Petrojam is safe:
AMERICAN ENERGY giant ConocoPhillips’ efforts to go after US$2 billion in oil assets owned by Venezuela in the Caribbean is not expected to affect Jamaica’s sole oil refinery, Petrojam.
State oil company PDVSA has a 49 per cent stake in Petrojam, through PDV Caribe, but the court action filed this week by ConocoPhillips in the Dutch Antilles reportedly relates to assets in Curaçao, Bonaire and St Eustatius.
“Remember, it’s in the Dutch Caribbean. Those facilities are wholly owned subsidiaries of PDVSA. That won’t affect us or the other facility in the Dominican Republic. In our case, any sale of shares would call for first right of refusal on our part,” said an energy source in Jamaica.
ConocoPhillips wants to enforce a US$2-billion arbitration award over the decade-old nationalisation of its projects in the South American country. The three markets targeted for asset takeovers, Curaçao, Bonaire and St Eustatius, accounted for about a quarter of Venezuela’s oil exports last year. The three play key roles in processing, storing and blending PDVSA’s oil for export.
A Reuters report quotes a shipper and data that PDVSA ordered an oil tanker that was waiting to discharge in Curaçao to divert to Venezuelan waters after ConocoPhillips filed its court claim to seize its inventories and other assets in the island.
PDVSA leases facilities on two of the islands, so ConocoPhillips cannot take them over even with a court order, but it could seize Venezuela’s oil stored in them and any state-owned ships that dock there, AP reported, citing Venezuelan expert Russ Dallen.
The Jamaican Government formally approached Venezuela to buy out its 49 per cent stake in Petrojam, but are still awaiting Caracas’ formal response to the offer. Parliament was last advised of contact between the parties in mid-April when the Ministry of Energy responded to PDV Caribe on its request for information on the tax implications were it to accept Jamaica’s offer.
Minister Andrew Wheatley also voiced concern to Parliament on April 24 about Caracas’ treatment of the issue. Up to that point, Venezuela had not yet sent its technical team to meet with their Jamaican counterparts on the negotiations.
“The lack of the appreciation on the part of the government of Venezuela now and over the last 10 years, of the importance of this matter to Jamaica, is of concern to us,” Wheatley said.
PDVSA, which has seen its oil output drop more than a third in the last five years to below two million barrels a day, is struggling to keep up with payments due by 2020 on the US$14 billion it owes creditors.