August 12, 2005
What’s in the PetroCaribe deal?

The question most people have been asking about the controversial PetroCaribe deal is what exactly is Venezuela offering the Caribbean in this most generous arrangement?

Following are some important areas of the document signed by Jamaica, Bahamas, Dominica, Belize, Antigua, St. Kitts and Nevis, St. Lucia, Cuba, Suriname, the Dominican Republic and St. Vincent and the Grenadines.{{more}}

Barbados and Trinidad and Tobago did not sign the agreement.

Immediate creation of PetroCaribe as a body aimed at facilitating the development of energy policies and plans involving oil and oil derivatives, gas and electricity.

The creation of a fund called the AlbaCaribe Fund earmarked for financing social and economic programmes and consisting of contributions from financial and non-financial instruments.

To activate the AlbaCaribe Fund, Venezuela will contribute initial capital of US$50 million.

Freight expenses arising from the operations would be charged at cost price, representing additional savings for the signatories.

There would be direct trade without intermediaries in the supply process.

To this end, Venezuela would be responsible for organizing a logistics network of ships, storage facilities and terminals. This would include refining and distribution facilities for fuels and products.

Venezuela will extend credit facilities to Caribbean countries “exhibiting less relative development on the basis of bilaterally fixed quotas.”

“Should the price per barrel exceed US$40, the payment period shall be extended to 25 years, including the two-year grace period specified at one per cent interest. With regard to deferred payments, Venezuela shall be able to determine the portion that shall be paid with goods and services for which it shall offer preferential rates.

The products that Venezuela may purchase at preferential rates may include certain items such as sugar, bananas, or other goods or services to be determined that are believed to be affected by the trade policies of rich countries,” the agreement stated. (Business Authority)