OGJ Oil Diplomacy Editor
LOS ANGELES, May 3--Treaty Energy Corp., Houston, entered a 50:50 joint venture agreement with Princess Petroleum Ltd., a Belize firm engaged in exploring, developing, and producing crude and natural gas.
This follows earlier reports Northern Spirit Resources Inc., Calgary, entered two production sharing agreements (PSA) with the government of Belize.
Princess Petroleum is part of the Princess Group International, which is engaged in the development of hotels, casinos, and other real estate ventures throughout South America, the Caribbean, and Europe.
Princess received one of 17 concessions from the government of Belize to explore for oil and gas, and as part of the joint venture will have exploration rights on 2 million acres, of which 1.8 million acres are offshore.
As part of its due diligence, Treaty said it completed a satellite survey of the entire concession and is targeting a 10,000-acre area in the south central part of Belize to spud its first well. The site is off the southern highway, which Treaty said provides “quick access to ports in Punta Gorda and Belize City.”
Treaty engaged a geoscientist to go to Belize this month for soil samples and other studies to select the first well site. Treaty plans to spud its first well no later than July 1.
The Northern Spirit Resources venture is for an initial term of 2 years with three successive renewals of 2 years each and relinquishment of 25% of the original contract area at the end of each 2-year period.
One of the two PSAs is comprised of 16 blocks covering 128,000 acres in northwest Belize near the borders with Guatemala and Mexico. The other PSA is comprised of 12 blocks in north-central and mid-western Belize.
Northern Spirit Resources is required under the agreement to spend $150,000 total for mapping and geochemical surveys; $400,000 to acquire, process, and interpret 30 km of 2D seismic; and $2.3 million to drill the first exploration well.
Subsequently, it would spend $500,000 each to shoot and interpret two additional 3D seismic surveys covering 12 sq km each. Another $2.3 million is to be spent to drill a second exploration well, while the cost of the third exploration well would increase to $2.6 million.
According to analyst IHS Global Insight, Belize is currently dependent on imports to meet its oil needs, but a discovery by Belize Natural Energy Ltd. and its partner Aspect Energy in 2005 raised hopes the country eventually may produce enough oil to cover domestic consumption.
Contact Eric Watkins at firstname.lastname@example.org.
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