The Jamaica government said last week it will be enacting special legislation that would allow it to forcibly retake the 49 per cent stake held by Venezuela in the state-owned oil refinery Petrojam, according to a report on the OECS Business Focus.
Reports cite lack of movement on the part of Venezuela on a number of commitments made following the signing of an agreement in 2006.
“It will not be a general piece of legislation which allows for acquisition of property rights, other than land, beyond the scope of the transfer of ownership of the 49 per cent shares in PetroJam currently held by PDV Caribe,” Foreign Affairs and Foreign Trade Minister, Kamina Johnson Smith, is reported to have told a news conference.
The article which appeared on Monday said that PDV Caribe, an affiliate of the state-owned Petroleos de Venezuela S.A., and the Petroleum Corporation of Jamaica (PCJ) in August 2006 entered into a joint venture agreement resulting in the sale of PetroJam shares in February 2007.
Among the agreement’s deliverables was the upgrading and expansion of the refinery with a view to improving its competitiveness and meet local and international market demands, but Johnson Smith said these objectives were not met and that this poses a risk to the economy.
According to the article, Johnson Smith told reporters that Prime Minister Andrew Holness had led a delegation including then energy minister Dr Andrew Wheatley that held talks with Venezuelan President Nicolás Maduro in May 2016 where Caracas gave a commitment to upgrading Petrojam.
The Foreign Affairs and Foreign Trade Minister said that after signing a Letter of Intent in January 2017 and a refinery upgrade agreement in February 2018, “Venezuela has not fulfilled its obligations and that Kingston had made a formal offer to buy back the Petrojam shares in March 2018.”
“But it has become clear that the shared priority and interest in Jamaica’s energy security, which drove PCJ and PDVSA to work together to operate and upgrade Petrojam, no longer exists,” Johnson Smith told reporters.
“Even as the government of Jamaica acknowledges values and appreciates the tremendous support provided to this country by the Bolivarian Republic of Venezuela to the energy sector over the years, Jamaica regretfully cannot continue negotiations in perpetuity, especially where it appears that delays are of no concern to our counterparty. Therefore, in the national and economic interest of Jamaica, the decision has been taken to commence the legislative process towards acquiring the shares in Petrojam held by PDV Caribe,” said Johnson Smith.