August 29, 2005
Jamaican Prime Minister explains oil deal with Venezuela

(Observer Reporter) - "Prime Minister P J Patterson made clear that Venezuela's concessionary oil deal and other offers of assistance to Jamaica were without a political quid pro quo (...)

'There are no strings attached,' Patterson said in a radio and television broadcast (...)

During a one-day visit to Jamaica last week, Chávez signed agreements for significant oil payment concessions to the island under his PetroCaribe energy initiative as well as for a US$200-million joint-venture expansion and modernisation of Jamaica's 35,000 barrels a day Petrojam oil refinery.

He and Patterson also signed off on Jamaica's participation in a Cuba/Venezuela initiative to provide eye surgery to Caribbean and Latin patients at a facility in Cuba developed by the two countries. The first batch of Jamaican patients are expected to travel to Cuba within a week.

Patterson is acutely aware, administration officials say, of the potential of an apparent coziness with Chávez to irk the Bush administration with which he quarrelled last year over Jamaica's decision to provide temporary asylum to Haiti's ousted president, Jean-Bertrand Aristide.

At the same time the Jamaican leader, insiders claim, insists on the island's right to conduct an independent foreign policy and to take advantage of economic benefits wherever they exist. 'Jamaica is well known and respected for independent foreign policy and that is not about to change,' a senior administration official said yesterday.

In the case of Chávez's PetroCaribe initiative, what is on offer is major for energy-deficient Jamaica, which imports over 90 per cent of its energy needs and is faced with rising oil prices. This year, the country's oil bill is expected to top US$1.2 billion, the same as it now grosses from tourism. The oil bill has tripled over the past four years.

Under Chávez's scheme, which is on offer to a dozen other Caribbean countries, at the current price of oil (around US$60 a barrel) Jamaica will pay 60 per cent of the cost in cash (US$36). The remaining 40 per cent of the payment will be converted to loans of up 23 years at an interest rate of one per cent.

The PetroCaribe applies to 21,000 barrels of oil per day, or about 30 per cent of the island's consumption of 70,000 bpd.

Patterson stressed that the agreement would not only reduce pressure on the country's oil bill, but allow for exchange rate stability and provide the government with 'a pool of loan funds' to invest in economic projects and the social and physical infrastructure (...)

'We must strengthen our relations with other countries to seek opportunities of mutually beneficial economic and commercial exchanges. This includes strengthening bilateral relations with countries of the South even as we maintain our historical links with the North', Patterson said (...)".