It’s time to ‘feel di oil”

“Clearly the populace, the electorate, wants to be certain that this country will get the full benefit of the oil industry; we’ll get (to the last penny), (our) just desserts.” Dean Barrow 2007

“The oil belongs to each and everyone of us and we deserve to receive the benefit of this industry by ensuring local participation, grassroots participation.” Hon. John Saldiver UDP manifesto launch 2008

“I have no-absolutely no- intention in the current circumstances of unilaterally breaking contractually arrangements that govern the BNE situation…” Prime Minster Barrow February 2010.

The Prime Minister of Belize has become the ultimate flip flopper!

Belizeans can all remember that as Opposition Leader Mr. Barrow constantly attacked the PUP government for what he called a one-sided agreement that was signed with BNE, the only oil producing company in Belize.

In the 1998 PUP manifesto, the PUP declared that if there was oil in Belize: “we would find it.”  After 50 years of searching and digging dry wells, Belize discovered its first commercially viable oil field in 2005 during a PUP administration.

It is only after this discovery that Belizeans started to pay closer attention to our infant oil industry. Many questions were asked including: whether the government was prepared to mange this new industry? Does the foreign company now “own our” oil? How will Belizeans benefit?

As a government we realized that there were many things we had to do if the industry would benefit Belizeans today and in the future.   This is why we brought in experts from all over the world to advise us, to review and update legislation and strengthen the petroleum department.

Among the many things, we found out that in 1998, was the fact that the previous UDP government erroneously amended the income tax law and as such allowed oil companies to pay business tax at 1.5 percent of gross revenues or pay a 25 percent income tax on net profits. After many discussions, objections and screaming from the oil companies, the PUP government at the time amended the income tax law to tax oil companies at 40 percent.

Despite all our efforts, Mr. Barrow was the head cheer leader in the chant that Belizeans needed to get a bigger share of the oil revenues. He went so far as to claim that when elected, the UDP government would nationalize the oil company and make shares available to Belizeans.

Of course that was then and this is now.  Once Mr. Barrow became the Prime Minster, he started to sing a different tune! He introduced a windfall tax on BNE and set the threshold at $US90.00 per barrel. All the experts, including Mr. Louis the Petroleum Financial expert from Trinidad and Tobago, advised him that the threshold was set too high, but he refused to listen. One year latter he announced that not a single red cent was collect from this tax, he said: “the much vaunted windfall tax never materialized, but ‘sic transit gloria.’”

During Wednesday’s press conference, the Prime Minster once again reiterated that he would not touch the BNE agreement.  All of a sudden, the Prime Minister has to respect the contracts that were signed, something he had a problem in doing with BTL.

While the Prime Minister should be recognized for respecting the contract, he can also show a serious commitment to ensuring that Belizean get their fair share by considering the following:

1)  The Prime Minster should reduce the windfall tax from $US90.00 per barrel to $US60.00 per barrel.

2)  Introduce the Resource Rent Tax that would allow BNE to earn reasonable profits and the extra profits would be share with between BNE and the Belizean people.

3)  Conduct an in-depth audit into BNE ‘s financial statements to ensure that expenses are not being over inflated in efforts to reduce revenues paid to Belize.

At Wednesday’s press conference, the Prime Minister asked for “patience and understanding”. After two years at the helm of government, the Belizean peoples’ patience and understanding is running thin.  The Prime Minister must stop his flip-flopping and ensure that we get our just share of the oil revenues.

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