General / Weekend News

New Petrocaribe office opens; Venezuela commits to expand relations

By Aaron Humes, Freelance Reporter

The opening on Friday of a local office of Petrocaribe on Coney Drive, Belize City is, according to the Venezuelan Government, an indication of plans to expand relations between Belize and Venezuela.

This will come in the form of the building of linkages in education, economic and social development and other sectors. It follows a 25-year long diplomatic relationship between our two countries and Venezuela has assisted us in poverty alleviation and promotion of national development using its own most bountiful resource – petroleum.

According to Minister of Foreign Affairs Wilfred Elrington, we have been looking closely at the efforts of Venezuela and its fellow South American states like Brazil and Argentina to make deliberate efforts to address the social welfare of their peoples and their brothers and sisters in the Caribbean and Central America.

Venezuelan Ambassador to Belize Yoel Perez Marcano earlier amplified those views by declaring that Venezuela considered states like Belize its “brother.” Later, he noted that Venezuela was from the very beginning a supporter of Belize’s right to independence from the United Kingdom, and that while subsequent governments have built up relations with Belize, the “Bolivarian Revolution” of the late president, Hugo Chavez, represents the greatest such stride.
Belize first joined Petrocaribe in 2005 but the program was limited only to the South and fizzled out in 2009.

Prime Minister Dean Barrow’s administration restarted the initiative in 2012, and since then some $190 million in petroleum sales from Venezuela has accrued to Belize. The Government, through the special-purpose company Alba Petrocaribe Belize Energy Limited (APBEL), a joint venture between Belize Petroleum and Energy Limited (BPEL), a state-owned energy company, and PDV Caribe, the official subsidiary of Petroleos de Venezuela S.A. (PDVSA), now buys all of Belize’s supply of petroleum products from Venezuela. The Government has subcontracted the purchases to PUMA Energy Belize, a subsidiary of Trafigura, which buys from PDVSA,

In 42 months – September 2012 to March 2014 – Belize has imported more than 1.42 million barrels of oil but only pays upfront for 40 percent of it. The remainder, now approaching US$103 million, is treated as a long-term loan payable at one percent interest over 25 years, with a two-year grace period, although the terms are dependent on the average purchase price per barrel. The money is kept at the Central Bank of Belize, and under the guidance of the Ministry of Finance, is used for projects that have as their goal, ameliorating poverty and improving the quality of life for Belizeans.

Barrow told The Reporter that for now the Government is focusing on its extensive infrastructure drive countrywide, with streets being rebuilt in all major municipalities. A $20 million investment from those funds also went into the National Bank of Belize. The Government prefers, he said, to use the money for “capital projects,” paying for poverty alleviation programs like the BOOST Cash Transfer and Food Pantry Program out of local recurrent revenue. The Prime Minister added that the Government is keeping most of the money for a “rainy day,” to address such contingencies as compensation for the nationalization of Belize Telemedia Limited (BTL) and the Belize Electricity Limited (BEL). In addition, the government is also weighing using it to buy back debt from the restructured Superbond.

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