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| Venezuela's President Hugo Chavez, who revealed the changes in financial terms of the agreement at the Fifth Extraordinary PetroCaribe Summit held in the western city of Maracaibo, also said that if the cost of oil goes beyond USD$200 a barrel, PetroCaribe members will only pay 30 per cent of their bills within 90 days and the other 70 per cent will be paid under new long terms conditions. The price of oil is now around US$137 a barrel. | |
MARACAIBO, Venezuela, July 16, 2008 - Venezuela's President Hugo Chavez has announced changes to the terms of his PetroCaribe initiative that will see participating countries paying 40 per cent of their bill for oil purchased under the agreement within 90 days, instead of the current 50 per cent, when global oil prices surpass US$100.
The initiative, which provides participating countries with oil on preferential terms, will see the remainder being paid in 25 years at a one per cent annual interest rate. As currently stands, countries will be able to pay off some of their debt with services or goods such as crops, materials and tourism.
Mr Chavez, who revealed the changes in financial terms of the agreement at the Fifth Extraordinary PetroCaribe Summit held in the western city of Maracaibo, also said that if the cost of oil goes beyond USD$200 a barrel, PetroCaribe members will only pay 30 per cent of their bills within 90 days and the other 70 per cent will be paid under new long terms conditions. The price of oil is now around US$137 a barrel.
Representatives from 15 Caribbean and Central American countries, including 11 leaders, attended the conference at which Guatemala became PetroCaribe's 18th member.
The Summit also considered an appeal by St Vincent and the Grenadines and Jamaica regarding the cost of fertiliser and the negative impact the increasing price has had on the agricultural sector and efforts to improve food security.
"Critical ingredients in the mix of fertilizers, such as urea, are petro-based and the cost has increased as the price of oil has moved," Jamaica's Prime Minister Bruce Golding said as he reported on the outcome of the summit.
"Earlier representation by the Ministry of Agriculture had resulted in an undertaking by the Venezuelan state-owned company, Petroquimica, to provide a five per cent discount on the price of urea. However, based on the submissions made at the Summit, the government of Venezuela has agreed to make available to PetroCaribe member states 100,000 tons of urea per annum at a discount of 40 per cent of prevailing market price.
"This discount will provide a significant reduction in the cost of inputs to the local manufacturer," he added, noting that Jamaica currently imports 10,000 tons of urea annually.
Another initiative arising from the Summit was the decision by President Chavez to establish a fund to support PetroCaribe member countries in expanding agricultural production and improving food security.
"President Chavez has decided to contribute to the fund US$0.50 for every barrel of oil exported. This is estimated to amount to US$760 million per year," Mr Golding said.
A special meeting of Agricultural Ministers will be held in Honduras on July 30 to work out the details of how these funds will be allocated.
The Jamaica Prime Minister also revealed that his country would contribute US$5 million to the ALBA PetroCaribe Fund which was set up to finance development projects in member countries with special emphasis on poverty reduction.
"This amount will be paid from profits realised from the investments made by our own PetroCaribe Fund," he explained.
Venezuela started the Fund with a contribution of US$50 million and urged other member countries to make voluntary contributions to expand it but, to date, no other country has made any contribution.
"We believe we have an obligation to make our contribution to the Fund. It is not fair to the Venezuelan Government for us to be going constantly hat in hand without reciprocating the goodwill shown by Venezuela by making our contribution to the Fund," Golding said.
Venezuela sends around 200,000 barrels of oil a day under the agreement.
The Caribbean Community (CARICOM) countries of Antigua and Barbuda, Bahamas, Belize, Cuba, Dominica, Grenada, Guyana, Haiti, Jamaica, St Kitts and Nevis, St Lucia, St Vincent and Grenadines, and Suriname are among the countries that have signed the PetroCaribe agreement which came into existence in 2005. Oil-producing Trinidad and Tobago and Barbados, which purchases oil from the twin-island republic, are the only CARICOM countries which have not subscribed to the initiative.
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