Landowners want more petroleum rights and better royalties
Posted: 14/09/2007 - 10:53 AM
Author: Adele Ramos
A group of private landowners from across Belize—including the Mennonites of Spanish Lookout, the first commercial oil-producing field in the country—are teaming up to renegotiate petroleum rights and royalty payments with the Government of Belize, because they say that property-owners, who are the most impacted by oil exploration activities, are not being treated fairly.
To date, the only group that has publicly challenged the Government on petroleum land rights is the Maya of Toledo. This recent initiative includes big-name landowners such as businessman Barry Bowen and former Agriculture and Fisheries Minister Dan Silva. The landowners, who together hold 2.5 million acres of property, say that they want fair and reasonable royalty treatment.
A central issue being raised by the landowners is whether oil companies should have unfettered access to their private lands. Another issue is how oil revenues—much of which are kept outside Belize—are being shared with locals.
Spanish Lookout petroleum board chairman Allen Reimer told Amandala today that even though oil exploration and production have been ongoing for almost two years, the Mennonite community in that village has not received a penny in royalties. What Government has offered them is far less than they believe they are legally entitled to, and too little to make landowners happy, he added.
Reimer said that while the Government can clearly license out fields for mineral exploration below the earth’s surface, there is the question of whether they can guarantee a foreign company, which will take all their profits out of the country, ingress and egress in the surface lands that are private lands.
He pointed to the case of a Georgeville resident who had to let Belize Natural Energy on his property after the Minister of Natural Resources issued an order to him. (The Minister reportedly gave BNE access to 600 acres of his property for two years without any compensation.)
“Have not the constitutional rights of this man been violated?” Reimer questioned.
He told us that the Mennonites were first told that oil exploration would cause them no disturbances and inconveniences, but over the last 18 to 20 months they found out that this is not true, and some families who lived near a well have even had to be relocated.
The Mennonites and other concerned landowners, including a representative of the Toledo Maya, met in early July and later that month had a face-to-face meeting with Prime Minister Said Musa to discuss their issues.
The Spanish Lookout community has been working with consultant geologist, Jim Cavanaugh, who told us that landowners currently have “no choice” when it comes to oil exploration activities on their property, but he believes that this is a violation of the constitutional rights of landowners, who should have a say in the matter.
Cavanaugh said that by international standards, landowners should be paid 5% of the value of oil produced at the wells, but there is a bigger problem—there is no measuring device to determine how much this really is, he added.
According to Cavanaugh, the community has expressed concerns that there has not been proper accounting of exactly how much oil has been removed from Spanish Lookout and exported from Belize, indicating that they will never truly know how much money they are to be paid in royalties from oil sales.
He said that under the existing formula that the Government uses, all landowners are only entitled to 37.5 cents for every $100 earned from oil (based on a 5% cut of Government’s 7.5% royalty earnings from oil), but in April the Government offered them only 9 cents for every $100 earned—which they rejected.
Financial Secretary Joe Waight informed us today that Government’s projected earnings from petroleum for 2006 are roughly $25 million - $20 million in tax earnings for 06 to 08, and another $5 million in royalties. This should net the Mennonite community roughly quarter-million-dollars (or $250,000) in royalties.
The initial Government earnings would go directly into the Government’s Consolidated Revenue Fund and not into the recently approved Petroleum Revenue Management Fund, because the structuring of the new fund will take at least until the end of the year to finalize, said Waight.
He told us that he could not say how much the Government has earned in royalties to date, but referred us to the Director of Geology and Petroleum, Andre Cho, whom we were unable to reach for comment.
By law, all naturally existing petroleum resources belong to the Government of Belize; however, production sharing agreements allow for oil revenues to be shared among oil companies, the Government and, to a much lesser extent, landowners.
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