Curtis Williams, Contributor
Prime Minister P.J. Patterson and Venezuelan President Hugo Chavez, show copies of the energy cooperation agreement under the PetroCaribe Initiative for the supply of 21,000 barrels of crude oil per day to the Petrojam Refinery. The documents were signed on Tuesday at the Ritz Carlton Hotel in Montego Bay.
TRINIDAD AND Tobago's state-owned oil company Petrotrin will lose its market in Jamaica, based on the agreement signed by the governments of Jamaica and Venezuela on Tuesday.
But Minister of Commerce, Science and Technology, Phillip Paulwell, has stated that Petrotrin's retreat will not come before 2008.
"We will continue to buy our additional refined products from T&T as long as they are available," the minister said. Jamaica is Petrotrin's largest single customer outside of the United States eastern seaboard.
Petrotrin's general manager, marketing, Kenneth Allum, said Jamaica's imports of products from T&T averaged 20,000 barrels of product per day. The company's executive chairman, Malcolm Jones has said they will seek alternative markets if they are shut out from Jamaica.
Petrotrin markets 50,000 barrels of crude oil equivalent per day in the region. In total, it refines 160,000 barrels of crude oil per day.
Petrotrin has embarked on a massive investment drive to improve its efficiency and the Trinidad government is also contemplating building a second refinery.
Paulwell explained that the signing of the agreement in Montego Bay was to give effect to the PetroCaribe initiative.
"We have signed an agreement to increase our import of crude from Venezuela from 7,400 barrels of oil per day to 21,000 bpd. This would mean that we would still require another 20,000 bpd to meet our needs and we will get that product from Trinidad. However, in 2008 when the refinery is upgraded and expanded, Jamaica will be able to refine all the product we need for domestic consumption and have a little to export."
With its oil bill expected to top US$1 billion this year and international petroleum prices hovering over US$65 per barrel, Jamaica on Tuesday, sealed the agreement to purchase oil from Venezuela on concessionary terms.
BILATERAL AGREEMENT
The agreement was finalised during the visit of the President of Venezuela, Hugo Chavez, who met with Jamaica's Prime Minister P.J. Patterson at the Ritz-Carlton Hotel in Montego Bay.
Under the PetroCaribe deal, the bilateral agreement between Jamaica and Venezuela seeks to provide crude oil at a reduced rate.
Paulwell said it was one of the reasons the company was moving speedily ahead to upgrade its refinery so that it can produce products which can be sold in more sophisticated markets.
Petrojam is expected to award the first contract for the refinery upgrade by October.
