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Tag: PetroCaribe

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Crude Oil Government News Oil

Petrojam increases non-Venezuelan imports of crude oil

December 17, 2015

Petrojam, the government of Jamaica and Venezuela-owned refinery in Kingston, indicated on Monday that shipments of crude oil crude from Venezuela have increased somewhat, growing from an average 313,886 barrels imported per shipment between January 1 and December 1, 2014, to 344, 000 barrels per shipment this year.

For the 2014 period, 19 shipments were accepted compared to 18 shipments in 2015.

At the same time, however, the company shows that imports from non-Venezuelan sources have also increased over the period.

Petrojam said Monday that imports from source countries outside of Venezuela and including Mexico for 2015 covered five shipments averaging 323, 000 barrels each.

This compared to three shipments averaging 310,000 barrels in 2014 and in 2013 three shipments averaging 348,000 barrels.

The data on Venezuelan crude imports nevertheless runs counter to assessments made by Barclays Bank which says export of crude to PetroCaribe signatories in the region and Cuba had been cut significantly, analysis which has been widely recycled following last week’s congressional victory by the opposition party in Venezuela.

The repetition has accompanied the position that Venezuela might change the arrangement under which 18 Caribbean countries pay into its purses about half of the cash value of oil imports, then remit the rest over 25 years as a loan repayment at one per cent interest charge.

The report said that shipments to the Dominican Republic and Jamaica, which account for about half of the programme, have dropped 56 per cent and 74 per cent compared to 2012.

But Petrojam indicated by way of data that for Jamaica, at least for the last three years, supply from Venezuela has remained consistent in the main.

Andrew Baker, writing for BNamericas online on December 8, and citing new BNamericas Intelligence Series report said oil subsidies to Caribbean neighbours through the PetroCaribe initiative have cost the country US$50bn over the last decade.

He repeated the claim that “Nicolás Maduro, has quietly halved Petrocaribe shipments to about 200,000b/d from 400,000b/d in an effort to slow the bleeding, while continuing to publicly laud the programme.”

Petrojam, while indicating that it is now lifting more crude from other sources outside of Venezuela, showed that supplies have been consistent since January 2013.

Jamaica Observer

Crude Oil News Oil

No problem with PetroCaribe agreement after Venezuelan election results, says Petroleum Corporation of Jamaica boss

December 9, 2015

No worries for Ja over electoral change in Venezuela — PCJ

Screen Shot 2015-12-09 at 12.16.15

Up to November, Venezuelan president Nicolas Maduro had been promising more under the PetroCaribe programme to Caribbean countries, announcing more resources for the eastern Caribbean.

Now, following the parliamentary victory by Democratic Unity Roundtable (MUD) some expect that changes may be in the offing.

The PetroCaribe programme is an agreement between Venezuela and some Caribbean territories to purchase oil on preferential terms. It allows the Government of Jamaica (GOJ) to convert 40 per cent of payments annually to a loan repayable over 25 years.

The funds flowing from the arrangement are managed by the PetroCaribe Development Fund (PDF).

Despite the debt buy-back executed this year, Jamaica is still heavily reliant on PetroCaribe funds for low-cost budget support.

In July, Venezuela allowed the GOJ, based on the net present value of the debt outstanding at December 2014, to purchase the PetroCaribe debt totalling US$3.2 billion for US$1.5 billion.

But the Ministry of Finance and Planning still remains the fund’s largest borrower.

Some analysts have posited that the escalating budget constraint faced by the Venezuelan government could trigger a drastic amendment of the PetroCaribe arrangement.

However, chairman of the Petroleum Corporation of Jamaica (PCJ) and advisor to the Ministry of Science Technology Energy and Mining (MSTEM) Christopher Cargill says he expects to see business as usual.

“The election was a parliamentary victory. It was not the national election which is due in 2019. No change can be executed to PetroCaribe before the national elections,” Cargill explained.

He said that in retrospect, Jamaicans should show appreciation for the decade-old arrangement.

“I think Jamaicans really need to be grateful for the benefits received over the years,” he stated, citing the avoided pressure on foreign exchange resources.

Others, including US-based analysts, have projected changes in the offing based upon the effect in Venezuela of declining oil revenues where increasing socio-economic chaos has become evident.

