Belize Oil: Stuff Dreams Are Made Of (2006)
A story waiting to be told: There are many chapters in the
tale of Oil in Belize – some geological, some political, some
personal, some corporate. And all point the same direction.
Oil in Belize.
It could be an epic poem written by Byron, or a
knowing verse by Rudyard Kipling.
It’s also a ripping adventure, with a small band of True
Believers finding victory on a remote frontier.
Oil in Belize has two main chapters.
The first, a tale of determination.
Geological map of Belize north of the 17th parallel.
The second, a twist of politics and fate.
At the end, it’s the story of a tiny part of a huge industry,
in a very small corner of the world.
Belize stretches down 174 miles of Caribbean Sea
shoreline, just south of Mexico’s Yucatan Peninsula and
east of neighboring Guatemala.
Covering less than 9,000 square miles, Belize is the
second smallest nation in the Americas, and the only
Central American country without a Pacific Ocean coast.
Formerly known as British Honduras, it gained
independence from Britain in 1981. English is still its
Decades of exploration dating back to the 1950s found
minimal crude oil in Belize, nothing near commercial
Plenty of companies tried.
“Basically there were 51 wells drilled on very good
prospects – Esso, Phillips, Placid, Spartan – they were
really good stuff,” said Larry Jones, president of Spartan
Petroleum Corp. in Houston (and the current chair of the
AAPG House of Delegates).
Now Spartan Petroleum is back, having signed a
Production Sharing Agreement with the Belize
government, covering a contract exploration area of
almost 250,000 acres.
Given Mexico’s prolific oil production and a smattering
of small but commercial wells in northern Guatemala,
finding oil in north Belize might have sounded perfectly
Not to Jones.
For one thing, a 50-year history of dry holes did not
Also, likely equivalent producing zones in Guatemala
are far from prolific. The entire country’s production is
estimated around 22,000 barrels per day.
And in fact, the real daily oil production of Guatemala
- (a) Anybody’s guess, and
- (b) Not much.
Almost Paradise? Belize is a land known for beautiful beaches and gorgeous scenery,
which have made it a popular vacation destination. Several geologists believe it may be
something more: They say the country holds a delicious potential for oil exploration.
“I wasn’t very sure there was oil in Belize,” Jones said.
“I had a 20-year hiatus waiting on oil to be found there.”
A Dream – with Benefits
So when tiny Belize Natural Energy Ltd. discovered
commercial oil reserves with three good wells onshore
Belize last year, it sent a ripple through the industry.
The company had signed an agreement with Belize in
2002 and obtained an exploration license that ultimately
covered 595,000 acres. It then acquired and processed
2-D seismic data in areas of interest.
By 2005, Belize Natural was ready to spud its first well,
not far from unsuccessful previous drilling.
A true wildcat and longshot, the well came in.
Production reportedly flowed from two Cretaceous
zones above 4,000 feet, the Yalbac and Hill Bank
formations. Both are believed to have equivalents in the
producing Coban formation in Guatemala.
Unlike other regional production, the Belize crude
tested sweet – 38-degree API gravity.
Initial production of 500 barrels per day from the
discovery well rose to 2,800 through additional drilling and
The government of Belize has 10 percent equity in the
Investment company CHx Capital of Denver also hold
an equity share, according to CHx executive Todd
The discovery came near Spanish Lookout, about 125
miles east of Guatemala’s largest oil field and less than 35
miles northwest of Belmopan, Belize’s capital.
Belmopan is noted as one of the least populous
capitals of any non-island nation in the world. San Marino
city in San Marino may be smaller, but San Marino covers
less than three-tenths of a percent as much area as Belize.
In one irony, the Spanish Lookout
discovery came not far from the site of an
early Belize wildcat, drilled by Gulf Oil in
The field lies under land of a Germanspeaking
Mennonite settlement, which will
share a small portion of royalties.
Leading the Way
Oil in Belize could be a novel by
Graham Greene or Evelyn Waugh, a biting
commentary from V.S. Naipaul.
It’s the story of two women from Ireland;
of another two long-time believers in
Belize’s potential; and of their investors and
One of the women, AAPG member
Susan Morrice, is a Denver-based
geologist with two decades of experience
Jones has the highest regard for her.
“She stayed 20 years and just kept
working the system,” he said.
CHx Capital, a backer of the discovery
play, is headed by Denver oilman and
AAPG member Alex Cranberg.
Cranberg is known as a wily investor –
and also as Morrice’s husband.
The other woman, Sheila McCaffrey,
came from outside the industry to become
eventual chairman of the operating
Another founder, AAPG member Jean
Cornec, did seminal work in the 1980s
identifying Belize’s stratigraphy. Paul
Marriott, a British rig contractor, headed
the drilling operations.
But probably the biggest believer in the
country’s petroleum potential, Mike Usher,
was a Belize engineer who died before the
Spanish Lookout drilling began.
