Jamaica News: In an effort to safeguard Jamaica’s energy security, the Government will take legislative action to retake ownership of the 49 per cent shares in Petrojam, which is held by the Venezuelan state-owned oil and natural gas company, PDV Caribe.
At a press conference at the Foreign Affairs and Foreign Trade Ministry in New Kingston today (January 8), Portfolio Minister, Senator the Hon. Kamina Johnson Smith, assured that the action being undertaken is in Jamaica’s best interest.
“Petrojam impacts on all of us. It impacts on private and public transportation. It impacts on our healthcare, our hospitals and our clinics. It impacts on our homes and our business places as well as our current and future investors,” the Minister said.
“For Jamaica to prosper and uplift our people, we must ensure our energy security. The Cabinet has, therefore, determined that decisive action is necessary in the public interest, and Parliament will act within its powers to make laws for the good governance of Jamaica,” she added.
Senator Johnson Smith said the relevant legislation to facilitate the Government’s compulsory acquisition of the shares will be taken to Parliament shortly.
The Minister said that another major development that makes the action necessary, is that the International Maritime Organization (IMO) confirmed that it would not postpone its implementation of regulations setting new fuel specifications.
“As a result, as of January 1, 2020, we will not be permitted to sell Heavy Fuel Oil (HFO) in the form it is currently produced by Petrojam,” she explained.
PDV Caribe, a subsidiary of the state-owned Petróleos de Venezuela SA, and the Petroleum Corporation of Jamaica (PCJ) entered into a joint-venture agreement, which resulted in the sale of Petrojam shares in August 2006 and February 2007.
The agreement entered into was in furtherance of facilitating the upgrade and expansion of Jamaica’s only refinery, which would improve its competitiveness and meet local and international market demands.
However, these specific objectives have not been met, despite Jamaica’s attempts at trying to resolve the matter.
The steps taken to rectify the situation include a high-level government meeting between Jamaica and Venezuela and a commitment given by the South American country to facilitate the upgrades within three months and financial provisions made by Jamaica.
Jamaica also made a formal offer to repurchase the Petrojam shares last year.
Senator Johnson Smith assured that the decision being taken by the Government is not political but “purely economic”, and that the country remains open to further dialogue.
Source: JIS News