New PetroCaribe deal welcomed
KINGSTON – Jamaica has paid US$1.6 million to Carib Cement Company Limited as part payment for the provision of clinker to Venezuela under the Trade Compensation Mechanism of the PetroCaribe Agreement.
The initiative, which commenced in December last year, will continue until May and will allow Jamaica to supply Venezuela with an estimated 100 000 tonnes of clinker, valued at approximately US$8.5 million.
Clinker is used in the intermediate stage of cement production.
Finance and the Public Service Minister Dr Peter Phillips said the arrangement with Caracas was quite significant, as it represents the first time the government has utilised the provision under the PetroCaribe Agreement for payment to be made by way of supplying commodities to Venezuela, thereby reducing the country’s debt obligations.
The arrangement facilitates the government’s repayment of a portion of its oil debt to Venezuela, which currently stands at approximately US$2.5 billion, with locally produced goods and services in lieu of cash.
Phillips described the agreement as a “win-win” situation for everyone, noting “Venezuela has benefited from the supply of materials that they need, while Jamaica and Carib Cement have benefited tremendously, by pioneering an additional market for their product.
He said the agreement would also allow for Kingston to be able “to reduce our level of debt, and at the same time facilitate productive activity in Jamaica”.
Phillips said he was urging other Jamaican companies to pay close attention to the arrangement, noting that it provides an opportunity for them to identify markets on a sustained basis.
“The PetroCaribe Fund represents a long-term obligation for Jamaica. We repay in excess of US$100 million each year, under the agreement. It’s possible, therefore, for companies who can identify Venezuela, and importers, who can engage in the appropriate arrangements, to supply those commodities from Jamaica.
“They’ll be able to expand their own productive activity here in Jamaica, pioneer the development of long-term export arrangements, and assist Jamaica in repaying, in kind, the obligations, which we have under the PetroCaribe Agreement,” Dr Phillips remarked.
Chief Executive Officer of the PetroCaribe Fund, Dr Wesley Hughes, said the initiative provides a template for local companies wishing to export to Venezuela.
“So we don’t have to go through this elaborate learning curve that we just completed. And there are long term opportunities for other companies and we at the PetroCaribe Fund are putting ourselves in a position to give as much help as possible,” he added.
PetroCaribe is an oil alliance through which many Caribbean states purchase oil from Venezuela on conditions of preferential payment. The alliance was launched on 29 June 2005. In 2013 PetroCaribe agreed links with the Bolivarian Alliance for the Americas (ALBA) to go beyond oil and promote economic cooperation. (CMC)