Venezuela months away from supplying Guyana’s fuel
-Strike has had long term effect on industry
Stabroek News
February 23, 2003
It will be months before Guyana can access oil from Venezuela under the Caracas Energy Accord even if the two-month old strike in the oil industry is settled soon.
This will likely mean continued higher prices for motorists and will affect electricity bills. It also comes at a time when the threat of war in Iraq is already keeping the price of crude oil high. The accord allows Guyana and other Caribbean countries to access fuel on concessionary terms where a percentage of the bill is converted into long-term, low interest debt.
Guyana and Venezuela signed the accord in 2001 but the arrangements that would allow for Guyana to access its supplies under preferential terms were not concluded until late last year. Since then Guyana has been unable to access any supplies as a national strike has virtually shut down production.
In the interim Guyana has been accessing its oil supplies from Trinidad and Tobago at higher prices.
Guyana’s Ambassador to Venezuela Bayney Karran told Stabroek News that soon after the strike was called, the supply of crude to the refinery in Curacao dried up and neither Guyana nor any of the other CARICOM countries which are parties to the accord have been supplied with oil.
Karran explained that most experts believe that it would be some time after the strike is settled before there could be a resumption of something like normal supplies from the state run oil company PDVSA. He warned, however, that all the experts have stated that PDVSA would never regain its pre-strike productive capacity.
The prevailing opinion is that because PDVSA’s wells are old they had to be kept working continuously to keep their pressure up and that as a result of the eight-week down time, when re-started the required levels of pressure could not be obtained. This could mean losses of US$400,000 a day to the industry.
