The terms under which countries purchased oil from Venezuela through the PetroCaribe Agreement have been eased by the country’s president Hugo Chavez in the light of high oil prices. PetroCaribe, a Venezuelan initiative comprising 17 mainly Caribbean countries, including Guyana, sees those states sourcing oil from Venezuela under concessionary terms.
According to Venezuela’s El Universal newspaper, under the new terms, when crude prices are higher than US$100, PetroCaribe members will pay 40 per cent of the bill and the other 60 per cent will be paid in 25 years with an annual interest rate of one per cent.
The current price per barrel of oil is in the US$140 range and the new agreement came into effect on Sunday. Under the previous terms of the agreement, if oil prices were higher than US$100, member countries paid 50 per cent of the bill within 90 days and Venezuela financed the other 50 per cent in 25 years with an annual interest rate of one per cent and a grace period of two years.
The new agreement also provides that if oil prices reach US$150, PetroCaribe signatory countries shall pay 30 per cent of the bill within 90 days and the remaining 70 per cent would have a special financing at the time of signing of final agreement.
The new terms were revealed at the end of a PetroCaribe summit, held in Maracaibo, Venezuela last Sunday. Prime Minister Samuel Hinds represented Guyana at the summit.
The El Universal report said that some member countries had raised the issue of the high oil price and its burden on them and Chavez decided to ease the oil purchasing terms. He was quoted as saying that since member countries have a long-term payment 50% of the bill “could be paid with agriculture products”.
Venezuelan Energy and Oil Minister, Rafael Ramirez, during the summit revealed that in the last three years, oil supply to PetroCaribe member states had increased and from 2005 to June 2008, 59 million barrels had been supplied to those countries.
Meanwhile, Chavez announced that one of the oil blocks in the Orinoco belt would be assigned to PetroCaribe member countries. During the summit, some Caribbean Heads of State made several requests to Chavez and most of them were accepted by the Venezuelan President, El Universal reported.
Guyana has the oil. For how much longer will we depend on others. Our leaders must act to secure our future. We have to think long, long, long term and start revamping our education system. We have to make Guyana more lucrative for the educated masses. Are there Guyanese capable of putting heads together to come up with alternative sources of energy? YOU BET!! There are some places along Guyana’s coastal plane that on most part of the day seem like a wind tunnel. Hey that seems like a start!!! Get a team OF KNOWLEDGEABLE people together for a feasibility study. No political appointments please, I won’t bank on them to be very objective and positive.
Sure….Guyana has oil…..but Big Oil companies aren’t interested in more supply at the present time……their main interest is to keep the price high……more oil available would cause the price to drop….and anyway….unless a refinery is built most of the profits will be shipped elsewhere. The present Govt was not thinking ahead…..there has been studies done by the Yugoslavs many years back on about seven small hydro projects…. these need to be looked at. The UMRP project was too grand an idea……but Guyana’s future is in Hydro power. Also……instead of closing our sugar estates…..we should have been converting them to produce ethanol…..and using that to power our vehicles like Brazil.
correct assesment,since guyana is below sea level maybe wind power too.can guyana consume all this energy.How will they pay for it?is there an export capacity.who will buy.whatever you produce sombody has to pay for it and maybe somboy has to consume it.
this not opening a store in GT.it requires large capital?who is gonna pay and how.
Brilliant ideas guys but I think that Guyana is asking for too much of the profits to make oil exploration deals work for potential invertors. The proposal they gave to CGX do not seem workable. Other wise we would have seen oil drilling activity already.
Govt should stop trying to be partners in these businesses. Govt should not be in business. They should be giving out and selling concessions and charging royalties and taxes not asking for shares in the business. They should also be targeting Guyanese investors to make sure that much of the profits remain in Guyana.