Oil accounts for roughly 96 per cent of export earnings, about 40 per cent of government revenues.

Forecasts have placed oil prices to stay at US$60 per barrel on average due through to 2020 owing to levels of supply from OPEC members and the rapid increase in natural gas and shale oil production.

However, Cargill is convinced that the next three years will hold nothing new for PetroCaribe and its client countries.

He anticipates that a subsidiary of Petróleos de Venezuela (PDVSA) will move ahead to honour its promises to upgrade the Petrojam refinery which it partially owns, a move expected to make the company more competitive regionally.

Jamaica, in 2006, signed an agreement with Venezuela through PDV Caribe, a subsidiary of PDVSA for a 49 per cent stake in Petrojam with a subsidiary agreement to move production from an average of 30,000 to 50,000 barrels of petroleum products per day through expansion.

At last report, PVDSA was reviewing proposals received for the upgrade of the petroleum refinery from two Chinese sources.

The refinery currently supplies about 80 per cent of the local non-bauxite market and 70 per cent of the national market.

A 2008 estimate put the project cost for expansion at US$758 million, funds that Jamaica lacked and which Venezuela has been unable to deliver to date.

Jamaica Observer 

Government News Oil

Jamaica Gets Assurance From Venezuela Regarding PetroCaribe

September 10, 2013

 

Minister of Science, Technology, Energy and Mining, Phillip Paulwell, delivering the keynote address at the official opening of the Falmouth Youth Empowerment Computer Access Centre, in Trelawny, on July 25. – JIS Photo

Jamaica says it has been given an assurance by Venezuela that there would be no changes to the existing PetroCaribe agreement for the duration of its four-year programme with the International Monetary Fund (IMF).

Energy Minister Phillip Paulwell met with Venezuela officials in Haiti during the 11th meeting of the PetroCaribe Council of Ministers.

“We put to the government of Venezuela the fact we do have an IMF agreement with certain strictures, and that during the life of this agreement we have to ensure that we do not have any difficulties with other arrangements, and the life of the agreement does go through until 2017.

“So we have put to the Venezuelan government that there be no changes to the arrangement within the PetroCaribe and they have assured us as such,” Paulwell said.

Jamaica was one of the original signatories to the 2005 PetroCaribe initiative, under which Caracas provides oil and energy products to several Caribbean countries that are allowed a deferred financing mechanism, through which a percentage of the costs is made available to their governments as a long-term concessionary loan.

Last month, Caracas also gave the assurance that there would be no increase in interest rates.

In May 2013, the IMF approved Jamaica’s application for a four-year extended fund facility.

The agreement unlocked more than US$2 billion of loan support, including those from the World Bank and the Inter-American Development Bank.

Under the IMF agreement, PetroCaribe remains a critical funding arrangement for the Jamaican Government and Paulwell also disclosed that trade compensation mechanism must be fast-tracked and a major announcement would be made this week concerning a new arrangement for Jamaica to clear its PetroCaribe debts to Venezuela.

“We are also pleased that they have decided to fast-track the trade compensation mechanism that will allow us to trade our goods and services in lieu of payment of the debt in foreign currency,” said Paulwell.

“On Wednesday of this week, we have a very important announcement to make in relation to a hot commodity that will be traded,” he said.

Jamaica Gleaner;

Alternative Energy Electricity Government JPS LNG News Oil Solar Energy

Not enough attention to alternative energy

August 13, 2013

JAMAICA continues to agonise over the cost of electricity and the capacity to pay for its oil imports. This agony started with the first oil price shock in 1973 and the degree of agony has varied with the ebb and flow of oil prices. The country is in the throes of trying to reduce the cost of electricity and the oil import bill.

Much attention is now being devoted to finalising the outcome of the bidding process for an additional 360-megawatt (MW) of electricity at the most competitive price. The Office of Utilities Regulation (OUR) is being lambasted over its handling of the selection of the “best” bidder to undertake the construction of a 360MW-generating power plant to provide additional generating capacity to the national grid. The heightened anxiety is also due to the impending changes in the terms of PetroCaribe, an eventuality that should have been anticipated and prepared for.

