Petrocaribe: Members of Petrocaribe wave during fifth summit
Venezuela rejigs oil supply pact terms
Member countries of Petrocaribe, the Caribbean energy integration organisation that Venezuela began in 2005, agreed to adjust the terms of financing for the purchase of Venezuelan oil in order to lower the impact of soaring oil prices on Caribbean countries.
Venezuelan President Hugo Chavez said that as long as Venezuelan oil costs $100 per barrel or more, Petrocaribe members will pay only 40% of their oil imports from Venezuela within 90 days, instead of 50%, as agreed upon previously.
The remaining 60% would be paid over 25 years at a fixed interest rate of 1%, in accordance with changes ratified Sunday during the Fifth Petrocaribe Summit held in Maracaibo, Venezuela.
If the price of Venezuelan oil surpasses $200 per barrel, member countries will pay 30% within 90 days, and 70% over 25 years, said the Associated Press.
Petrocaribe countries have received a total of 58.9 million barrels of Venezuelan oil, about 56,000 barrels per day.
Chavez encouraged countries to pay part of their debt in “goods and services,” assuring that “a distinct market will be born in Petrocaribe” which creates “opportunities for integral development.”
Chavez also proposed that Petrocaribe nations create mixed enterprises with the Venezuelan state oil company PDVSA to extract oil from the Orinoco Oil Belt. This way, each country in Petrocaribe would produce its own oil supply, strengthen its economy, and be less affected by the soaring oil prices, Chavez explained.
So far, Petrocaribe participants have constituted 8 mixed enterprises to make joint investments in oil refining and distribution in the region, according to Venezuela’s Energy and Petroleum Minister, Rafael Ramirez.
Petrocaribe nations also agreed to start a special fund in the Bank of ALBA (Bolivarian Alternative for the Americas), to boost food production and combat food shortages. ALBA is another regional integration initiative based on cooperative, fair trade principles as an alternative to global capitalism, whose members are Venezuela, Cuba, Nicaragua, and Bolivia, said Venezuela Analysis newspaper.
Venezuelan opposition leaders have criticised Petrocaribe and ALBA for being examples of the “diplomacy of bribery,” and accused the Chavez administration of attempting to buy support for the Venezuelan government.
Petrocaribe is now composed of 18 Caribbean countries, including Guatemala, which joined the group Sunday. Costa Rica, which is still considering membership, sent a representative to observe the summit.
Venezuela is also currently discussing plans to build an oil pipeline through Suriname and Guyana, and President Chavez discussed the construction of a transnational railway with Colombian President Alvaro Uribe during their meeting last Friday.