[NYTr] PetroCaribe, Colaboration without Precedent
 
Date: Thu, 20 Dec 2007 15:42:23 -0600 (CST)


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PetroCaribe, Colaboration without Precedent

By Juan Diego Nusa PeC1alver
AIN Special Service, Dec 20, 2007

Petrocaribe emerged as a Venezuelan proposal in the context of the 
PetroAmerica initiative on June 29th, 2005 during the 1st Energy 
Meeting of Heads of States or Government of the Caribbean. This 
regional enterprise, not the traditional commercial oil mechanism, is 
an energy security strategy and contains cooperation to guarantee the 
efficiency and savings in the generation, transmission and consumption 
of energy. It is a cooperation structure between underdeveloped nations 
without precedent in the world, governed by the principles of 
solidarity and special and differential treatment towards the less 
developed countries that lack natural energy resources. Antigua and 
Barbuda, Bahamas, Cuba, Belize, Dominica, Grenada, Guayana, Jamaica, 
the Dominican Republic, St.Kitts and Nevis, St. Lucia, St. Vincent and 
the Grenadines, Surinam, Haiti, Nicaragua and Venezuela make up 
PetroCaribe.

Supported by the experiences of the programs underway in the framework 
of the San Jose Agreement and the Caracas Energy Accord, the 
organization carried out its second presidential meeting in Montego 
Bay, Jamaica on September 6th, 2005 while the third was held in Caracas 
on August 11th, 2007. The next summit will be in the Cuban city of 
Cienfuegos.

The base document for its foundation is the Energy Cooperation 
Agreement adopted during the first summit, in which all the members of 
the Caribbean Community attended, except Haiti. The Dominican Republic, 
Cuba and Venezuela were also present.

All of the participants signed the agreement, except Barbados and 
Trinidad and Tobago, which, did not join the scheme, but assisted in 
the meetings as guests. The essence of PetroCaribe is the oil supply on 
favorable financial terms for smaller nations, vulnerable economies and 
totally dependent on hydrocarbon imports which is the typical 
characteristic of the Caribbean region. It is conceived as an agreement 
among governments, and not private energy capital nor the transference 
of resources of the public sector to the private.  It displaces the so 
called traders in the supply system, allowing the saving of the 
resources that make up the PetroCaribe Fund, whose objective is the 
financing of social programs in the region in areas like education, 
health, food and housing, among other sectors.

The entity proposes a financial scale of the oil invoicing, taking as 
reference the price of oil in the international market.

For example, if the crude goes over 50 US dollars a barrel, the 
percentage of the bill that is financed is 40 percent and the period of 
payment is extended to 25 years with one percent interest.  The short 
term liquidation is extended to 90 days, which is the usual to 30.  It 
is a real relief for many Caribbean nations.  The initiative 
contemplates, in addition, actions in refining, transportation, 
storage, exploration, production, commercialization and distribution of 
oil. With this the markets would be secured while including the energy 
costs in the sub region, with the possibility of making the 
infrastructure projects a reality for the oil and gas sector, with the 
support of the Venezuelan Social and Economic Development Bank and with 
the active participation of the national firms of goods and services 
enterprises in the different countries. PetroCaribe is a concrete 
expression of the application of the policies of the Bolivarian 
Alternative for the Americas, ALBA and constitutes an important step to 
achieve regional integration, independence and economic development. 

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