(Jamaica Observer) The start date for the modernisation of Jamaica’s oil refinery, Petrojam, appears to have been brought to the front of the queue of Venezuelan expansion projects.
Already delayed by five years, the project failed to take off due to the inability of the owners — the governments of Jamaica (51 per cent) and Venezuela (49 per cent) — to finance the project.
But Caracas, which turned its attention to other areas for expanding its refining operations, has since shifted its focus back to Kingston.
In a filing to the US Securities and Exchange Commission (SEC), the Venezuelan Government said that its state-owned refinery, Petroleos de Venezuela SA (PDVSA), has brought forward the start date of the Jamaica project to 2014, a year earlier than previously expected.
The aim is to increase production from 35,000 barrels per day (bpd) to 50,000 bpd at the Kingston refinery.
No reason was given for advancing the commencement date of the three-year project, but the new start date puts it ahead of several other projects, including two in Cuba, for which start dates have been put off by a year or more.
Some of those projects were earmarked for commencement before PDVSA got to Kingston.
The Jamaican Government’s inability to finance the expansion project, based on its lack of fiscal savings, has been evident for some time.
After the Government realised that the capital cost associated with the upgrade would double from the original estimate of US$663 million to US$1.3 billion over a three-year period, former Prime Minister Bruce Golding said that plans to expand the plant would be halted.
An alternative view until recently was that the Venezuelans were held back politically.
The refinery upgrade project evolved out of a memorandum of understanding signed in August 2005 between then Jamaican prime minister at the time, P J Patterson, and President Hugo Chavez, with an expected 2010 completion date.
