One of the more remarkable things about the oil and gas industry is its ability to penetrate every nook and cranny of the known world. Even the tiniest of countries count. Consider Belize.
About 22,960 sq km in size, Belize lies south of Mexico, east of Guatemala, and is just a 2-hr flight from Houston or Miami. With just 320,000 people, Belize has the lowest population density in Central America.
Yet, even those 320,000 people need all the amenities that oil and gas can provide, especially when the local population is augmented by tourists. In the past year, Belize has seen 150,000 tourists arriving by cruise ship alone.
That adds up to a lot of energy demand—even for such a tiny country. Altogether, according to the US Energy Information Administration, Belize consumed 7,400 b/d of oil in 2007—more than twice the 3,210 b/d the country required in 1998.
Production shortfall
As for production, Belize Natural Energy struck oil in the country 3 years ago, with output at 2,260 b/d in 2006. Since then, the figure has climbed. As of February, production from BNE's seven wells averaged 4,300 b/d.
That leaves a consumption-production shortfall of 3,100 b/d—a shortfall that creates space for international political maneuvering.
As might be expected, Venezuela President Hugo Chavez has his hand in Belize's politics. In 2006, under its PetroCaribe scheme, Venezuela began to supply Belize with 4,000 b/d of products.
In 2007, former Belizean Prime Minister Said Musa sought more help from Chavez, saying, "We're examining the possibility of a small refinery or a topping up plant to produce diesel in Belize."
Musa also said Belize needed to find its own oil. "As you know we have a small infantile oil industry—infant industry—producing about 3,000 b/d and we, of course, need to do more exploration."
Empty promises
In 2007, Venezuela mentioned plans to study construction of a small refinery in Belize, but nothing resulted.
Belize took steps to secure the refinery, with a 2,500 b/d facility now operated by the Blue Sky Co., while it also signed a production-sharing agreement with Taiwan's state-owned CPC in January.
There's irony here as CPC had its Venezuelan oil assets nationalized by the Chavez regime and is still negotiating compensation with Venezuela for its $85.2 million investment.
Could CPC's exploration off Belize yield financial results to exceed that $85.2 million loss, even as the Caribbean nation achieves a measure of energy security? Even the Taiwanese are being cautious after getting burned by Chavez.
"We'll send a team there (to Belize) to evaluate the potential for oil," said CPC spokesman Chu Shao-hua. "It's a high-risk area," said Chu, referring to South and Central America. "You've got to be reasonable in your investment there."
