Venezuela's shares in Petrojam being offered for US$100m
A &A Lime Hall Development Limited, a company incorporated in 2004 as a rental service in Montego Bay, St James, has offered PDV Caribe S.A. a subsidiary of Petroleos de Venezuela (PDVSA), US$100 million for its 49 per cent stake in Jamaican oil refinery Petrojam Limited.
In a letter dated January 4, 2019, and addressed to chairman of Petrojam Russell Hadeed and the permanent secretary in the Ministry of Science, Energy and Technology, PDVSA said that it has been encouraging the potential vendor to make a similar offer for the remaining shares in Petrojam, which are held by the Jamaican Government.
Petrojam is jointly owned by the government of Venezuela and the Government of Jamaica (GOJ), with GOJ shares held by the Petroleum Corporation of Jamaica (PCJ).
President of PDVC Marcus Alejandro Rojas Marchena said in the letter that the transaction is subject to a non-disclosure clause but nevertheless noted that the offer was for US$100 million and that his company was encouraging the third-party vendor to make a similar offer for the GOJ shares.
PDV Caribe and the PCJ entered into a joint-venture agreement which resulted in the sale of Petrojam shares to the Venezuelan entity between August 2006 and February 2007.
Marchena said in the January 4 letter that "the proposed transaction is the entirety of the shares of Petrojam owned by PDVC, that is 392,490,000 shares, which amount to 49 per cent of the share capital of Petrojam".
The Venezuelan said that pursuant to Article 20.15 of the joint-venture agreement, "PDVC had taken reasonable efforts to procure an identical offer" from Lime Hall "for the purchase of the rest of the capital of Petrojam owned by the PCJ".
Marchena nevertheless noted that the Jamaican Government had the first right of refusal on the shares and therefore encouraged it to exercise this at the level offered by Lime Hall "as required by Article 20.6 of the joint-venture agreement".
In other words, it would expect an offer from the GOJ close to Lime Hall's US$100-million offer.
Shareholders in Lime Hall are listed as attorneys-at-law Arlene Gaynor and Anesia Lindo, both of St James addresses. Directors are listed as Arlene Gaynor; Paul Seaton, a businessman of St James; and Newton Gaynor, businessman of Bowie, Maryland, United States.
Reliable sources told the Financial Gleaner that Lime Hall was offering to buy the Venezuelan shares on behalf of an entity domiciled in the United States.
Efforts to contact attorney-at-law Arlene Gaynor for clarification were unsuccessful as the number listed on company records delivered a busy signal continuously.
Efforts to get an update from permanent secretary with responsibility for energy in the Office of the Prime Minister, Sancia Bennett Templer, did not succeed up to press time.
The Government last week indicated that it would take legislative action to acquire Venezuela's shares in Petrojam, noting that its offer of US$40 million, followed by another for US$50 million, had been refused.
Venezuela values the refinery at just under US$90 million, which the Financial Gleaner understands includes the initial sum paid for shares at the time of the joint-venture agreement, plus unpaid dividends and retained earnings.
PDV Caribe SA is the company tasked with organising and coordinating PetroCaribe's hydrocarbon transportation network, including its vessels, storage facilities, and port terminals, as well as refining and distribution capacity. PetroCaribe is an energy cooperation agreement signed by 14 Caribbean countries, including Jamaica, which was established to secure a direct oil supply among members. Created in 2005 by Venezuelan state-owned PDVSA, and acting as a subsidiary, PDV Caribe holds interests in several subsidiaries established in each of these countries. PDV Caribe is headquartered in Caracas.