Despite record low oil prices, a glimmer of hope for Belize’s struggling oil industry

By BBN Staff: Original estimates from the Department of Geology and Petroleum had predicted that output from Belize’s oil reserves would have dwindled so low that extracting oil would have been unprofitable by 2021. And with no new wells found and very few companies conducting oil exploration, the industry which represents a significant part of the country’s export revenues was headed towards collapse. However, a new player in Belize’s oil industry – Saba Energy – is set to begin exploration this week. As well, interventions being made by Belize Natural Energy Limited (BNE) bring the possibility of extending the life of the current oil wells and its benefit to Belize’s economy.

Breaking Belize News (BBN) spoke with Director of the Geology and Petroleum Department, Andre Cho, who explained that Saba Energy was granted a concession area and is set to commence operations today, April 20. Saba Energy has invested in and conducted all the required exploration work. BNE will utilize its predominantly Belizean workforce, as a third-party service provider contracted by Saba Energy.

Cho added that BNE hired a consultant that specializes in oil production to make recommendations on increasing the company’s efficiency. The recommendations were twofold and included addressing the amount of water being produced at the wells and changes to reservoir management.

“With that intervention the consultants say it could extend the life of the well to around 2030,” Cho said. “It’s not an overnight thing and these are all just projections.”

Cho noted that by implementing just some of the recommendations, BNE has already seen production climb to an average of 650 barrels per day. He also stressed that a major determining factor in the industry is the global price of oil, and with the recent crash in the global market price of oil, the industry is still in for some difficult days ahead.

Even at low market prices and reduced output, oil exports still amounted to over $20.3 million last year, which was around 5 percent of merchandise trade exports, according to data provided by the Statistical Institute of Belize.

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