More problems for Belize’s struggling oil industry
Posted: Sunday, July 2, 2017. 10:21 a.m. CST.
By BBN Staff: Belize’s oil industry, which is already facing rapidly declining production, is gong through even more difficulty as production at the Never Delay Oil Field, located north east of Belmopan, came to a halt.
Director of the Petroleum and Geology Department, Andre Cho, explained that Belize Natural Energy (BNE), the only oil producer in Belize, hit a rock formation which is making oil extraction difficult. Cho said that BNE is conducting studies to see what changes can be made to their extraction methods, to deal with the situation. He added that BNE hopes to have the field producing again by the end of the year.
Cho went on to say that production continues at the Spanish Lookout Oil Field but has fallen to around 1,000 barrels per day, in line with BNE’s projections that the oil in that field would soon be exhausted. The 2015 report prepared by BNE estimated that the oil reserves would face depletion by 2021, and that revenues would continue to decline over that period as the field produces progressively lessening amounts.
Even though the volume of oil has declined, revenues have actually gone up due to the increase of oil prices on the world market. The Statistical Institute of Belize (SIB) reported that export revenues for crude petroleum rose significantly for the first five months of 2017 when compared to the same time period last year. The data from the SIB’s External Trade Bulletin showed that oil revenues went from $7.1 million in 2016, to $11.4 million although there was no change in the volume of oil exported.
While the price of oil is increasing, the amount is still at a level where it is unprofitable for oil companies to conduct oil exploration in Belize. Cho said that none of the six companies with oil concessions are conducting exploration.
“The companies are saying that, ideally, they would want to see oil go up to about US$80 a barrel before they start exploring again. And it’s no where near that at the moment,” Cho said.
The price per barrel for oil on the World Market as of May 2017, stood at just over US$49. The industry is facing a complete shutdown if more oil isn’t discovered; however, BNE, the only company that has stuck oil in Belize, does not have any concession to conduct oil exploration.
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