It wasn’t me, protests Johnnny B!
Posted: 19/10/2007 - 11:58 AM
Author: Kalilah Enriquez
Yesterday afternoon UDP Opposition Leader, Hon. Dean Barrow, released information about a pair of oil deals that appear to be very favorable to two PUP-linked businessmen, and very unfavorable to the government and people of Belize.
In a press conference at the Radisson Fort George Hotel, Barrow revealed the terms of two production sharing agreements, PSA’s, for Blocks 15 and 16 in the Mountain Pine Ridge. The PSA’s are for two companies, ZMT and BCH, which are registered to Antonio Zabaneh and Mike Dunker, both businessmen of Independence Village. Zabaneh is husband of Speaker of the House, Elizabeth Usher Zabaneh.
Under the agreement with ZMT/BCH signed on July 24 of this year, the Government of Belize would get a maximum 15-percent take of the revenues from oil found in the area. But according to documents that Barrow produced, a competing company, Lagoon Resources Limited based in the US, was offering GOB up to a maximum 40-percent take.
In fact, Lagoon feels it was cheated out of the opportunity to convert its Exclusive Seismic Option (ESO) into a Production Sharing Agreement, and says so in a letter to Prime Minister Said Musa dated June 25, 2007, the day after the ZMT/BCH agreements were signed.
According to former Minister of Natural Resources and the Environment, Hon. John Briceño, Lagoon’s ESO was for the period 2005 to 2007. ZMT/BCH entered the picture when Lagoon’s ESO expired at the beginning of this year. Briceño says ZMT, BCH and Lagoon all made bids to enter into PSAs with the government, and up to the time that he was Natural Resources Minister, the ZMT/BCH bid was the better deal.
“The recommendation that we made to the Cabinet [on May 24, 2007] shows that ZMT made an offer of the first 5,000 barrels, 20%, 5-10,000 barrels, 25%, etc., which was better than what Lagoon Resources offered,” explained Briceño.
In a copy of the Lagoon application, which Opposition Leader Barrow produced yesterday, the US-based company was offering government a 15% take on the first 5000 barrels, topping out at 40% for anything over 40,000 barrels.
But what ended up being signed on July 24 did not come close to any of those offers. In fact, in the final Production Sharing Agreement with ZMT/BCH, 15% is the maximum, not the minimum, take that the government and people of Belize will get. The PSA starts out at a mere 1.5% for the first 25,000 barrels, and does not climb to 15% until the company has extracted 225,000 barrels. (For comparison, up to November of last year BNE had extracted and sold just over 800,000 barrels of oil, according to a report from the Ministry of Natural Resources).
So what changed? When and why did the ZMT/BCH offer shrink from a minimum of 20% to a maximum of 15%?
At press time Amandala was unable to reach any of the primaries of ZMT/BCH or the current Minister of Natural Resources, Hon. Florencio Marin, for comment.
But the previous Natural Resources Minister, Johnny Briceño, says he does not know what happened, and that he was absent from a Cabinet meeting on June 5 when the matter was discussed. The meeting came a day after Prime Minister Said Musa reshuffled Cabinet, stripping Briceño of the Natural Resources Ministry and giving it to Florencio Marin, Sr. Briceño says that he did see the minutes of the June 5 meeting, but that there were no details of the PSA, and so he was unaware that the terms had been changed.
“The recommendations that we made on the Cabinet paper that was discussed on June 5th, it clearly showed that ZMT had made a better offer than Lagoon Resources Ltd. I am now told that a PSA was signed around the 25th of July, and I need to point out that I was no longer the Minister, so I don’t know what transpired after the 4th of June…. I saw that the terms of that contract that was presented yesterday were different from the recommendation that I made,” said Briceño.
Asked what could possibly explain the change in recommendations, Briceño said he did not want to speculate, but if it were up to him he would not have made that change in recommendations.
“ZMT and BCH are two Belizean companies. Obviously you want a Belizean company to get it before a foreigner, and I have no apologies for that, but they also have to come with something reasonable. We just can’t give it away. In July of last year Cabinet was approached for a production sharing agreement with BCH, but we didn’t sign anything because we were working with the Commonwealth Secretariat to come up with a new model, and that is why it wasn’t signed, and right after I left it was signed,” said Briceño.
Briceño denied allegations that he fully or partly owned the Dunker Group of Companies, which includes ZMT/BCH, or that he has any affiliation with the group.
A government press release issued today says the ZMT/BCH agreements were based on “the authorized model that was then in existence”. The release says the Lagoon company’s permit had expired, and so the exploration blocks were issued to the other two companies. The GOB release does NOT mention the terms of either of the offers, nor does it mention anything about the terms of the ZMT/BCH contract being amended, as Briceño says.
On August 28, 2007, Cabinet approved a new PSA model, based on advice from the Commonwealth Secretariat. The seven PSA’s signed at the Corozal Free Zone on Friday, October 12, 2007 are subject to the terms of the new model. Those new PSA’s were signed between GOB and Princess Petroleum Ltd., Miles Tropical Energy, Belgeo Ltd., Providence Energy Ltd., SOL Oil Ltd., Blue Creek Exploration Ltd. and PetroBelize Ltd.
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