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JAMAICA to get out of PetroCaribe?

Featured Prime Minister Andrew Holness and United States Secretary of State Rex Tillerson at Jamaica House, Kingston Prime Minister Andrew Holness and United States Secretary of State Rex Tillerson at Jamaica House, Kingston
KINGSTON,  February 8, 2018 - Jamaica's Prime Minister Andrew Holness seems to have bought into an assurance from US Secretary of State Rex Tillerson yesterday that Washington would assist the Government in overcoming any fallout arising from giving its support to the United States which has threatened to inflict possible sanctions against the Venezuelan oil industry.

Tillerson, who was speaking at a press conference following a meeting with Jamaica's Prime Minister Andrew Holness  at Jamaica House, said that the US Administration is about to undertake a study to identify areas of cooperation which are more easily accessible, including energy.

“We are going to undertake a very quick study to see if there are some things the United States could easily do with our rich energy endowment, with infrastructure we already have available to see what we can do to ease the impact of it,” Tillerson said as he spoke at a joint  m edia briefing at Jamaica House.

Asked whether  Jamaica was willing and able to stop importing Venezuelan oil, Holness took the opportunity to unceremoniously throw Venezuela "under the bus," indicating that it was Jamaica's intention to severely reduce, or even end its long standing arrangements with Venezuela which had literally bailed out Jamaica's economy when times were rough, and establish new links with the United States to fill the void.

Holness stated that Jamaica could benefit from the US becoming a net exporter of energy, if its remaining energy ties with Venezuela are cut by its stance against Maduro's Government.

“This has always been Jamaica's position. It is a not a new position. Jamaica wants to see the people of Venezuela being able to enjoy their democracy and this is a principle that has nothing to do with any other country. We wish the best for the people of Venezuela,” the prime minister said.

Holness also noted that Jamaica does not currently import oil from Venezuela. However, Venezuela still owns 49 per cent of Jamaica's only oil refinery, Petrojam.

“With the new dynamics in the global energy trade and with the United States becoming a net exporter of energy resources, Jamaica can, in this paradigm, benefit from it,” Holness said.

Tillerson pointed out that the Caribbean region was important to the United States, as it is considered its “third border”.

“Jamaica has the largest stretch of that third border with the United States, which is very important to future economic opportunities, as well,” the US diplomat said.

He added that the United States sees many opportunities for future cooperation with Jamaica in trade, strengthening security and combatting trans-national criminal operations.

“That's why we are really excited about Jamaica assuming the chairmanship of Caricom, and that's one of the reasons why I really wanted to meet with him (Holness) today,” Tillerson admitted.

However, he said that his visit was not limited to bilateral arrangements between Jamaica and the United States but would involve all regional countries.

Tillerson also admitted that the US Administration had not yet adopted a new policy for the region, but insisted that the US was positive about the region.

“I think there is great unanimity in the PetroCariberegion, and certainly in the hemisphere, that we all want to see some progress on the situation in Venezuela, which only gets worse every day,” he added.

Tillerson, former Exxon Oil CEO, was concluding a six-day whirlwind tour of the Latin American and Caribbean region during which he visited Argentina, Colombia, Mexico and Peru, in an effort to sell the US Plan to increase economic sanctions against Venezuela, the world's third largest oil producer, and reduce the effects of the eventual fall-out.

Jamaica as well as a number of  countries in the Caribbean had forged a special relationship with Venezuela under the PetroCaribe arrangement, where oil is purchased from Venezuela on preferential payment conditions. 

The agreement, which began in 2005, allows beneficiary nations to buy oil at market value but only pay a percentage of the cost up front. The balance can be paid over 25 years at 1% interest.

Countries under PetroCaribe are required to pay 40% of their oil bill within 90 days. The remainder can be paid over the next 25 years at a fixed interest rate of 1% as long as oil prices exceed US$100 per barrel.

Seventy per cent of payments may be deferred if oil reaches US$150 a barrel.

Beneficiary nations are allowed to purchase 185,000 barrels of oil per day on these terms. Additionally, these nations could settle their debt to Venezuela using goods and services.

The countries that are signatories to this agreement are: Antigua and Barbuda, the Bahamas, Belize, Cuba, Dominica, the Dominican Republic, Grenada, Guyana, Jamaica, Nicaragua, Suriname, St Lucia, St Kitts and Nevis, and Saint Vincent and the Grenadines. Cuba, the Dominican Republic, Haiti, Honduras.

  • Countries: Jamaica

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