The discovery well and two
confirmations – Usher 1, Usher 2 and
Usher 3 – were named in his honor.
‘A Real Puzzle Box’
AAPG member David King, a professor
in the geology department at Auburn
University, has conducted stratigraphic
studies in Belize.
An overview paper, “Stratigraphy of
Belize North of the 17th Parallel,” by King,
Kevin Pope and Lucille Petruny, appeared
in the Gulf Coast Association of Geological
Societies Transactions in 2004.
King referred to Belize as “a real puzzle
box” in terms of geology.
“There is no formal stratigraphy in
Belize. It’s all informal. Cornec himself says
all the units are informal,” he said.
“For a lot of the units, the type sections
are just not there anymore,” King added.
In general, south Belize is dominated by
the Maya Mountains, a rugged plateau
with a thick section of deformed and
sedimentary and volcanic strata,
according to King.
A thin section of Paleocene-Pleistocene
carbonates comprises most of the coastal
plain in north Belize. A moderately thick
section of Mesozoic strata, mostly
carbonates, is found in the subsurface and
in outcrops near the mountains.
In north Belize, the Lower Cretaceous
Hill Bank formation appears as a shallow
shelf carbonate unit that developed across
the area before subsidence of the Chipas-
Peten Basin, according to King.
The Hill Bank, consisting of porous, tan
to gray limestones and dolostones, may be
equivalent to the lowermost Coban
formation and the San Ricardo in
The interbedded limestones,
dolostones, shales and anhydrites of the
Yalbac formation represent sedimentation
on the eastern margin of the Chipas-Peten
Basin, which began subsiding during Early
to Middle Cretaceous, King wrote.
In northern Belize, the Yalbac thickens
to more than 3,200 feet, as shown by well
control. King et al. believe the Yalbac is
probably equivalent to the upper Coban
formation and lower beds of the Campur
formation in Guatemala.
Two Anschutz Overseas Corp. wells
drilled in 1972 made note of a dolostone
“Roaring Creek oil zone” above the base of
the Yalbac, King said.
A Source Mystery
Source rock remains a mystery for
geologists who’ve studied Belize, including
Cornec, and for previous exploration
“We primarily had a problem with
sourcing,” said Jones, who differentiates
the country’s oil from Guatemalan
“There’s quite a bit of Jurassic
involvement in Guatemala,” he said. “That’s
not a very strong province right now.”
“In the Corozal Basin, there’s a lot of oil
that’s tight that has Jurassic footprints,” he
King said stratigraphic mapping of
Belize remains incomplete, and is
complicated by the fact that the country’s
Ministry of Natural Resources does not act
as a clearinghouse for formal
At the K-T boundary, “there’s a fairly
substantial section, in some cases 15-20
meters of ejecta, and it’s not even
mapped,” he noted.
With so much work remaining, King
sees all of Belize as a fertile region for
“What’s so interesting to me as a
stratigrapher is that it’s like the wild, wild
west,” he said. “There’s a potential to find
stratigraphic units that nobody has ever
Oil in Belize should be a play by
Terence, the ancient Roman-Carthaginian
with an eye for tragicomedy.
After Belize Natural Energy
announced its discovery, the country’s
media widely reported royalty payments
to the government at 7 to 7.5 percent.
That led to criticism of the official
agreement with the company. Royalties in
other countries approach 70 percent,
some commentators noted.
Belize’s Minister of Natural Resources,
the Hon. John Briceno, defended the
terms. He compared criticism in
hindsight to speculation after winning a
“Now that you know what you have,
it’s like the Lotto. After the Lotto has
played and you know the numbers, you
would say, ‘If I used these numbers, I
would have won the Lotto,’” he observed.
Other officials defended the terms as
necessary to attract exploration after so
many past failures.
Local unhappiness over the
government’s take remained.
In June, Belize announced plans to
tax Belize Natural’s profits at 40 percent.
McCaffrey responded that the
existing agreement set income tax at
25 percent. A tax rate of 40 percent
would hamstring further exploration
and development work and discourage
industry involvement in Belize, she
By early July, the company and the
government were locked in dispute,
operations were suspended and
McCaffrey had even threatened to pull up
stakes and “go to another place in the
world that has better conditions and more
The government’s response:
See you later.
Oh, and thanks for the oil.
The Stuff of Dreams
Clearly, Belize could not enter the oil
age without an environmental dispute.
That’s happening in Sarstoon Temash
National Park in south Belize, where
environmentalists say seismic work for
exploration could disrupt a bird habitat,
the only known lowland sphagnum moss
bog in Central America and the only
comfra palm forest in Belize.
King and his co-authors began their
paper on Belize with a quote from Aldous
Huxley, writing about the ends of the Earth.
Considering the background of the
discovery group, a more poignant quote
would come from the Irish poet William
I have spread my dreams under your
Tread softly because you tread on my
SOURCE: AAPG Explorer, August 2006