The Trinidad Guardian
Port Spain
Petroleumworld.com 03 12 06
Venezuelan
President Hugo Chavez’s new energy initiative guarantees
Caribbean islands cut-rate financing for oil and a market for
agricultural products. Most of the 15 Caribbean Community countries
have embraced the alliance, with a notable exception: T&T.
T&T,
one of the few Caribbean countries with abundant oil and natural-gas
reserves, tends to tilt toward the US—a big purchaser
of its liquefied natural gas—and doesn’t want to
lose oil sales to island neighbours or its leadership position
in the region.
But resisting
Venezuela, and its state-run oil company, is difficult. Caracas’
initiative, called PetroCaribe, is winning Chavez, an outspoken
opponent of the Bush administration, crucial support in a region
that tends to vote as a bloc in the Organisation of American
States and other international bodies.
For the
13 Caricom nations that signed up, PetroCaribe guarantees an
energy supply and an outlet for farm products. “As heavily
indebted countries, Caribbean nations are facing the erosion
of preferential markets in Europe for commodities like sugar
and bananas,” says Anthony Bryan, a senior associate with
the Center for Strategic and International Studies in Washington.
“They see PetroCaribe as a very attractive initiative.”
Venezuela
lets the Caribbean islands finance 40 per cent of their oil
purchases at a one per cent interest rate over 25 years, following
a two-year grace period. The islands can repay the balance with
goods and services, echoing Venezuela’s “doctors
for oil” initiative with Cuba, through which thousands
of Cuban doctors, nurses and dentists treat Venezuela’s
poor in exchange for oil.
While Prime
Minister Patrick Manning chose not to participate in the Chavez
initiative, he offered to help other islands negotiate deals
with Venezuela. Trinidad’s population has a soft spot
for the charismatic Chavez, but the nation’s revenue comes
largely from energy exports, including to the US, which buys
70 per cent of its imported liquefied natural gas from Trinidad.
Barbados,
the other Caribbean nation not participating in PetroCaribe,
also has oil and isn’t eager to cross Trinidad which provides
its refining capacity.
Trinidad
and Barbados “can automatically be counted on to be the
echo chamber for Washington in the Caribbean,” says Larry
Birns, director of the left-leaning Council on Hemispheric Affairs,
in Washington. Among Washington policy makers, “there
will be a grateful consideration for these two guys,”
he says, especially at a time when a number of Latin American
countries have elected leaders, like Chavez, who openly oppose
US economic and foreign policy.
Fadi Kabboul,
Venezuela’s energy attache in Washington, says the PetroCaribe
plan extends beyond delivering oil. Venezuela envisions upgrading
refineries, improving transportation and storage facilities
and constructing a pipeline linking the islands to Venezuela—a
project that would all but cancel Trinidad’s similar Caribbean
pipeline plan.
In keeping
with Chavez’s agenda for social reform, Kabboul says,
Venezuela will help finance housing, healthcare and roads on
the islands. “This is what energy intervention is about,”
Kabboul says. “Venezuela does have the resources. They
(the islands) are in need and we have a responsibility in this
region to help those countries.”
For T&T,
the price of going it alone is steep. “There are real
economic threats, immediate and down the road,” Wendell
Mottley, told an energy conference on the island last month.
“If Trinidad doesn’t step up to the plate, then
that cements our isolation and that’s never a comfortable
position.”
Bryan of
CSIS also warns: “The PetroCaribe initiative is going
to force private oil firms to leave the area, make (Venezuela’s
oil company) Pdvsa the sole provider of oil for the Caribbean
countries that have signed the agreement, and challenge Trinidad’s
influence in the region. My real concern is that Washington
is not waking up to the fact that there is a terrible policy
vacuum in the region.”
Some experts
on the region see the islands as more independent than that,
especially when it comes to supporting Chavez in organisations
such as the OAS and the United Nations.
“Frankly,
I don’t think Chavez represents the consensus,”
says Roger Noriega, a visiting fellow at the American Enterprise
Institute and a former State Department official. “He
just has a bigger voice.”
T&T
is likely to preserve close ties with the US. “The US
is our ally,” Mottley says. “We can’t shy
away from that. Trinidad has to be careful now, seeing the drift
in politics. We have to become savvy.”
The US,
too, is weighing options. Charles Shapiro, a former American
ambassador to both Venezuela and T&T, says the State Department
sees development assistance as its primary focus in the region.
“That is, in fact, the issue for the US,” says Shapiro,
now deputy assistant secretary for Western Hemispheric Affairs,
adding that disaster preparedness and prevention—in an
area vulnerable to hurricanes—also are priorities.
Shearon
Roberts of Dow Jones & Company