Meanwhile, the productive sector continues to be stymied by the high cost of electricity and households are impoverished by their electricity bills. Jamaica has a very high price of electricity at 0.26 USD/kW h, which puts the economy at a substantial disadvantage in being internationally competitive. The cost of electricity has contributed to the deindustrialisation of the country, which is most evident in the manufacturing industry.

Jamaica has a peak daily demand of approximately 600 MW, which is provided through a number of steam and combustion gas turbine plants as well as a few small hydro plants. The Jamaica Public Service Company (JPS) has been the main supplier until fairly recently. About 25 per cent of this generating capacity (197 MW) is supplied by non-JPS sources. JPS has an exclusive franchise on transmission, distribution and retail supply. Almost half the generation capacity is over 30 years old and transmission losses are estimated at 23 per cent.

The real problem is not the JPS, the OUR or rapacious oil-exporting countries. It is the absence of a national energy policy aimed at lowering the cost of electricity by a combination of less expensive alternatives to oil and an increased reliance on renewable energy sources such as solar and wind.

The cost of oil imports during the last 40 years has had little success in prompting the exploration of alternative energy solutions in Jamaica, unlike many other countries for example Germany where solar and wind account for 22 per cent of electricity generation. Wind and solar contributed an insignificant amount of our energy needs despite its potential. In 1995, the PCJ was mandated to develop indigenous renewable energy resources. The Petroleum Corporation of Jamaica (PCJ) established a wholly-owned subsidiary, Wigton Wind Farm Limited (Wigton) in 2000. Wigton is the first commercial wind farm. Electricity purchase agreements allow Wigton to sell electricity to JPS. Solar sources have the potential to save on oil imports but not enough homes and business establishments have installed capacity. This is inexplicable because falling prices have made solar power competitive with conventional sources of energy. In the 1970s solar panels converted sunlight into electricity at a cost of US$70 a watt, but today that figure is less than 80 cents.

Jamaica’s energy crisis is an indisputable failure of successive governments of both political parties. The Jamaican people have paid a high price for this incompetence and mismanagement with little prospect for change for the better.

The Jamaica Observer;

Government News

Paulwell’s Petrojam plan – Upgrade to be done by 2016

July 1, 2013

ENERGY minister Phillip Paulwell has set a deadline of January 2016 for the completion of the expansion and upgrade of the state-run oil refinery Petrojam.

Paulwell, guest speaker on Monday at two Constant Spring Road-based service stations which have introduced the eco-friendly Ultra Low Sulphur Diesel (ULSD) fuel, said the construction had to be along that timetable.

A section of the government-operated oil refinery Petrojam.

“We have been told the new generating capacity of electricity will be in place by January, 2016, so we have to finish the expansion and upgrade of the refinery by then,” Paulwell told Auto.

Paulwell, the minister of science, technology, energy and mining, said he would advance the argument at tomorrow’s PetroCaribe Summit in Nicaragua.

Jamaica is one of 18 countries which benefit from the PetroCaribe agreement, drafted by the now deceased

Government News

Jamaica To Raise Petrojam Upgrade At PetroCaribe Summit

June 26, 2013

A section of the Petrojam refinery in Kingston.
A section of the Petrojam refinery in Kingston.

The Jamaican government says it will establish a “firm” schedule to implement the upgrading and expansion of the Petrojam refinery, as it seeks to make the operations more modern and efficient.

Science, Technology, Energy and Mining Minister Phillip Paulwell, said the issue will be discussed at the 8th PetroCaribe Summit, scheduled for June 29, in Nicaragua.

“We have been talking too long about the upgrade of this refinery, it has been producing for us for close to 40 years. We are now on a firmer path, especially since the new president of Venezuela has assumed office, to pursue some of the things that were not done, over the last five years, including the expansion and upgrade of the Petrojam refinery,” he said.

Paulwell said the government is hoping to move this process a step closer to fruition, with the Venezuelan government having already committed, as part of the economic zone of PetroCaribe, a relationship which will see value added, along with efficiency.

In May, during the PetroCaribe ministerial meeting in Venezuela member states agreed on an economic zone to boost regional development and Paulwell said that Jamaica will eventually produce its own ultra-low sulphur diesel, as this will be synchronised with upgrading of the refinery.

