Petrocaribe

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Petrocaribe S.A.
Type of Company	Public
Founded	June, 2005
Headquarters	?
Industry	Oil
Products	Oil
Revenue	USD/$ ? billion (2006)
Operating income	USD/$ ? billion (2006)
Net income	USD/$ ? billion (2006)
Parent	PDVSA

Petrocaribe S. A. is a Caribbean oil alliance with Venezuela to purchase their oil on conditions of preferential payment, launched in June of 2005. The payment system allows for nations to buy oil on market value but only a certain amount is needed up front; the remainder can be paid through a 25 year financing agreement on 1% interest. The deal allows for the Caribbean nations to purchase up to 185,000 barrels of oil per day on these terms. In addition it allows for nations to pay part of the cost with other products provided to Venezuela, such as bananas, rice, and sugar.[1]

12 of the 15 members of CARICOM plus Cuba and the Dominican Republic signed the agreement on September 7th. The nations signing the agreement were Antigua and Barbuda, the Bahamas, Belize, Cuba, Dominica, the Dominican Republic, Grenada, Guyana, Jamaica, Suriname, St Lucia, St Kitts and Nevis, and Saint Vincent and the Grenadines. The only countries to choose not to sign on were Barbados and Trinidad and Tobago. Haiti wasn't invited to the talks, since Venezuela did not recognize its US-installed government. More recently, however, Venezuelan president Hugo Chávez has discussed the possibility of Haiti's entry into the project with president-elect René Préval.

[edit] Reasons for the holdout

Although it is understandable that Trinidad and Tobago did not sign the agreement, being oil producers themselves, many have wondered about Barbados. Some have speculated that they have succumbed to pressure from the United States, because of their strained relationship with Venezuela. Barbados has denied that this is the reason, and has not ruled out agreeing to Petrocaribe in the future. On August 31 2005, energy minister Anthony Wood said that they are weighing options over signing Petrocaribe or maintaining their Current Relationship with Trinidad and Tobago. On September 1, Wood leaned towards acknowledging that Barbados would sign the agreement, given that changes are made to the original agreement. It is not known what changes are expected, but it does seem clear that the rise in international oil prices has contributed to the change of mind from Barbados. Barbados has since hinted that Petrocaribe would add a considerable amount of debt to the Barbados economy. [2]