Jamaica to use legislation to retake Petrojam shares from Venezuela

Syranno Baines, Gleaner Writer

The government is to retake the 49 per cent stake held by Venezuela in state-owned oil refinery Petrojam.

Speaking at a press conference this morning Minister of Foreign Affairs and Foreign Trade Senator Kamina Johnson Smith said the government will enact special legislation to sanction the move.

“It will not be a general piece of legislation which allows for acquisition of property rights, other than land, beyond the scope of the transfer of ownership of the 49 per cent shares in PetroJam currently held by PDV Caribe,” said Johnson Smith.

PDV Caribe, an affiliate of the state-owned Petroleos de Venezuela S.A., 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 respectively.

The reasons for entering into the agreements included the upgrading and expansion of the refinery to improve its competitiveness and meet local and international market demands.

Johnson Smith said these objectives have not been met and that this poses a risk to the economy.

Further, she outlined that Prime Minister Andrew Holness and senior members of the Cabinet including then Energy Minister Dr Andrew Wheatley met with Venezuelan President Nicolás Maduro in May 2016 where a commitment was made by the South American leader on the upgrading of Petrojam.

Johnson Smith further disclosed that after signing a Letter of Intent in January 2017 and a refinery upgrade agreement in February 2018, Venezuela has not fulfilled its obligations.

She noted, too, that Jamaica made a formal offer to buy back the Petrojam shares in March 2018 in Caracas.

According to her, the attempts have been unsuccessful.

The foreign minister declared that Jamaica’s decision to retake the Petrojam shares was in no way political but “purely economic”.

“….But it has become clear that the shared priority and interest in Jamaica’s energy security, which drove PCJ and PDVSA to work together to operate and upgrade Petrojam, no longer exists,” said Johnson Smith.

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