Petrocaribe

Infobox_Company
company_name = Petrocaribe S.A.
company_type = Public
company_logo =
company_slogan =
foundation = June, 2005
location = ?
industry = Oil
products = Oil
revenue = profit USD/$ ? billion (2006)
net_income = loss USD/$ ? billion (2006)
operating_income = profit USD/$ ? billion (2006)
parent = PDVSA
subsid =
key_people =
homepage =
foot_notes =
thumb|253px|">legend|#c0c000|Venezuelalegend|#c00000|CARICOM members not part of Petrocaribe

Petrocaribe S. A. is a Caribbean oil alliance with Venezuela to purchase oil on conditions of preferential payment. The alliance was launched in June 2005. The payment system allows for a few nations to buy oil on market value but only a certain amount is needed up front; the remainder can be paid through a 25 year financing agreement on 1% interest. The deal allows for the Caribbean nations to purchase up to 185,000 barrels of oil per day on these terms. In addition it allows for nations to pay part of the cost with other products provided to Venezuela, such as bananas, rice, and sugar. [http://translate.google.com/translate?hl=en&sl=es&u=http://www.pdvsa.com/index.php%3Ftpl%3Dinterface.sp/design/readmenuprinc.tpl.html%26newsid_obj_id%3D174%26newsid_temas%3D48&prev=/search%3Fq%3DPDVSA%2BPetroCaribe%26hl%3Den%26lr%3D%26sa%3DG]

"PetroCaribe will only deal with a state controlled entity, meaning that the PetroCaribe agreement is based on eliminating all intermediaries." Only state-run entities, not private businesses, can deal with PetroCaribe. The Venezuelan state oil company rejects business dealings with any private oil company in these countries, believing these private companies to be corrupt and criminal in their operations. http://www.venezuelanalysis.com/articles.php?artno=1660

Twelve of the fifteen members of CARICOM plus Cuba and the Dominican Republic signed the agreement on 7 September 2005. The nations signing the agreement were 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. The only countries to choose not to sign on were Barbados and Trinidad and Tobago. Haiti was not invited to the talks, since Venezuela did not recognize its US-installed government. The country finally joined the alliance in April 2006, once the newly-elected president René Préval took office. Honduras, which is not a member of CARICOM, became the 17th member of the alliance in December 2007.Honduras newest member of Venezuela-backed Petrocaribe, Platts, 21 December 2007, http://www.platts.com/Oil/News/6677473.xml] Guatemala joined in July 2008. [ [http://www.plenglish.com/article.asp?ID={85E009D0-DDB3-4E58-ADF2-16AE2A63DE9A})&language=EN Guatemala Joins Petrocaribe - Prensa Latina ] ]

Reasons for the holdout

Although it is understandable that Trinidad and Tobago did not sign the agreement, being oil producers themselves, many have wondered about Barbados. Some have speculated that they have succumbed to pressure from the United States, because of their strained relationship with Venezuela. Barbados has denied that this is the reason, and has not ruled out agreeing to Petrocaribe in the future. On August 31 2005, energy minister Anthony Wood said that they are weighing options over signing Petrocaribe or maintaining their [http://www.bbc.co.uk/caribbean/news/story/2005/08/050831_baroil.shtml Current Relationship with Trinidad and Tobago] . On 1 September 2005, Wood leaned towards acknowledging that Barbados would sign the agreement, given that changes are made to the original agreement. It is not known what changes are expected, but it does seem clear that the rise in international oil prices has contributed to the change of mind from Barbados. Barbados has since hinted that Petrocaribe would add a considerable amount of debt to the Barbados economy. [http://www.barbadosadvocate.com/NewViewNewsleft.cfm?Record=22845]

Criticism

While the agreement offers concessionary financing to these heavily indebted nations, it places them in a financial bind by allowing them to pay with agricultural goods (whose value fluctuates greatly from week to week) for part of their fuel bills. These nations ultimately take on more debt to pay these bills. Additionally, open press reporting has documented that the majority of the signatory countries are either not receiving fuel shipments or are receiving sporadic shipments that do little to meet the internal needs of these nationsFact|date=February 2007. Only Jamaica and Cuba are receiving regular shipments, and it is widely rumored that Cuba is paying very little or nothing at all for its fuel shipments, owing to Venezuelan president Chavez's friendship with the Cuban government. Venezuelan oil minister Rafael Ramirez acknoweledged in December 2007 that his nation was shipping far less oil than previously expected; Petrocaribe members receive 145,000 barrels daily (rather than the 300,000 barrels initially planned), and of these, 95,000 go to Cuba.

Notes

References

* [http://www.cadenagramonte.cu/english/economy/petrocaribe_cuba.asp PETROCARIBE Expresses the Unity, Solidarity and Cooperation among the Peoples]
* [http://www.cananews.net/news/131/ARTICLE/14546/2007-08-13.html PetroCaribe saves Caribbean millions - Venezuela] - 13 August 2007, 09:12:00
* [http://www.caribbeaninvestor.com/article.shtml?browser_query=varticle&field=5359 Belize joins Petrocaribe deal] - December 4th, 2006: Caribbean Investor
* [http://www.jamaicaobserver.com/magazines/Business/html/20060112T210000-0500_96451_OBS_MANNING_WARNS_CARIBBEAN_AGAINST_PETROCARIBE.asp Manning warns Caribbean against PetroCaribe] - January 13, 2006: Jamaica Observer news
* [http://barbadosadvocate.com/NewViewNewsleft.cfm?Record=23976 PetroCaribe raises fears] - January 12, 2006: Barbados Advocate News
* [http://www.stabroeknews.com/index.pl/article_local_news?id=41150077 Local News: Manning restates Petrocaribe warning - By Miranda La Rose] : January 11, 2006 - Guyana Chronicle Newspaper
* [http://www.trinidadexpress.com/index.pl/article_opinion?id=105808704 Rickey Singh Editorial: Bajans' lonely place in PetroCaribe] - October 3rd, 2005: Trinidad and Tobago Express News
* [http://www.barbadosadvocate.com/NewViewNewsleft.cfm?Record=22974 Anthony Wood: Barbados won't sign Petro-Caribe agreement] - September 29th, 2005: Barbados Advocate News
* [http://www.nationnews.com/life/284321588620938.php Sir John praises Barbados for not taking oil deal] - September 25th, 2005: Barbados Daily NationNews
* [http://www.barbadosadvocate.com/NewViewNewsleft.cfm?Record=22891 'SAY NO TO OIL DEAL�´] - September 22nd, 2005: Barbados Advocate News
* [http://www.barbadosadvocate.com/NewViewNewsleft.cfm?Record=22907 Oil deal is far too risky] - September 23rd, 2005: Barbados Advocate News
* [http://www.nationnews.com/story/284267391414402.php Case against PetroCaribe] - September 18th, 2005: Barbados Nation News
* [http://www.barbadosadvocate.com/NewViewNewsleft.cfm?Record=22591 Regional assistance at what cost?] - August 29th, 2005: Barbados Advocate