Office of the Prime Minister

Press Briefing - Cabinet Meeting of April 18, 2006

Belmopan - 19 April, 2006.

Cabinet met in regular session on Tuesday, April 18, 2006. The following information arising from Cabinet’s deliberations are presented for public information:

Cabinet today approved a strategy for future petroleum exploration in Belize and set up a three person Cabinet committee to guide Government’s policy decisions with regard to the petroleum industry, including advising on an appropriate tax regime. The committee consists of Natural Resources Minister John Briceno, Attorney General Francis Fonseca, and Foreign Trade Minister Eamon Courtenay.

The strategy was proposed by the Geology and Petroleum Department following expert advice and later reviewed by the Petroleum Advisory Board. It is aimed at getting the maximum royalty and production sharing rates for the Government in new contracts to maximize revenues for the Government, at the same time keeping interest in Belize and attracting exploration companies to the country.

The Committee was directed to take into account Government’s decision to strengthen the Geology and Petroleum Department, as well as the use of proceeds from oil revenue and the availability of public participation in the industry through the purchase of shares.

Cabinet also agreed to exercise Government’s option to acquire a 10% working interest in Belize Natural Energy. Cabinet expects to consider draft legislation on the petroleum industry for presentation to the House of Representatives at an early date.

Cabinet has expressed its support for internal and external initiatives aimed at maintaining the sugar industry as a major contributor to economic growth and stability in the face of the EU sugar regime which comes into effect on 1st July 2006 which will reduce the price of sugar.

The initiatives focus on reforming the industry’s practices to meet the price and supply forecasts of the market in the short and medium term and at the same time to ensure that the industry’s contribution to economic growth and foreign exchange earnings should be sustained.

The full cost for implementation of the Sugar Adaptation Strategy is estimated at BZ$280 million dollars and includes cost estimates for proposed activities to be implemented over a 10-year period, from 2006 to 2015 to achieve the main strategic objectives. Approximately BZ$264 million will be spent during the first and second phase (2006 to 2010) to place the industry on an internationally competitive and sustainable footing by 2010.

Approximately BZ$123.2 million dollars (44%) of the total resources required is to be obtained from internal sources, and BZ$157.6 million (56%) externally. The bulk of the local resources (42%) or (BZ$117 million) will be provided by Belize Sugar Industries Limited; with the remainder contributed by the farmers and Government. The European Union is expected to provide 39.5% (BZ$110.08 million). This contribution includes financing a major part of the investments for improving the efficiency of the sugar industry, agricultural diversification and socio-economic interventions.

Cabinet also directed the Ministry of Foreign Trade to take the lead in developing a coordinated effort with the Ministries of Agriculture and National Development with regard to securing market access and financial assistance for Belize’s other export industries, such as sugar and citrus.

The next Cabinet meeting is scheduled for Tuesday, May 2, 2006.

For further information contact:

ROBERT LESLIE
Cabinet Secretary

April 18, 2006.