469.842009 $10,200,744.92 $6,087,522.00 $4,118,135.57 $441,915.61 $20,848,318.102010 $21,037,494.36 $8,102,902.35 $29,140,396.71|
|Total $57,966,361.60 $30,193,707.71 $7,195,251.57 $776,336.61||$96,131,657.49|
Treaty Energy Oil In The News
A small company called Treaty Energy Oil has been doing limited oil exploration in Belize and issuing frequent, upbeat press releases. In January 2012 it issued a sensational press release stating it had stuck oil in southern Belize and discovered a new oil field containing some 6 million barrels of oil. Many radio and television stations in Belize and even media in North America carried this press release. The claim turned to be false and was refuted by both the country’s Prime Minister and the Belize Ministry of Natural Resources. Belize Government Says Treaty Energy Oil Strike Claim Is Bogus.
Updates On Oil Revenue Sharing Agreements
In a television interview on 11 June 2012 CEO in the Ministry of Petroleum Colin Young gave an update on the Maranco oil find and current oil revenue sharing structures.
R. COLIN YOUNG
“In terms of the Maranco oil find in the South Canal Bank #1 well, the company has completed its testing. Unfortunately they had some technical difficulties while doing that but they believe that what they have seen is good enough to report to the Department of Geology that they will proceed to drill an appraisal well as allowed under their production sharing agreement that allows them about 18 months to complete it and after that process they will be able to indicate whether or not the field is commercial or not. Appraisal well is where they dig a well where they initially found some oil, what they need to do now is drill another well that will allow them to collect additional information such as the amount of oil, the size of the potential field; they can dig up to three of those wells. After that process is when they will be able to ascertain as to how much oil is there and whether or not it is commercial or not. They have done the seismic testing which allows them to collect the data to indicate to them where to drill and they have dug the well and they have extracted some oil from that well but they have insufficient information at this point based on that well to decide and indicate whether the field is commercial and that is why they have to drill these additional wells to get a sense of the size of the field and the amount of oil they can potentially extract. They have 18 months because that is the amount of time they are allowed under the PSA, under their contract. Obviously, it is in the best interest of everyone, the company and the government for them to do this as quickly as possible.”
Young says that Maranco should restart drilling by next week. If the case may be that crude oil is found in commercial quantities, Young says that the agreed sharing agreement between Maranco and the Government of Belize is favorable for the country.
DR. COLIN YOUNG
“Well it goes on how smooth and whether there are any other technical issues but they have to get back to the depth that they are at now and as soon as that happens they will do another test again, what is called a production test, to see how much oil they can extract and using the data they will be able to gather how much they think is there and then how much they can extract and that is what everybody is interested to know. If it is a commercial field then what happens next is that they have to do another Environmnetal Impact Assessment prior to them actually producing the field and once they start to produce then government will start to obviously get its share.
“Maranco has a very favorable revenue terms with the government; for example, on the first five thousand barrels they extract, they will pay government 15% and they get 85%, on the other five thousand dollars, they will pay government 20% and if they were to find over thirty thousand barrels, they would pay government up to 40%. This is very favorable to the government compared to the old PSAs like US Capital and BNE where the share was 98.5% to 1.5% with this one we are starting out at 85:15.”
Belize Oil And Mineral Reports – comprehensive list of feasibility studies on petroleum and minerals with serial numbers for reference. Most of these reports are available from the Belize Geology and Petroleum Unit. PDF file. Link will open in new window.
Princess Petroleum Belize Environmental Report – Disclaimer: This report is made available for research and background only. We do not endorse or warrant any of its contents. PDF file. Link will open in new window.
Video On Belize’s Oil – The Border Dispute With Guatemala: