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And keeping it with the Ministry of Energy, Science and Public Utilities, last night at 7:15, as Prime Minister Dean Barrow wound up the budget debate, he announced that a major oil find had been confirmed by the Oil company Marenco in Northern Belize.  And while it is good news, the PM stressed that the oil is under impermeable rock, and it is not a commercial find at this time:

Hon. Dean Barrow - Prime Minister of Belize
"Let me report that yesterday, just yesterday, Marenco completed the drilling and testing of the sub-canal bank well number 3 in Gallon Jug. As a result, they are now able to confirm that there is oil from a depth of 4009 to 4026 feet. The accumulation is between 2,500 and 3,500 acres in extent with a minimum of 50 million barrels of oil." 

The PM added that enhanced recovery operations requiring significant capital and international expertise will be required to commercialize the find.

Today CEO Colin Young elaborated on the specifics of the oil field.

Dr. Collin Young - CEO, Ministry of Energy Science and Technology, and Public Utilities
"They obtained some recent results from the second appraisal well they dug in their concession area, South Canal Bank #3. Based on the information that we've received, they estimate that the area would cover about 2,500 to 3,000 acres, and that it potentially can hold up to as much as 50 million barrels of oil. However, I need to be quite clear that estimates of oil in the ground is different from oil that is recoverable, it is not a one to one ratio. You can have a case where, as I said, the amount of oil can be high in the ground, but the amount that you can actually get out can be very low, to the point where if it's too low, then it's not commercial oil." 

A good illustration of why the Number of barrels is not a good measure of the quality of the oil field: Spanish Lookout, is a 21 million barrel oil field, and it yielded 1200 barrels per day, while Never Delay is a larger oil field but only yields 18 barrels per day.

Channel 7

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Maranco confirms possible reserve of fifty million barrels of oil in South Canal Bank

Colin Young

Almost one year ago, on March thirtieth 2013, Maranco Energy Belize Limited announced that it had found an encouraging oil show at its South Canal Bank number one exploration well. That never panned out, but tonight there is confirmation that Maranco has struck oil, black gold, after digging a second appraisal well as South Canal Bank number three. Initial estimates put the reserves at close to fifty million barrels of oil�more than double the initial reserves at the Spanish Lookout Belize Natural Energy well. That is a monumental discovery, but don't be playing Jed Clampett, packing up the family and moving to Beverly Hills just yet. The oil is in the ground, yes�but getting it out is a whole different matter. Today, News Five spoke to C.E.O. in the Ministry of Energy, Colin Young. He told us that until the oil is in their hands, so to speak, they can't even classify it as a commercial find.

Colin Young, C.E.O., Ministry of Energy

"What we do know is that the area has oil and potentially significant amount of oil. But we want to ensure that the public understands that oil in the ground is very different from oil that you can extract from the ground. The extraction of oil from the ground is dependent on two primary features of the whack in which it is found. The first is the porosity�porosity is the amount of oil that the whack can hold. So if you imagine a house, the room in the house is the porosity; the amount of oil can be held in that room. The other factor is the permeability. That now refers to the amount of windows and doors that this room would have-in the cases of the whacks, the whack spaces-the oil can seep through to be extracted. So in the case of Maranco, what we know is that it is a high porosity; meaning potentially millions of gallons of oil. But we do know that the permeability is very, very low. And so now the issue is the cost. How much will it cost to actually extract the oil? So at this point, the Geology and Petroleum Department and the Ministry and the Government are unable to determine whether this find is commercial or not. They will actually now embark on a number of stimulation enhancement techniques that will allow us to determine how much they can take out and then that of course is what everybody wants to know."

Young says the company is currently looking for strategic investors, because it will be almost prohibitively expensive to get the oil out the ground. To give you an idea of the difficulties ahead - the oil found at Spanish Lookout had an API of thirty-eight; forty. The oil found at South Canal Bank number three has an API of sixteen�.the higher the number, the lighter the oil, the easier it flows and the better the quality.

Channel 5

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Oil found in Northern Belize! But how to extract 50 million barrels of thick crude !

He said that because of the complexity of the rock formation in the area, Maranco Energy Belize Limited will not be able to determine its commercial value without further testing and without financial and technical assistance from abroad.

Barrow, speaking at the end of the National Budget Debate, said that the company reported the test results of South Canal Bank #3 exploration well on Monday.

He added that the test results determined that the oil is located at between 4009 and 4026 feet deep under the surface, with a size of between 2500 to 3500 acres.

Chief Executive Officer in the Ministry of Energy, Dr. Colin Young, explained that Maranco cannot determine if the find has commercial value without testing exactly how much oil the rocks can hold (porosity), and the space available between the rocks for the oil to pass through (permeability).

"I want to be very clear. Oil in the ground does not [automatically] translate to recoverable oil," Young stressed.

He added that commerciality is not a matter of how many millions of barrels exist, but rather if the rock formation would allow for extraction without it being too expensive.

The oil quality, Young explained, has API (American Petroleum Industry) gravity of 16, which means that the oil is thick and heavy, making it more difficult to extract. This is in contrast with the oil found in Belize Natural Energy's Spanish lookout fields which had an API gravity of 32, referred to as light sweet crude.

If Maranco's find is commercial it will be the first company to strike oil since BNE struck oil in 2005. BNE also struck oil in 2007 at its well in Never Delay.

The find would aid Belize's ailing oil industry which has been in steady decline for the past several years according to the Statistical Institute of Belize.

SIB's 2013 report showed that crude oil production fell by as much as 23 percent when compared to 2012.

Crude oil is Belize's largest export product, representing some 27 percent of domestic exports, seconded by citrus which represents 20 percent.

The data also showed a drop in annual oil production from 1.6 million barrels in 2009, to 792,000 in 2013.

Of the six oil companies with oil concessions in Belize two are currently inactive. The other companies are all planning seismic-testing activity, scheduled for various times throughout the year.

BNE's production sharing agreement was never renewed and its concession area was given over to Pacific Rubialis.

The Reporter

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