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Apr 25, 2014

PetroCaribe doing big things in Belize

The Petrocaribe initiative took its first baby steps in Belize in 2005, but fizzled out in 2009. It was reloaded in Belize in 2012, and to say that the Jewel is reaping major financial dividends would be an understatement. Today, the head office of Alba Petrocaribe Belize Energy Ltd. officially opened its doors in Belize City. The company, dubbed APBEL, is a joint venture between Venezuela’s PDV Caribe and Belize Petroleum and Energy Limited. The joint venture has been put in place as the conduit between Venezuela’s oil company, PDVSA and the government of Belize, managing the flow of petroleum products and money. Mike Rudon was at the opening this morning and has the story.

 

Mike Rudon, Reporting

Venezuelan dignitaries, invited guests from the region, government officials and petroleum stakeholders were in attendance at the opening of APBEL’s head office this morning. Venezuela and Belize have maintained good relations for a quarter of a century, and that relationship is giving the jewel a major financial boost, where it needs it most.

 

Yoel del Valle Perez Marcano

Yoel del Valle Perez Marcano, Venezuelan Ambassador to Belize

“This initiative offers the possibility to this company to develop more activity in Belize and develop the relationship with Venezuela and Belize not only in relation to energy, but also in other activities – economic and social activity, education social and commercial activities.”

 

Prime Minister Dean Barrow

“The agreement is for the direct sale from Venezuela to Belize of petroleum products, including diesel, gasoline, residual fuel oil, LPG and crude oil and lubricants, and the sale is on concessionary financing terms – that is, the sales are actually at market price, since Venezuela can’t sell for less under its OPEC obligations, but the terms on which Belize pays the market price for the products are highly concessionary. Thus, we do not pay the full price up front. A portion of each invoice evidencing our purchase of the different oil related products is retained by Belize and treated by Venezuela as a long term loan. While we eventually must repay that loan, we do so when the oil sells at the sort of price at which it is now trading, over twenty five years, and at an interest rate of only one percent.”

 

G.O.B. only pays cash for forty percent of the products it receives, which means that it has access to sixty percent. If that doesn’t get your attention, there’s this – since 2012, the government of Belize has seen a bonanza of one hundred and three million, six hundred and thirteen, five hundred and fifty-six dollars – US. That’s more than two hundred and seven million dollars in just two years, to be used on projects which directly benefit Belizeans.

 

Dean Barrow

Dean Barrow

“The Ministry of Finance is responsible for the money as the Ministry of Finance is responsible for the entire consolidated revenue fund of Belize. The Petrocaribe flows go to our account at the Central Bank and form part of the consolidated revenue fund. Draw-downs from the Petrocaribe flows are a matter of record both at the Central Bank and at the Ministry of Finance and the projects that are funded by the Petrocaribe flows are projects in relation to which work done is done by way of contracts that are crafted by the professionals when it comes to infrastructure in the Ministry of Works and that go to the Contractor General for approval. So that it is entirely transparent and above board and our partners who form part of the APBEL joint venture know exactly how the money is being disbursed.”

 

Prime Minister Dean Barrow says that the one percent interest rate will remain stable, and maintains that the only way this could get any better is if Venezuela gave us the money as a grant.

 

Dean Barrow

“Ultimately there can hardly be any downside to getting monies that you have to repay over twenty-five years at one percent. There is no way when you feed that into the debt mix that you can come out at a disadvantage.”

 

With the future of petrocaribe funds looking so bright, the PM is pulling out his shades and is looking at revisiting the ominous and infamous superbond.

 

Dean Barrow

“We may well have to look seriously at the possibility of a debt buy back with respect to the superbond. In other words, using Petrocaribe funds, one percent over twenty-five years, to buy back superbond debt which will go up to six point whatever, almost seven percent, is an option, is another arrow in our quiver.”

 

When the initiative first started in Belize, petroleum products were supplied primarily to the south of Belize. In this remix, Puma Energy Belize is a big player which ensures that petrocaribe oil is supplied across the country. Mike Rudon for News Five.

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4 Responses for “PetroCaribe doing big things in Belize”

  1. Ricky Malthus says:

    How about GOB not collecting fuel taxes/replacement taxes to benefit all Belizeans directly and immediately, and also to spur investments which will assist the employment situation. Come on people, think!!!

  2. Rod says:

    This pm and gov will sit down with the devil himself if they know they will get money half this money will go into the pockets of this pm and his ministers and the rest will be stolen by the people at the bottom this pm and gov. Are just big thieves period. Why is this pm sitting with murderers this Venezuelan president and gov. Have killed hundreds of people and have locked up thousands more I guess murderers hang together murderers and thieves hang together birds of a feather .

  3. venus says:

    Since it is so good GOB should consider dropping the taxes on fuel thereby reducing the burden on the productive sector of Belize.

  4. Harmilo says:

    It will be interesting to know who owns the building that is housing the PetroCaribe office….

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