"We are pleased to work with Providence and wish them well," stated Florencio Marin, Minister of Natural Resources. "We are eager for more discoveries of black gold," Marin continues, "and we chose Providence as a petroleum partner because they have the knowledge and expertise we believe will lead to another discovery, which will be beneficial to both Providence and our country."
Although its agreement extends up to eight years for exploration, the contract maintains that every discovered oil field has a 25-year contractual life. Through the past year, in partnership with the Ministry of Petroleum, Providence has assembled the most extensive data room on hydrocarbons in Belize. This data — reprocessed well logs, seismic surveys, and over 200 feasibility studies and maps — should give the Company a strategic advantage in Belize. Providence has been actively studying this and other geological data, and the Company has already identified multiple areas for future development.
"Exploration in Belize has hardly begun, which is interesting since nearly all of the 57 wells drilled there either had oil shows or are currently producing oil, indicating the source rock is exceptional," said Providence Energy Group CEO, Scott Bayless. "There are 20 times more wells drilled in the state of West Virginia each year than in the entire history of Belize, and nearly every well was explored years ago with rudimentary technologies that we would consider antiquated by today's standards."
With the recent discoveries in Belize, there is little doubt whether hydrocarbons exist there. According to Dr. Kyou Kim, PhD, Providence's senior geologist, "Belize is very significant in terms of petroleum geology. Approximately 200 million years ago the Yucatan peninsula was adjacent to the coast of Venezuela, where some of the largest oil fields are known to exist. That this peninsula (encompassing Southern Mexico, Guatemala and Belize) holds the 2nd largest oil field in the world (the Cantarell field of Mexico) is no coincidence," stated Kim. "This region resembles the Gulf region of the Middle East, which holds over 50% of our known reserves. Not only does the Yucatan have a similar geology as the Gulf, but it also has an analogous subduction zone — a geological phenomenon which continually generates both petroleum and petroleum traps and renders the 'chicken-and-the-egg' problem of timing somewhat irrelevant."
The subduction zone Dr. Kim refers to is an area on the western coast of Mexico, where the organic rich sedimentary Pacific basin is folding underneath the Mexican continental shelf at a rate of about 5 to 15 centimeters per year. Similarly, the Saudi peninsula is folding underneath Iran, which Kim believes is the primary generator of petroleum and traps for that region. The timing problem, he referred to, constitutes an industry concern that traps are oftentimes created before oil migration, which renders them empty. With a subduction zone, on the other hand, oil is continuously generated and traps are continually formed.
The Company believes not just that Belize will become a significant petroleum state, but that its concessions will be a major area of discovery. "We are more than elated with the location of our concessions," stated Bayless. "They are strategically positioned in southern Belize where we believe a major oil migration path extends from Southern Mexico and the subduction zone, through Guatemala, into Belize."
Reminiscing this idea, Dr. Ramanathan, Ph.D., Petroleum Consultant to the Government of Belize, publicly stated after the last discovery (March 28, 2006 Channel 7 News conference) that he believed the next place of discovery in Belize would be the "Southern offshore basin, where it is continuous with the field of Guatemala… and also the southern basin on land near Crique Sarco, Monkey River and the Punta Gorda Belt and more in the southern offshore basin including Glover's Reef." Providence's concessions encompass these areas.
"Our concessions contain oil seeps, gas seeps, tar balls and oil slicks," Bayless continues. "Many people don't realize that a seep producing a barrel per year beginning in the Cretaceous period would have filled a trap with 75 million barrels by the present age, about the same size of the current producing field in Belize. What's really exciting is the petroleum seeps and slicks throughout our concession areas are much more prolific."
Interestingly, the Cantarell field, just over 100 miles north of Belize, was discovered near an oil slick reported by a fisherman named Cantarell.
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