PetroCaribe roll back on oil?

Last week we reported on the decision of OPEC to keep production levels of petroleum constant despite falling market prices, which reportedly hurts the generous program of the Bolivarian Republic of Venezuela with Caribbean and Central American countries, including Belize.

On the heels of reports of securitization of ALBA/Petrocaribe debts, there is news hitting closer to home. According to Prime Minister Dean Barrow, Venezuela has said it will no longer sell premium oil to Belize as of the end of the month.

He discussed the news with reporters today.

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vlcsnap-2014-12-09-05h40m29s164Prime Minister Dean Barrow

“What I am concerned about is that, I don’t know if you’d been told, but Poderosa has indicated that they will not any longer be able to supply us with premium, I think starting either now [or] certainly at the end of the year. So in effect that is a cut back of the program.

I believe that the amount of premium is only like 15% of the total volumes that we get. But it clearly represents a roll back, and I have indicated on the last occasion, I utterly and completely understand. What we will do, to try and make up some of that 13% or 15% loss, whatever it is, is to have, certainly,  government vehicles only use regular. People who know say to me that that’s marketing, premium being better that regular.”

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While Government vehicles will no longer be pampered, the Government is confronting the suddenly sober reality that the Petrocaribe days may be fast coming to an end.

Prime Minister Barrow reassured the press corps as to where Belize stands on honoring its debts to Venezuela under the program.

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Prime Minister Dean Barrow

We’ve been paying cash and it’s taken us a while to work out the bartering thing, and so if we can’t work it out now, it’s not a big deal. We are happy to service the debt by a way of cash.”

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Reporter
“If they were to securitize it, I can’t imagine the new owner of the debt would be agreeable to a 1% interest rate, which is what it currently is at.”

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Prime Minister Dean Barrow
“Well, we’d have to see what the deal is with that sort of thing. Clearly, there are changes and I am saying that we are prepared to deal with the changes. It has been a lovely run. If it comes to an end, certainly it’s in its current form, we’ll roll with the punches.”

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