BELIZE AND VENEZUELA SIGN OIL AGREEMENT
June 09, 2006
Government’s oil company, The Belize Petroleum and Energy Limited and Petroleos de Venezuela signed the articles and memorandum of association of a joint venture company to be registered as ALBA Petrocaribe Belize Energy Limited. The signing ceremony was held yesterday. A Government press release says the new company will be the investment arm of B-P-E-L and P-D-V-S-A. This joint venture company will be governed by a Board of Directors which will be drawn from both parent companies. All major policy decisions must receive mutual consent. The new company aims to increase Belize’s level of energy security by construction or enhancing infrastructure geared to receive petroleum products from Venezuela under the umbrella of the Petrocaribe agreement. Under this agreement the Government of Belize is able to obtain financing as only 60 per cent of the cost of petroleum purchased from that country is paid at the time of purchase when petroleum is over fifty U S dollars per barrel. The Government of Belize may retain 40 percent of the cost as financing which can be channeled to projects aimed at alleviating poverty in Belize. The financing would then be amortized after a two year grace period over 23 years at one percent per annum. Belize has been unable to benefit fully from this agreement as it lacks storage facilities for refined petroleum products. Crescencio Sosa Chairman of Belize Petroleum and Energy Limited signed on behalf of Belize while Alejandro Granado Ravelo Vice President of P-D-V-S-A signed on behalf of the Venezuelan company. Petrocaribe is an initiative of Venezuelan president Hugo Chavez. The Venezuelan delegation leaves Belize today.