Guyana to get PetroCaribe oil
Guyana Chronicle
January 25, 2007
GUYANA yesterday signed the PetroCaribe bilateral agreement in Caracas, Venezuela under which it will get oil supplies from that country.
Head of the Guyana Energy Agency (GEA), Mr. Joseph O'Lall signed the agreement for Guyana.
A source said the agreement is for 5,200 barrels of oil a day with the first shipping date to be May 1.
Prime Minister Samuel Hinds confirmed that the agreement was signed, noting that the PetroCaribe accord is for Balance of Payment support that gives countries like Guyana time to adjust to the significantly increased prices of crude oil and petroleum products.
Representatives of the two neighbouring countries have been meeting since 2005 on arrangements for Guyana to benefit from the PetroCaribe/Caracas accord
Guyana has been a signatory to the PetroCaribe agreement since July 2005 but has not yet made any purchases under the concession.
Under the PetroCaribe agreement, countries pay market prices for Venezuelan petroleum products.
However, at crude prices greater than US$15 per barrel, credit is provided for a portion of the purchase: from five per cent per barrel to 50 per cent at crude prices greater than US$100 per barrel.
Repayment conditions which are very concessionary, from US$15 per barrel are even more so at crude oil prices greater than US$40 per barrel.
President Hugo Chavez had announced that Venezuela would provide some US$17 billion in financing over the next 10 years for some 200,000 barrels per day of oil supplies to Caribbean nations under the PetroCaribe facility.
President Chavez has stressed that this facility does not offer lower, discounted prices but seeks to provide balance of payment support to oil-importing countries whose governments must now find twice as much foreign exchange as before to pay for fuel imports.
The facility is intended to provide time for oil-importing countries to make adjustments, not to continue flagrant use of petroleum fuels, officials have explained.