The board, which is made up of government and private sector entities, recommended the action to increase government revenues, the statement added.
The plan also calls for evaluating petroleum revenue management in other countries, and proposals to amend Belizean petroleum laws and contract models "to improve the legal and fiscal regimes for greater long-term benefits for the government."
"The board has taken on as a priority a study of the appropriate tax law for the petroleum industry and it is expected that proposals for a new petroleum law will be presented to cabinet before the end of this year," a separate government statement said.
As a result of the board's conclusions, the cabinet met this week to review the petroleum industry's tax regime and evaluate the potential impact of the industry on the nation's economy, the statement added.
The current tax regime includes 7.5% for royalties, 4.5% for production sharing and a business tax of 1.75%, Phil Pilgrim, Belizean oil company Belize Natural Energy's (BNE) financial controller, told BNamericas.
"It is a good tax scheme if you compare it to the oil industry worldwide, it is favorable, but that also plays into the fact that the country's in the early stages of understanding petroleum law," Pilgrim said.
After spudding a well on its Spanish Lookout concession in May 2005, BNE became the first company to find a commercial oil field in Belize in the country's 50-year exploration history.
With its Spanish Lookout and Belmopan concessions, BNE is one of only five oil companies active in the country, the director of Belize's geology and petroleum department Andre Cho told BNamericas.
BNE is producing an average 2,500 barrels per day (b/d) from three wells on the block with plans to drill a fourth well in two weeks and a total of 12 wells through 2006, Pilgrim said.
Shell (NYSE: RDS) and Exxon (NYSE: XOM) have approached the company to discuss possible partnerships, because the 42 grade API produced on the block is attractive for mixing with lower grade petroleum, he said.
Proved developed reserves on the Spanish Lookout block total 44 million barrels, with proved undeveloped reserves of roughly 56 million barrels, he said.
"No one's really ever given [the government] enough exploration for them to know what the country's reserves are. Belize Natural Energy is pretty much defining the potential right now."
BNE is launching a seismic program to further explore the field, and will drill two exploratory wells on its Belmopan block by June, the BNE executive added.
THE FUTURE OF EXPLORATION
The work plan also recommends establishing an exploration strategy for vacant lots and the creation of a negotiation team within the geology and petroleum department for future E&P contracts.
The board reviewed a proposed exploration strategy and will provide the natural resources, environment and local government ministry with its evaluation at a meeting in the coming days, the department director said.
Belize is divided into 21 petroleum exploration blocks, according to information posted on the natural resources, local government and environment ministry's website.
The board should "spare no effort to study available material and make recommendations to government to ensure that Belizeans benefit justly from this new industry," the statement quoted minister John Briceno as saying.
"Let us avoid the so-called 'resource curse' and establish a sound strategy and prudent framework to develop the industry and protect the revenue that will become available to Belizeans," Briceno added.
Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.
Most Popular Articles