“We are importing this fuel, and it’s not our intention that this will be a long-lasting activity. The day will soon come when we will be producing this fuel in Jamaica.”

2006 agreement

In 2006 Jamaica signed an agreement with Venezuela for a 49 per cent stake in Petrojam, and as part of the agreement, production should have moved from an average of 30,000 to 50,000 barrels of petroleum products daily, starting in 2007, but this output has not yet been realised.

“We are now back on track. We have to update some of the financials, and the first thing the Board has agreed to do, with the support of Venezuela, is to get that front-end engineering design project updated, so that we have figures that are more realistic than the2007/2008 figures,” Paulwell said.

Paulwell said that many of the features of the expansion project are now more positive than they were in 2007, to justify the expansion and upgrading of the refinery.

“It will enable us to produce those things that we use in Jamaica – LPG, gasolene, and low sulphur diesel – so that we will be almost self-sufficient, and be able to export some of it,” he said, pointing out that the by-product, petcoke, will enable the generation of 100 megawatts of cheap electricity.

“What we will be doing this weekend in Nicaragua is to establish the firm schedule towards its implementation and funding,” the minister said.

Upgrading of the refinery will ensure its viability in the long-term and allow for the installation of treatment facilities to meet new environmental specifications for diesel oil, and gasolene.

Additionally, Paulwell said discussions will be held at the Summit on the trade compensation mechanism aspect of the PetroCaribe Agreement, which allows Jamaica to trade goods and services, as part of the process of repaying PetroCaribe loans.

“We have a very significant development, which we hope will be crystallised this week, in Nicaragua,” he said.

Under PetroCaribe, Jamaica and other Caribbean countries benefit from preferential rates on crude oil, refined products, and LPG or its energy equivalent, from Venezuela.

The payment arrangement allows for purchase of oil on market value for 40 per cent up-front, within 90 days. The remainder of the payment can be made over a period of 25 years with one per cent interest, provided that oil prices are above US$40 per barrel.

– CMC

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Alternative Energy Electricity Government News Solar Energy

Get Green! – Opposition Spokesman Mair Proposes All Gov’t Buildings Be Solar Powered

June 3, 2013

Opposition spokesman on Industry, Commerce and Energy Gregory Mair is proposing that the administration make it mandatory for all government buildings to be fitted with solar photovoltaic systems.

“Every government building must have solar panels energising their lights, fans and other equipment. Not only will it bring savings in foreign exchange used by JPS to purchase fuel, but it will also reduce the electricity bills of Government and stimulate the growth of an industry of which Jamaica could become the Caribbean leader,” Mair pointed out during his contribution, last week, to the Sectoral Debate in Parliament.

He also wants the Government to introduce policy to make it compulsory for solar photovoltaic systems to be installed in government-related schemes.

“Let the Government drive demand in solar energy. If done properly, we could see an industry where we have solar photovoltaic panels and solar heating assembly plants exporting to the Caribbean and, by extension, the world,” he added.

Discussing how this project could become a reality, Mair said the Government should make the Petroleum Corporation of Jamaica (PCJ) more efficient.

“As we are aware, the PCJ is funded by the one per cent commission earned from the sale of fuel to Petrojam. The PCJ does not require all this funding and the majority of it should be dedicated to building this industry. It is a win-win all around,” Mair explained.

Turning to the PetroCaribe agreement, Mair argued that Jamaica could pay for fuel purchased under this accord with goods made locally, not only manufactured items but also produce.

According to Mair, Article IV of the PetroCaribe agreement states, among other things, that, “With regard to deferred payments, Venezuela shall be able to accept that the partial payments be done with products, goods and/or services, previously agreed by the parties, based on preferential rates proposed by the Government of Jamaica.”

He noted that Venezuela imported a lot of products and Jamaica had failed to take advantage of this clause of the PetroCaribe deal.

“Our Government should meet with our counterparts in Venezuela, like many other countries have, and agree on the goods we will be selling them in exchange for their fuel. Once this is done, Government should encourage the establishment and expansion of the industries that will capitalise on this arrangement,” the opposition spokesman stated.

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