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Home >> Business
UPDATED: 12:23, September 07, 2005
Caribbean countries seek reduction in oil prices from Venezuela
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Caribbean countries seek to reduce the cost of their petroleum imports from Venezuela, which promised them favorable payment conditions as part of PetroCaribe, an energy cooperation agreement in the region.

Leaders, or their representatives, from 13 Caribbean countries are holding a meeting with Venezuelan President Hugo Chavez in Montego Bay, Jamaica, reports reaching here said.

The PetroCaribe summit takes place as oil prices skyrocket to unprecedented levels in the international market, representing an enormous burden and stunting the development of regional economies.

During the meeting, the Venezuelan government will sign agreements with the 13 countries registered in PetroCaribe, a Caracas initiative meant to guarantee energy security in the region.

In order to contain a possible wave of criticism from Venezuelan opposition parties, Chavez said his country will not give crude away to the Caribbean nations, but rather, will grant them favorable trading conditions.

Chavez said the Caribbean countries will be asked to immediately pay 60 percent of the cost, with the remaining 40 percent either being paid within two years or with products such as sugar or bananas.

Caribbean diplomatic authorities said the Venezuelan government is likely to further discount crude prices.

Since 1980, Venezuela and Mexico have supplied 180,000 barrels of crude a day to Central America and the Caribbean under favorable conditions in line with another energy cooperation program, the San Jose Pact.

The pact, sponsored by the two countries, allows for the supply of crude on credit to Central American and Caribbean countries, but does not include preferential pricing.

A new cooperation agreement, PetroCaribe, was put forth by the Chavez administration last June to supply oil to Caribbean countries on favorable terms.

The registered countries in PetroCaribe are Antigua and Barbuda, the Bahamas, Belize, Cuba, Dominica, the Dominican Republic, Grenada, Guyana, Jamaica, Saint Lucia, Saint Christopher and Nevis, Saint Vincent and the Grenadines, and Suriname.

Venezuelan Foreign Minister Ali Rodriguez called Tuesday's Montego Bay Summit as the second phase for the realization of PetroCaribe.

At the summit, leaders of the Caribbean countries are to expected to sign more extensive agreements on energy cooperation with Venezuela.

Cuban President Fidel Castro was among the first leaders to arrive in Jamaica to take part in the summit with Chavez.

Prime Minister of Trinidad and Tobago Patrick Manning cancelled his participation in the project, arguing that PetroCaribe will harm his country's crude exports.

But Ralph Gonzalvez, prime minister of Saint Vincent and the Grenadines, said during a recent visit to Venezuela that the initiative was part of an integration process to transform Caribbean society.

The Venezuelan government said PetroCaribe is part of the Bolivarian Alternative for the Americas (ALBA), a program launched by Chavez to contend with the Free Trade Area of the Americas (FTAA), proposed by the United States.

PetroCaribe will have an executive secretariat and a ministerial council, composed of representatives from its member countries, which will hold a meeting every year.

Chavez faces disapproval at home for the plan, as Venezuela's opposition accuses him of using petroleum as a political tool to get support from the region. Meanwhile, Caribbean and Central American countries have asked Venezuela to offer further discounts on crude through PetroCaribe.

Source: Xinhua

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