ny

No more bungle in Belize’s jungle

By Simon Romero
The New York Times

SPANISH LOOKOUT, Belize, Feb. 17 — Near this small Mennonite town carved out of the thick jungle, a farmer dug a shallow water well a few years ago and found a viscous black liquid seeping into the water. Given Belize’s disappointing record of oil exploration, stretching back to its years under British rule, nearly everyone shrugged at the story except a stubborn Denver geologist.
Michael Stravato for The New York Times

Jake Letkeman, the operator of a small Mennonite-controlled electricity plant in Belize, filling a generator tank with local oil.

Chevron and Royal Dutch Shell, shun such gambles for larger so-called elephant projects with more promising returns.

But with oil fetching more than $60 a barrel on world markets, smaller companies are willing to risk just about everything these days in hopes of finding even tiny oil fields.
[Oil prices rose to $61.46 Monday in reaction to rebel attacks in Nigeria.]

“There were 50 dry wells drilled in Belize over 50 years until we came along,” said Susan Morrice, a geologist from Denver. She is the wildcatter behind Belize Natural Energy, a venture she formed with the backing of her husband, the Colorado oil executive Alex Cranberg, and more than 70 small investors from her native Ireland. “We simply felt we could not fail in our search for oil in such a promising, if neglected, country.”

Ms. Morrice’s company has been remarkably swift in turning the discovery into cash. In January, Belize Natural Energy loaded 40,000 barrels onto a barge destined for a refinery in Houston, netting the company about $2 million.

With other wells planned in Spanish Lookout, it soon expects to be producing 5,000 barrels a day, and some geologists say Belize as a whole may one day produce 50,000 barrels a day.
That is a drop in the bucket compared with neighboring Mexico, where daily output is 3.4 million barrels a day. But it is significant for a small country on the margins of the global economy that has long scrounged for enough hard currency to import all its oil.

Belize imports about 5,000 barrels of oil a day, and gasoline costs nearly $5 a gallon. So the crude in Spanish Lookout has allowed this country to dream of energy independence.

Still, Belize, known as British Honduras until it was granted autonomy from Britain in 1981, faces some serious obstacles before it becomes anything resembling the Kuwait of Central America. About the same size as nearby El Salvador, it has only 4 percent of that country’s population. It also has no refineries or pipelines and, unlike many developing countries, it has no national oil company or even an oil ministry.

But Belize does have a hidden asset in a civil servant, André Cho, who spends his time in a modest bungalow with linoleum floors and a screen door, in the capital city of Belmopan.

“I’ve been under a lot of stress lately, man,” said Mr. Cho, 29, Belize’s inspector of petroleum. The phone in Mr. Cho’s office, which holds stacks of dog-eared copies of Oil & Gas Journal and British-era geological maps, has been ringing repeatedly in recent weeks with inquiries about drilling licenses from small American and European oil companies.

“We don’t want to repeat the mistakes of other oil countries, like Nigeria,” said Mr. Cho, wearing jeans and a gold earring. He said the government had recently approved his request to hire more staff geologists, as well as a former United Nations consultant from India who specializes in organizing the petroleum industries of poor nations.

On the drawing board as well, she said, was a project to use natural gas from the oil wells to fuel electricity plants, which might allow Belize to avoid costly and environmentally controversial hydroelectric dams. Other projects include a pipeline and an export terminal on the coast.

These ambitious plans, though, hinge on a smooth political environment in Belize. The United States is transferring its embassy from hurricane-battered Belize City to Belmopan, the centrally planned capital in the interior, laid out by the British in the 1970′s, that resembles a small Brasília. The American embassy complex, under construction, would dwarf the capital’s other structures, including federal buildings designed along Mayan temple motifs.

The most acute political risk for Belize’s nascent oil industry may be a long-festering territorial dispute with neighboring Guatemala, the most densely populated country in Central America and home to 12 million people. Guatemala waited until 1992 to recognize Belize’s independence officially.
Generations of Guatemalans have been taught in school that “Belice es nuestro,” or “Belize is ours,” a slogan that might acquire new resonance if abundant oil is found in Belize.

Representatives of the two countries agreed this month to begin negotiations to resolve territorial claims, but areas of Belize where oil exploration is taking place or planned remain squarely in land still claimed by Guatemala. Spanish Lookout is just a 20-minute drive from the Guatemalan border, where migrants seeking available land, many of them Maya Indians, have settled.

Irma Uck, a shopkeeper at the border crossing of Benque Viejo del Carmen, and who said her father was Guatemalan, said the oil discovery would add to tension in the area.

“Guatemala has a little oil, but they want more,” Ms. Uck, 52, said. “Everyone here has heard that Belize now has oil.”