Guyana’s long term oil debt to Venezuela at US$580M – Report

A Venezuela news report has tagged Guyana’s long term oil debt to the Spanish-speaking territory as being around US$580M. The El Nacional report yesterday came as Venezuela joined with representatives of 18 countries that participate in the PetroCaribe pact, to celebrate the tenth anniversary of the energy cooperation agreement. The arrangements of the deal has proven a boon to many of the PetroCaribe countries but Venezuela’s Government has been facing growing internal pressure to adjust what the Opposition  described as being too generous. According to oil analysts, it has meant great economic losses for the country. “The benefit has been solely political. PetroCaribe has allowed the government to be shielded from international bodies such as the Organization of American States, for instance. It maintains a financial relationship with a number of benefits to other countries and that helps you get votes when needed, “said economist and university professor Luis Oliveros. Oliveros’ calculations, based on data from Petroleos de Venezuela, detailed that between 2006 and 2014 the country sent an average of 186,000 barrels of oil per day through PetroCaribe, an amount that has been declining in the past two years. The bill for oil sold to these countries is nearly US$50B but not all the money has been collected. According to Oliveros, Venezuela is owed nearly US$30B dollars for shipments made under the arrangements. Under the PetroCaribe arrangement, which is adjusted in relation to oil prices, financing can be up to 80% of the total payable within a period of 25 years with an interest rate of between one percent and two percent, with a two-year grace. In addition, the part of the bill to be paid in cash has not been canceled only with cash. Several countries are paying in rice, spice, coffee and other products. According to the El Nacional report, one of the beneficiaries of the PetroCaribe agreement is Guyana, which is currently also facing claims by Venezuela for parts of the Essequibo county and its fishing waters. The border claims were recently revived after explorations by US-owned ExxonMobil, which found significant evidence of oil and which potentially holds up to 1.5 billion barrels of oil, according to Governance Minister Raphael Trotman, who is responsible for natural resources. Guyana has been paying Venezuela in rice and cash for the oil supplies. Another of the most indebted countries is Haiti, with a bill totaling nearly US$2B. Jamaica and Nicaragua also joined the countries that have received more domestic oil by the agreement. They each owe more than US$3B. However, Venezuela’s biggest customer under PetroCaribe will be Cuba. Between 2006 and 2014, Havana received between 45 percent and 60 percent of the 186,000 barrels per day that Venezuela sent via PetroCaribe. Cuba, in turn, has paid part of the bill through sports, medical and intelligence assistance.