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PETROCARIBE: Guyana hopes for crude refining pact with Trinidad
By Miranda La Rose
Stabroek News
GUYANA
Petroleumworld.com 03 27 06Guyana is hoping that current talks between Trinidad and Tobago (T&T) and Venezuela, as well as Caricom and Venezuela on the Petrocaribe Initiative, would conclude in an arrangement whereby Caricom countries could buy crude oil from Venezuela and have it refined in T&T.
Prime Minister Sam Hinds, who holds the portfolio for energy, said in an interview that were Guyana and other Caricom countries to buy crude oil from Venezuela and have it processed in T&T, the political and economic benefits would redound to the benefit not only of the countries purchasing the oil but to T&T, Venezuela and the region as well.
"Such an arrangement would create a desirable partnership between Venezuela and Trinidad and Tobago and Caricom," Hinds said.
He said he hoped T&T would also have the option of buying crude oil under the Petrocaribe deal and reselling it to Caricom countries.
While there is some agreement on this issue among Caricom member states, he stressed that he was not speaking on behalf of Caricom.
He said countries involved in the Petrocaribe Initiative were due to meet once again, but reiterated that at the moment Guyana was encouraging an agreement between Venezuela and T&T to send crude to T&T for processing.
On the economic side of the agreement, Hinds said, 40% of the fuel bill would be financed through a soft loan, which would make it easier to adjust to higher fuel bills if countries could avoid the extravagant use of fuel. However, payments would still have to be made.
Hinds said Guyana was still interested in being part of the Petrocaribe Initiative put forward by Venezuela's President Hugo Chavez, and discussions on Guyana and Caricom's involvement were now being led by T&T's Prime Minister Patrick Manning, current Chair-man of Caricom and leader of the main Caricom oil-producing country.
Manning is talking with Venezuela at the bilateral level as well as on behalf of Caricom, after it was agreed he should do so at the Inter-sessional Meeting of Heads of Government in February.
And the discussions have moved away from what obtained in early January this year when Manning, on assuming the chairmanship of Caricom, had said that while there may be distinct negatives for T&T's oil industry from the Petrocaribe agreement it could be even more dangerous for Caricom states looking for oil on soft terms.
Hinds said this country could benefit from part-shipping arrangements, based on what was now in place with T&T and Venezuela, if Guyana bought the crude and had it processed in T&T.
At present Guyana buys all its fuel from T&T with the exception of special fuel products that are imported from Venezuela.
Prior to that, Guyana bought its fuel from Venezuela but stopped after the strike at the Venezuelan state-owned oil company, Petroleos de Venezuela (PDVSA), four years ago.
He said while the prices would not be cheaper under the Petrocaribe Initiative, because of conditions laid down by the Organisation of Petroleum Exporting Countries (OPEC), there would be advantages in terms of economies of scale through processing in T&T and onward shipment to Guyana.
Prior to the signing of the Petrocaribe deal in Venezuela there had been no decision taken by Caricom as a whole on the issue, and Manning had said that what was important was how countries related to each other.
He said if the Petrocaribe arrangement went through as currently structured, T&T would have to eliminate its emphasis on the Caribbean as a market for the export of its refined products.
Given the fluctuations in the price for oil, Manning noted that countries of the region, which essentially were oil-importing countries, were faced with extremely high oil import bills.
Under the agreement signed by Guyana and 11 other Caricom member states, Cuba and the Dominican Republic with Venezuela last June in Venezuela, provisions are to be put in place for financing mechanisms and compensation, which include long-term and short-term financing, deferred payment, and energy efficiency. According to the agreement, Venezuela is also offering technical co-operation to support the creation of state agencies in countries not possessing the requisite state institutions for this purpose.
T&T and Barbados did not sign the agreement while Jamaica, which has its own oil refinery, has already begun to access crude.
Stabroek News 26 03 06
Copyright © 2006 Stabroek News. All Rights Reserved.
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