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Jun 24, 2016

Petrocaribe Celebrates Eleven Years in Belize

John Mencias

Petrocaribe is celebrating eleven years in Belize, following the signing of an agreement with Venezuela on June twenty-ninth, 2005.  The dream of former President Hugo Chavez was to promote regional harmony and relieve financial difficulties in Latin America and the Caribbean in the face of rising oil prices.  The agreement allows for the direct sale of petroleum products, including diesel, gasoline, LPG and lubricants, on concessionary financing terms from PDVSA.  Belize has benefited tremendously from the financial assistance offered.  For the better part of the last three years, Petrocaribe has been a cash cow for the Government of Belize.  While those funds have depleted considerably and Venezuela remains in political turmoil, the program continues…that is, for now.  Ahead of its eleventh anniversary, Deputy Chairman of APBEL, John Mencias spoke on the history of Petrocaribe and the progress it has made in Belize.

 

John Mencias, Deputy Chair, APBEL

“The Petrocaribe program is a government to government arrangement and it is a means by which Venezuela provides favorable financing towards the country of Belize for the development of energy projects and other related projects.  And as you all know, the program started in 2005.  We got our first shipment in 2006 and then the program stopped in 2009.  Now because it is a commercial arrangement, each of the countries designated a private entity to work with each other or to coordinate with each other.  On Venezuela’s side that company was PDVSA.  We had to form a company here in Belize and that company was Belize Petroleum and Energy Limited, BPEL for short.  And so basically it was that PDVSA sold fuel products, petroleum products to BPEL and BPEL then distributed them within Belize.  Back in those days Esso was the company that was responsible for distribution and they did not agree to distribute the products on behalf of Petrocaribe so the government was able to arrange with a company from Big Creek to supply fuel into the country.  But naturally, they couldn’t compete with Esso and they managed to get almost about eighteen percent of the market.  So what happened as a result of that, the Petrocaribe program, we were unable to get financing for the entire country.”

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