Venezuela’s protracted and punishing search for a route to the recovery of its once vaunted oil industry from more than five years of crippling United States sanctions would appear to be scrutinizing the PetroCaribe ‘oil alliance’ struck in 2005 between eighteen Caribbean countries and the administration of the country’s now deceased President Hugo Chavez as at least a partial option for realizing that objective.
The PetroCaribe agreement which commenced back in 2005 had been reached at a juncture when the Venezuelan economy was riding high on the country’s oil wealth and when Chavez was on a mission of seeking to strengthen ties with the English-speaking Caribbean even as high global oil prices were wreaking havoc with the heavily oil-dependent countries of the region.
Much has happened since then including the accession of Chavez’s successor, Nicolas Maduro to office in Caracas, Washington’s imposition of sanctions on Venezuela’s oil industry, the consequential decline of the country’s oil infrastructure, and the triggering of mass migration by Venezuelans to neighbouring countries in the face of a drastic decline of the country’s economy. All of this was attended by the departure of US oil companies from the country, leaving the state-run oil company PDVSA to handle the meltdown in the oil sector on its own.
Much has changed since those halcyon days and recent reports in the region indicate that Venezuela’s state-run oil company PDVSA is seeking to resuscitate the 17 year-old oil deal, albeit under new terms that seek to have recipients of Venezuela’s oil in the region pay Caracas in cash for its oil.
Earlier this year, at the 43rd CARICOM Heads of Government, St Vincent and the Grenadines Prime Minister Ralph Gonsalves had called for the removal by the United States of the sanctions imposed on Venezuela. Gonsalves had also sought to persuade the assembled CARICOM Heads to consider the region returning to the PetroCaribe Agreement, which, during the Chavez era had seen Venezuela offering concessionary payment terms to oil-dependent Caribbean countries, to offset the impact of the spike in global oil prices. Things, however, are different this time around,
Gonsalves had travelled to Venezuela earlier this year and had met with the Venezuelan President to discuss the possibility of reinstating a version of the earlier PetroCaribe agreement which, this time, around, would specifically target bringing a measure of relief to the Venezuelan economy through a more favourable payment regime for oil sold to countries in the region. It had also been reported that Caracas had agreed to cancel St Vincent & the Grenadines’ debt under the PetroCaribe Agreement.
Gonsalves was also quoted by the Caribbean Media Corporation (CMC) as saying that Venezuela was also inclined to halve the existing oil debt of other member countries of the Organization of Eastern Caribbean States (OECS) under the PetroCaribe Agreement and will, going forward, offer fuel at a 35% to countries participating in any new agreement.
