From Yalbac #1 to Mike Usher #1 - A Brief History of Exploration in Belize

Petroleum exploration began in Belize 1938 when Shell was given an exploratory license to conduct exploration work. The first exploration well, Yalbac #1, was drilled in 1956 in the Yalbac Area by Gulf Oil. Though dry or noncommercial, there were oil shows that indicated the possibility for the presence of a petroleum system. This sparked the interest of other major companies such Anschutz, Chevron, Texaco, Esso and Philips. As Majors, the aim was to explore for and successfully drill large structures targeting giant oil field (greater than 100 million barrels). This resulted in significant exploration work both onshore and offshore to identify drillable structures. With several structures identified, over 40 exploration wells were drilled by the end of the 1980ís, and all were unsuccessful with no commercial discovery. Several wells had oil shows. Most of the seismic and wells shown in the figure below were acquired and drilled during this period.

Naturally with no success, the majors would lose interest and leave. The wealth of the data that was acquired remained as the property of the Government of Belize. These data attracted the interest of smaller intermediate companies such as Petro Belize, Marathon, Eagle and Spartan. Companies like these saw smaller structures being as attractive. With new data and previously acquired data several more wells were drilled. By the late 1990ís hundreds of square kilometers of aeromagnetic and gravity data, hundreds of geochemical samples and thousands of line kilometer of 2 dimensional seismic were acquired; and 50 exploration wells were drilled in both the offshore and onshore area. A commercial discovery was yet to be made. Like other frontier high risk areas in the world, un-success was attributed to poor data quality and limited knowledge of the geology.

With the industry coming to a standstill due to the loss of exploration interest, the Government revisited the terms of the exploration licenses in an effort to offer more attractive fiscal terms and incentive to attract interest. In 2000, the country began to attract small independents such as Belize Natural Energy Ltd., US Capital Energy Belize Ltd., West Bay Belize Ltd., etc.

Improvements in technology had allowed for significant improvements in data quality. With this, companies were able to reprocess old data and acquire new data with improved data quality. The comprehensive compilation of new and old data allowed for a better understanding of the countryís geology. A reevaluation of the countryís potential showed that the country has an active petroleum system(s) and that several of the pervious wells were drilled off structure.

Belizeís first commercial discovery came in June 2005 when Belize Natural Energy Ltd. drilled its first exploration well Mike Usher #1 in the Spanish Lookout Community. Belize Natural Energy Ltd. made a second discovery in the Never Delay area with the well Never Delay #1. Both fields are located on the margin of the Corozal Basin, which is a part of the larger Peten Basin extending into Guatemala and Mexico. The produced oil is trucked to a gathering facility at the Big Creek Port for export to the US Gulf Coast. A percentage is sold on the local market to a few large scale producers in the agriculture industry. The associated gas from the Spanish Lookout Oil Field is processed into Liquid Petroleum Gas for sale on the local market. The success of BNE made Belize more attractive and allowed the Government to negotiate for more favorable fiscal terms in subsequent licenses.

The Mike Usher #1 and Never Delay #1 discovery wells were among almost 40 exploration wells drilled since 2005 to date, the majority of which had oil shows. Increasing exploration cost and other challenges made the country less attractive and support for exploration became more challenging. This however, could change with Maranco Energy Belize Ltdís recent (March 2013) discovery in the Gallon Jug Area. Maranco Energy Belize Ltd. is appraising its first discovery for its commerciality in the well South Canal Bank #1. If commercial, this could spark new interest in the country.

Currently, the petroleum exploration efforts are focused onshore Belize. Data acquired so far have shown that there are significant potential in Southern Belize. US Capital Energy Belize Ltd. is preparing to drill its first exploration well Temash #2, the first well since the 70ís in onshore southern Belize. Perenco Belize Ltd. is currently acquiring 2D seismic and reprocessing old seismic over its acreages with the aim of identifying drillable structures. Other companies are evaluating acquired data and moving along with their exploration program. Belize Natural Energy Ltd. is constantly working on improving recovery rates for the Spanish Lookout and Never Delay Oil Fields.

With over 60 years of exploration, Belize remains attractive. As more data is being acquired, the understanding of the geology of the country becomes better. Since the 1970s, the so-called poor data era, southern Belize and the offshore areas have remained relatively unexplored. These areas are clustered with active oil seepages, indicating the presence of an active petroleum system(s). It has been proven that even in areas with extended exploration history it is not uncommon to make new discoveries.

The Guardian