JIS News

The signing of an energy agreement between Jamaica and Venezuela under the Venezuelan PetroCaribe Initiative was without doubt, one of the major highlights of 2005 for the Office of the Prime Minister (OPM).
Among other things, the co-operation agreement included the supply of 21,000 barrels of crude oil per day to the Petrojam refinery on Marcus Garvey Drive in Kingston.
Prime Minister P. J. Patterson and Venezuelan President, Hugo Chavez signed the relevant documents at the Ritz Carlton Hotel in Rose Hall on August 23, after a series of bilateral talks.
Mr. Patterson told journalists then that Jamaica was pleased with “the distinction and honour of being the first signatory to a bilateral agreement under the PetroCaribe Agreement”.
He noted that with oil prices in the vicinity of almost $70 per barrel, Jamaica stood to benefit by way of a $40 loan for each barrel purchased at a one per cent interest rate, in addition to a two-year grace period with a 25-year payment period. The Prime Minister however, pointed out that the supply of 21,000 barrels of crude per day under the facility, would still require Jamaica to purchase refined products to supply its market demands and the country would continue to purchase products from Trinidad and Tobago.
The signing was the fruition of agreements under the Memorandum of Understanding (MoU) between the Venezuelan state-owned oil company, PDVSA and the Petroleum Corporation of Jamaica (PCJ), for the upgrading and expansion of Petrojam. Under the MoU, which was signed at the Heads of Government energy meeting held at Puerto la Cruz, Venezuela in June, PDVSA agreed to provide personnel in September for the preparation of the design basis memoranda and tender documents for the basic engineering to Petrojam, to enable construction to commence in late 2006.
The upgrade will expand the capacity of the refinery by about 42 per cent to 50,000 barrels per day, and through the introduction of new processing technology, increase the proportion of higher quality fuel produced from the crude supplies. The PCJ and PDVSA are to be 50/50 partners in the US$500 million expansion of the oil refinery.
Prime Minister Patterson said he was of the opinion that, “this model of PDVSA involvement will be carried forward with appropriate modifications as necessary to certain Eastern Caribbean countries”.Mr. Patterson also noted that discussions between the delegations also focused on the potential for expanding the tourism markets of both countries, which would require, among other things, a review of air links between Venezuela and Jamaica.
The Prime Minister said a decision had also been taken to exchange experience with Venezuela in the fields of marketing and training. With respect to training, he disclosed that an exchange programme would be put in place for hospitality training at the Runaway Bay HEART Academy in St. Ann on a yearly basis.
Furthermore, he said the programme would be extended to hotels to provide practical experience for the workforce, and additional space would be made available at the University of Technology (UTech) for tertiary level training.
President Chavez, in his remarks, noted that the PetroCaribe Initiative was designed to provide support for countries, which were vulnerable and in need. He said the assistance would see some 200,000 barrels of oil being supplied daily to various countries, including Cuba, Jamaica, the Dominican Republic and Guyana.
He pointed out that the provisions under the initiative would mark the fulfillment of the vision of South American Liberator, Simon Bolivar to “create in this part of the world, a single nation, a strong nation, that will re-establish the balance with the older parts of the world”.
PetroCaribe is intended to benefit the Caribbean region through lower energy costs as well as the development of supply infrastructure, joint refining and co-ordination of hydrocarbon supply and distribution.
Participating CARICOM countries are expected to design acceptable co-operation schemes that would return value to the Venezuelans for the support being provided under PetroCaribe. These include provisions for language training and tourism at different levels as well as sports development.
The signing was followed by a Second Energy Summit of Heads of State and Governments of the Caribbean and the Bolivarian Republic of Venezuela in September at the Ritz Carlton Hotel in Montego Bay.
It was attended by Presidents and Ministers of government from the 17 countries, including Cuba, which signed the Constituent Agreement for the PetroCaribe Agreement on June 29. The officials and ministers of energy met to discuss, among other matters, the establishment of a PetroCaribe Secretariat to manage the initiative, as well as a proposed energy research facility for the Caribbean. There was also a series of presentations on renewable energy sources by energy ministers.
Delivering the main address at the summit, Mr. Patterson lauded the PetroCaribe Initiative, noting that the agreement would serve to deepen and strengthen the bonds of friendship and the process of collaboration between the Caribbean Community (CARICOM) and Venezuela. “It also represents an important vehicle for enhancing energy security, promoting capacity building and accelerating the development agenda at the national as well as the regional levels,” he pointed out.
He expressed confidence that the signing of the other bilateral agreements with Venezuela, would redound to the benefit of Caribbean countries and their peoples.
Prime Minister Patterson also used the occasion to call on developing nations to work to develop long-term solutions to their energy needs.
He said that with the oil reserves of major producers now estimated at 800 billion barrels and at present consumption and production levels, should only last for another 27 years, “all countries should ensure that a portion of their energy needs is met from environmentally-friendly renewable sources of energy”.
He pointed out that a combination of factors, such as devastating weather systems, have driven oil prices to an unprecedented level, contributing to the increasing cost of oil. “Security of supplies and stability in price are issues of great concern, especially for small non-oil producing states such as those in the Caribbean,” he stated.
The Prime Minister said that countries in the region must be mindful of the fact that oil was a finite resource that must be carefully managed for the benefit of future generations.
Calling for more focus to be placed on renewable energy, he noted that wind, solar, hydropower and biogas were readily available in the region and some large manufacturing operations were already benefiting from the technical knowledge for cogeneration projects and energy saving methodologies. He noted that Jamaica was already undertaking several projects for the development of renewables.
Meanwhile, in May, Mr. Patterson and Brazilian Minister of External Affairs, Celso Amorim, discussed how Jamaica could benefit from assistance in developing ethanol as an alternative source of energy. Mr. Patterson said ethanol, as a renewable source of energy, had acquired even greater significance with the projected changes to the sugar protocol with Europe. The Prime Minister said that with oil prices rising on the world market, identifying other sources of energy was important. He pointed out that this would also impact the expansion of the Jamaican economy.
In a wide-ranging discussion during a courtesy call on the Prime Minister at Jamaica House on May 16, Mr. Patterson and the Brazilian Foreign Minister spoke about issues relating to the promotion of South/South co-operation, the Free Trade Area of the Americas as well as trade negotiations between MERCOSUR and CARICOM. The discussion also examined the proposed reform of the United Nations, noting that emphasis should be placed on the character and nature of the UN reform in light of current global challenges and realities.
The meeting reaffirmed the commitment of both countries to deepen bilateral relations as well as co-operation at the international level.