Jamaica and Venezuela Sign Oil Deal

JIS – The Jamaican and Venezuelan governments have signed an energy cooperation agreement under the Venezuelan PetroCaribe Initiative, for the supply of 21,000 barrels of crude oil per day to the Petrojam Refinery.

Prime Minister P. J. Patterson and Venezuelan President Hugo Chavez signed the relevant documents at the Ritz Carlton Hotel in Rose Hall on Wednesday, August 23 after a series of bilateral talks, which continued late into the night.

The Prime Minister, who spoke to journalists at about 1:00 a.m., said that Jamaica was pleased with “the distinction and honor of being the first signatory to a bilateral agreement under the PetroCaribe Agreement.”

He noted, that with oil prices now in the vicinity of $65 to $67 per barrel, Jamaica stood to benefit by way of a $40 loan for each barrel purchased at a one per cent interest rate, in addition to a two-year grace period with a 25-year payment period.

The Prime Minister however pointed out, that the supply of 21,000 barrels of crude per day under the facility would still require Jamaica to purchase refined products to supply its market demands and the country would continue to purchase from Trinidad and Tobago.

Yesterday’s signing was the fruition of agreements under the Memorandum of Understanding (MoU) between the Venezuelan state-owned oil company, PDVSA and the Petroleum Corporation of Jamaica (PCJ), for the upgrading and expansion of Petrojam.

Under the MoU, which was signed at the Heads of Government energy meeting held at Puerto la Cruz, Venezuela in June, PDVSA has agreed to provide personnel in September for the preparation of the design basis memoranda and tender documents for the basic engineering to Petrojam to enable construction to commence in late 2006.

The upgrade will expand the capacity of the refinery by about 42 per cent to 50,000 barrels per day and through the introduction of new processing technology, increase the proportion of higher quality fuel produced from the crude supplies. PCJ and PDVSA are to be 50/50 partners in the US$500 million expansion of the oil refinery.

Prime Minister Patterson said he was of the opinion that “this model of PDVSA involvement will be carried forward with appropriate modifications as necessary to certain Eastern Caribbean Countries.”

In the meantime, he said discussions between the delegations also focused on the potential for expanding the tourism markets of both countries, which would require, among other things, a review of air links between Venezuela and Jamaica.

Prime Minister Patterson said the decision had also been taken to exchange experience with Venezuela in the fields of marketing and training. With respect to training, he disclosed that an exchange program was to be put in place for hospitality training at the Runaway Bay HEART Academy on a yearly basis.

Furthermore, he said the program would be extended to hotels to provide practical experience for the workforce, and additional space would be made available at the University of Technology for tertiary level training.

Prime Minister Patterson said that disaster mitigation was also of shared concern and a collaborative program would be undertaken in this area. He said it was also the intention of the Jamaican government to use some of the funds that will be made available through loans under the PetroCaribe program, for watershed improvement, among other areas.

President Chavez, in his remarks, noted that the PetroCaribe initiative was designed to provide support for countries, which were vulnerable and in need. He said the assistance would see some 200,000 barrels of oil being supplied daily to various countries including Cuba, Jamaica, the Dominican Republic and Guyana.

He pointed out that the provisions under the initiative would mark the fulfillment of the vision of South American Liberator Simon Bolivar to “create in this part of the world, a single nation, a strong nation, that will reestablish the balance with the older parts of the world”.

The Venezuelan President noted that Jamaica had played an important role in the institution of PetroCaribe, citing Prime Minister Patterson’s dedication to the regional integration process among other things as driving factors.

Furthermore, he said the initiative had allowed for the strengthening of relations between both countries in the areas of tourism, trade, infrastructure as well as education, energy and development on a whole.

PetroCaribe is intended to benefit the Caribbean region through lower energy costs as well as the development of supply infrastructure, joint refining and coordination of hydrocarbon supply and distribution.

Participating CARICOM countries are expected to design acceptable cooperation schemes that would return value to the Venezuelans for the support being provided under PetroCaribe. These include provisions for language training and tourism at different levels as well as sports development.

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