Guyana is considering energy alternatives to the Petrocaribe program as Venezuela fails to meet export quotas and tensions flare between the neighboring countries.
“We are actively considering other options,” Guyanese Finance Minister Winston Jordan said in an interview on Wednesday.
The small South American nation receives about half its fuel supply from the Petrocaribe program, but fears the agreement could be affected by a diplomatic spat with Venezuela over a longstanding border dispute, Jordan said. Guyana currently receives about 5200 barrels of fuel a day under the Petrocaribe program, though Venezuela has been unable to meet some delivery quotas, he said.
Relations between the South American neighbors have hit their lowest point in recent years following Exxon Mobil Corp.’s announcement of a “significant” oil discovery off Guyana’s coast in waters that Venezuela also claims as its own.
Venezuela has long contested that’s borders drawn in 1899 are invalid and claims nearly two-thirds of Guyana’s as its own.
Earlier this month, Venezuelan President Nicolas Maduro recalled his ambassador in Georgetown for consultations and said he would review relations. Venezuela will stop purchasing Guyanese rice in November when a bartering agreement for oil payments expires, according to Guyana.
Through the rice for oil deal, Jordan said Guyana “sharply decreased” its Petrocaribe debt over the years to its current level of some $160 million. “The oil dispute may have accelerated recent actions, and may have hardened stances,” he said.
A signature program of the late Hugo Chavez, Petrocaribe has sold about $28 billion to nations across the Caribbean and Central America since its creation in 2005. Member countries finance as much as half the price of the shipments at 1 percent to 2 percent interest over 25 years. Jordan says Guyana had no plans of exiting Petrocaribe due to its generous terms, while remaining cautious as no agreement had been signed for 2015.
“This is a scenario where Venezuela has the oil and we are buying the oil on an arrangement from them — they could cut it off at any time. You have to be prepared.”
Source: Bloomberg
