Jamaica approached to sell PetroCaribe debt
FINANCE AND Planning Minister Dr Peter Phillips has said the Jamaican Government had been approached by institutions who have expressed an interest in purchasing the country's stock of PetroCaribe debt which now stands at about US$3 billion.
His comments came on Tuesday during a meeting of the Standing Finance Committee of Parliament where Opposition spokesman on finance Audley Shaw quizzed Phillips on whether Jamaica
had been approached to sell its portfolio of PetroCaribe debt on the global money market.
Sold Dom Rep oil debt
Yesterday, The Financial Times reported that the Venezuelan government, in an attempt to raise desperately needed cash and quell growing social turmoil, has reportedly sold debt owed to it by the Dominican Republic and Jamaica to Goldman Sachs at a steep discount.
With oil accounting for roughly 96 per cent of the country's export earnings and 48 per cent of budget revenue, the slump in oil prices has taken a toll on Venezuela's already dire finances.
While admitting that the country had received proposals to sell its PetroCaribe debt, Phillips said he was not in a position to divulge information that was still at the discussion stage.
"From time to time the GOJ receives proposals regarding
liability-management issues and have received proposals in
relation to the PetroCaribe
portfolio from more than one institution," he said.
"We are not in the habit of commenting on potential transactions until they become a reality and that's the situation now but we have been (approached)," Phillips told Shaw during the Standing Finance Committee meeting.
Shaw also wanted to know whether any discounting that may arise from the potential sale of Jamaica's PetroCaribe debt would be passed on to the country. Phillips noted that while he could not respond to the question in the absence of a specific transaction, "in general terms, there would be no interest unless there was a discount sufficient to make it worthwhile".
Additionally, he said, in Jamaica's case, the country would have to be mindful of the commitment that had been made by the Venezuelan authorities to the island and other PetroCaribe partners over the period. He said the country would have to take into consideration Venezuela's particular interest in the matter as well if such a transaction is pursued.
US$3 billion oil debt
There have been reports in the international media that Venezuela's state-owned oil company has sold more than US$4 billion of oil debt owed by the Dominican Republic. This has since triggered speculations as to whether Venezuela is moving to sell the US$3 billion oil debt owed by Jamaica.
Phillips was also asked to comment on the impact of the dramatic fall in the price of oil on the international market on the PetroCaribe arrangement with Jamaica. The finance minister expressed confidence that the PetroCaribe deal between Kingston and Caracas would not change in the medium term based on assurances given by the Venezuelan authorities.
He also pointed out that the reduction in oil prices has not significantly impacted revenue intake from the gas tax, noting that there has been a corresponding increase in demand or usage locally.