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Jamaican Government giving serious consideration to buying back of PetroCaribe debt

Published:Tuesday | March 3, 2015 | 5:05 PM

A guarded Finance Minister, Dr Peter Phillips, yesterday disclosed that Jamaica is giving consideration to buying back its PetroCaribe debt, which now stands about US$3 billion.

Asked by Ed Bartlett, member of parliament for East Central St James, whether the Government was considering the sale of the debt, Phillips was blunt.

"Can the minister advise us whether the strategy of the PetroCaribe debt buy-back is being considered very seriously by us, having regard to the Dom Rep (Dominican Republic) experience and the fact that Dom Rep was able to purchase at 52 per cent discount and was able, as a result, to clear a significant portion of its outstanding debt ... have we advanced with any of the financial houses, this strategy?" Bartlett asked.

Phillips responded, saying: "The short answer is 'yes', and I am not at liberty to go further because of confidentiality."

The Venezuelan government, in an attempt to raise desperately needed cash and quell growing social turmoil, has reportedly sold debt owed to it to Goldman Sachs at a steep discount.

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 speculation as to whether Venezuela is moving to sell the US$3-billion oil debt owed by Jamaica.

Jamaica's public debt is expected to reach $2.072 trillion at the end of March, but PetroCaribe is not calculated in the amount, based on the way the debt is calculated.

If PetroCaribe were added to the stock of debt, the figure would climb by 8.1 per cent or move to $2.24 trillion.