Oceana says offshore drilling won’t pay G.O.B.’s super bond

The contract aside, Matura Shepherd says that contrary to government claims, offshore drilling cannot potentially bail the country out of the super bond debt.

Audrey Matura Shepherd, VP, Oceana Belize

Audrey Matura Shepherd

“Our people are being told that if we do offshore, we’ll get big money. And I am saying to the people, even if we find the oil, there will be some money it’s not going to come overnight. And then when we see the propaganda from the government that this money is needed to pay off a super bond, I have two things to say to that: look at the time line; we won’t be able to use that money when we get it because we won’t get it immediately to pay off no super bond immediately and two; I would want the Belizean people to thin, if we are getting money from oil which we put at risk our resources, would we want to throw our pearls to swines? Wouldn’t we want our oil money to put in specific funds or trust to deal with the betterment of the country? Why should we take that money and put it there? What then if we never find oil? You mean the government doesn’t have another plan on how to pay off that super bond?

“What Oceana has done is on the issue of offshore, we took an example. For example we look at Island Oil and we looked at the contract which is similar to the contract of Princess except that one was signed in 2007 and one was signed 2005 and we looked at what the law says and that is how we came up with our timeline. It is not untrue when we say that the exploration period can be up to eight years. If you allow me, I just want to quickly refer to the contract. I am reading out of Princess Contract. The contract gives you up to eight years to explore. Let’s say by the fifth or the sixth year you find something, that’s two years less for exploration, but you still have to factor in another five or six years to develop because the truth is none of these companies have the money. The experts were telling us a well put together platform for exploration is at least three billion dollars. None of these companies have three billion dollars to come and start investing on development. So that means they would have had to have show that through their exploration well that they have found enough oil and they’ve done an appraisal well to test that there is a big enough oil field. Then go to some institution, some bank abroad and convince them to lend us money so that we can improve this investment because see our data shows that there is oil. That won’t happen overnight either. Anybody who is involved in that kind of multimillion dollar business will tell you that it takes a while for you to take everything and persuade a bank and other investors to invest. It is not like onshore.

“Why do we say we will not see actually see any money until about 2027 or 2028? Why? Because, indulge me again Marion, Article 9 of the contract, and I am reading Princess’—this is your recovery. It comes over the heading called, “Recover of Petroleum Operations Expenditure” and it tells you clear. In each calendar year after discharging its obligations for royalty, the contract shall be entitled to [and shall means must in law] recover all petroleum expenditures incurred hereunder out of one hundred percent of the petroleum produced and saved in calendar year. Plus all unrecovered petroleum operation expenditures from prior calendar year. You know what that means, for those eight years you were exploring and the five years you were developing, you are entitled to recover that money for each calendar year out of what you are making now as profits. So yes you will be paying some taxes, yes you will be paying some royalty but because you are entitled to subtract that expense first, we will not be seeing some tangible amount of money ’til about—so we are about 2020, ‘til another seven or eight years. That is the mathematical calculations. We are not making that up and that is if you even find oil. And that is why we are saying if you are going to start seeing tangible money—we didn’t say you wouldn’t see any money, but some real money now finally coming to us—it won’t be ‘til 2027 or maybe 2028 and the super bond matures in 2029.”

Oceana will be holding a street side event at its office on Regent Street on Saturday morning from ten to answer questions and collect signatures to present to the Governor General against offshore drilling. The organization is looking to get the signatures of seventeen thousand voters, which represents ten percent of the total number of registered voters. Matura says that they already have a few thousand signatures.

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