BELIZE OIL BUSINESS REVENUE SHARING DEBATE !

** Installing oil rig at Spanish Lookout oil field by BNE.


OIL ARTICLE IN THE GUARDIAN NEWSPAPER THIS WEEK, OWNED BY THE PRIME MINISTER.

OIL REVENUES TO THE BELIZE GOVERNMENT SHORT CHANGED!

We are not blaming the oil company BNE for the fiasco in our nation getting an insufficient share of gross oil revenues. Using a local rural setup used for local small speculative risky business, we normally off the cuff, divide such earnings in thirds. One third for the owner ( in this case the government on behalf of citizens ), one third for operations, exploration and re-investment and upkeep, one third for the investors - owners who took the risk, to do with as they wish, either as dividends, or anything else.
Using that simplistic model of revenue sharing, when we look at how the PUP of the past administration set up the government share of oil revenues, using the advice of outside oil expert accountants, we can see where things have gone wrong.
According to the Prime Minister in his newspaper, the UDP party rag, he explains that income tax brings in around $40 million and then there is a lesser amount of 7.5% for royalties. Which the government offers an infintismal, unfair, small slice to property owners for usurpation of their land and below surface resources. At any rate, from the article in the Guardian newspaper we can see the government earned $47 million off $600 million Bz. of the gross total oil sales.
Oil sales so far, are touted at $300 million (usa) in round number figures. The take for our country should have been 35% or so of that; or roughly $100 million (usa) ( $200 million Bz ), using our local risk taking business model. No matter how they design the breakdown in more fancy terms. What we got is $47 million so far from gross oil sales according to the Prime Minister. So there is a shortfall of expected revenue returns of $53 million ( usa ).
Accountants are auditing the BNE oil company, but it does look like the oil revenue sharing agreement needs adjusting? Seeing how the company discovered oil and was the first to do so. I think they should get to keep whatever they have right now, but from January 2010 onwards, we the citizens of the nation of Belize should get 35% of GROSS foreign sold, oil revenues. Such foreign currency should go into our FOREIGN RESERVES and only brought in as needed. In the next 19 years, the FOREIGN RESERVES need to be increased as savings to $4 billion, from the couple hundred million currently in there. Just to pay our debts, not counting the cost of building our nation in a safe and solid conservative manner.