Guyana/Venezuela activate energy accord
Stabroek News
November 30, 2002
Guyana and Venezuela have put in place the arrangements that would allow this country to access its energy supplies on concessionary terms from Venezuela.
A release from the Foreign Trade Ministry yesterday said that the Caracas Energy Co-operation Agreement (CECA) signed on December 12 2001 by President Bharrat Jagdeo and his Venezuelan counterpart, Hugo Chavez came into operation earlier this week when “the contract for Purchase (fob) was signed by PDVSA Petroleos, S.A. and the Guyana Embassy in Venezuela.”
The agreement, which will run for one year from the date of its signing by the Presidents of Guyana and Venezuela, is automatically renewable for equal and successive periods.
The agreement provides for Venezuela to supply Guyana “with a full range of petroleum products including Gasoline, Kerosene, Dieseline, Heavy Bunker “C” fuel and aviation fuel” at prices, which are related to the international market.
“On posting of a Stand-By Letter of Credit and a Promissory Note, Venezuela shall also grant the Government of Guyana up to twenty-five per cent of the shipment depending on the prevailing price of crude (oil).” The CECA also provides, according to a previous release from the Ministry, “for the supply of adequate quantities of petroleum products to meet domestic demands.”
According to Prime Minister Sam Hinds, who has ministerial responsibility for energy, the Accord provides, in times of high prices for oil, for Guyana to obtain its supplies on concessionary terms.
He explained that Guyana would receive part of the purchase price as a loan on concessionary terms for those petroleum products that could be sourced in Venezuela.
The net effect of this arrangement, the Prime Minister said, is immediate balance of payment assistance as a substantial amount of Guyana’s fuel needs are met by Venezuela. Guyana has been able to benefit from CECA following agitation by its CARICOM partners and the Foreign Ministry. Guyana was initially excluded by Venezuela when it made the offer to the Caribbean Community.
