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Venezuela has been mandated by several Caribbean countries to draft a multilateral agreement to fast-track the implementation of the PetroCaribe initiative.

This was one of the major decisions that emerged from the latest meeting between Venezuela and Caribbean energy ministers.

PetroCaribe is the brainchild of Venezuelan President Hugo Chávez and is designed to reduce the effects of high oil prices on the region by offering the energy-dependent islands petroleum products at reduced costs.

The ministers said, "In order to fast-track progress, [we] established a technical commission under the chairmanship ofUVenezuela, which will draft the multilateral agreement and consult with member states in order to present a draft of the agreement for consideration and approval at the next ministers' meeting, to be hosted by the Bahamas in November 2004."

The other members of the technical commission are Trinidad and Tobago, Barbados, Cuba, Jamaica, Suriname, and St. Vincent and the Grenadines.

PetroCaribe plan

PetroCaribe calls for state energy producing companies and governments throughout the Caribbean to coordinate their oil and gas production policies and set up mechanisms to ensure energy supplies to oil consuming countries in the region.

Already several Caribbean countries, including Jamaica, have arrangements through the San Jose Pact and Caracas Energy Accord that allow them to secure oil from Venezuela below world market prices. The PetroCaribe initiative is intended to improve on the current arrangements.

The ministers concurred that "Venezuela review and if necessary expand existing energy arrangements, in particular the Caracas Energy Accord, in order to facilitate easier access by beneficiary countries.

"The beneficiary countries also agreed to review any obstacles to accessing the benefits under the existing energy arrangements, with a view to implementing corrective measures where possible."

Venezuelan assistance

As part of the Venezuelan initiative to assist Caribbean countries with their energy needs, Jamaica's Commerce Minister Phillip Paulwell announced that a technical team from Venezuela would be visiting Jamaica to conclude arrangements for the upgrade of the refinery.

He said, "We are looking at how our refinery could achieve a higher level of efficiency and also be able to export more products to the rest of the region."

Paulwell said that PetroCaribe would help the region's state-owned oil companies set up the necessary infrastructure such as storage and retail outlets, which would allow them to effectively intervene in their markets to minimize retail prices.

The region's retail markets are dominated by foreign companies—with some governments having no capacity to intervene in the market to lower their margins.

"We are looking at Petrojam and the work that we have to do to upgrade and expand it as the first significant achievement of PetroCaribe," he said.

The energy ministers also discussed "the geopolitical and speculative factors that cause serious distortions in energy markets and recognized that the high cost of imported energy is having a debilitating economic impact, which threatens social unrest in oil-deficient Caribbean countries."