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Venezuela commits to PetroCaribe despite oil price dip

  • Written by News Jamaica
  • Published in local news
Featured Venezuela commits to PetroCaribe despite oil price dip
CARACAS, November 20, 2014 - Venezuela on Thursday pledged that the preferences given to regional countries under the PetroCaribe Agreement will remain in place, with oil being supplied on favorable terms to member states despite a drop in international crude prices. 

This commitment was given during a meeting of PetroCaribe member states in Caracas to review the current situation.

Venezuela's Foreign Minister Rafael Ramirez, the former CEO of state oil company Petróleos de Venezuela (PDVSA), stressed at the opening of the gathering that the South American nation remains "firmly committed" to the initiative.

PetroCaribe "is an energy agreement that is perfectly sustainable over time," Ramirez told energy ministers of the 18 member states. Jamaica is being represented at the meeting by a senior official in the country's Energy Ministry.

The Venezuelan Government-promoted PetroCaribe alliance has come under increasing criticism in recent weeks due to a sharp drop in oil prices, which President Nicolas Maduro says have caused government revenues to fall by at least 35 percent.

Venezuela's Opposition blames the Maduro administration's continued support for PetroCaribe, in large part, for the country's financial woes. The price of Venezuela's crude basket fell last week to $70.83 per barrel, its lowest level since October 1, 2010, when it closed at $69.61 per barrel.  

PetroCaribe is made up of Antigua and Barbuda, Bahamas, Belize, Cuba, Dominica, Granada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, the Dominican Republic, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Saint Lucia, Suriname and Venezuela.  

Established in June 2005 by Maduro's predecessor, the late Hugo Chavez, the trade arrangement allows poor Central American and Caribbean countries to purchase crude and derivatives from Venezuela on conditions of preferential payment.

Earlier this week, the International Monetary Fund (IMF) says it is  concerned about the future of the PetroCaribe concessionary oil-deal in the wake of what it has described as Venezuela’s deteriorating economy and falling international oil prices.

Advisor in the IMF’s Western Hemisphere Department, Elie Canetti, who is heading an IMF team to St. Vincent on an Article 4 consultation, said Monday, Venezuela was hugely dependent on its oil sales. With the price of oil dropping from around US$115 per barrel to US$70 per barrel, he said, this deepened his concerns.

In the meantime, Venezuelan Foreign Minister Rafael Ramírez says his country’s state run oil company Petróleos de Venezuela (Pdvsa) would be willing to cut its crude oil output to stop the fall of oil prices if the Organization of the Petroleum Exporting Countries (OPEC) makes such a decision in its upcoming meeting scheduled for next week.

Ramírez, Venezuela's representative to the OPEC, added that the fair price of crude oil in the international market should be USD 100 and highlighted that low prices were in no one's interest.

He would not elaborate on the proposal Venezuela is bringing forward at the OPEC meeting on November 27 in Vienna, Reuters reported.

Last modified onThursday, 20 November 2014 22:41