by Linda Straker
- PetroCaribe was an oil alliance involving Venezuela and several Caricom states
- More than EC$370 million is owed to Venezuela
- PetroCaribe’s debit is 11.5% of GDP
Foreign Affairs Minister Joseph Andall said on Tuesday that the Government of Grenada has held preliminary discussions with the Government of Venezuela with a view to repaying more than EC$370 million that is owed to the South American nation.
“Venezuela was another one we had fruitful bilateral relations with. They indicated that soon they will be resuming the PetroCaribe agreement. This could not have come at a better time considering the generally high price of fuel on the international market,” Andall said at the Government’s news conference.
Andall shared information about his recent trip to the USA to attend the United Nations General Assembly. Various fringe and or bilateral discussions were conducted by himself and other government officials who attended the General Assembly. The discussion with Venezuela was centred on the PetroCaribe debt.
“We are also indebted to Venezuela through the PetroCaribe agreement and initial discussions have taken place regarding a mechanism for amortizing that debt,” he said. The latest Grenada Public Debt Bulletin published by the Ministry of Finance shows PetroCaribe’s debit is 11.5% of GDP.
At the end of the first quarter of 2022, apart from 3 State Owned Enterprises (SOE), the total debt stock (unaudited) of SOEs was approximately EC$466 million (14.3% of GDP). “This is inclusive of the debt obligations of Petro Caribe, which was EC$372.1 million (11.5% of GDP).” The publication explains that domestic and external SOE debts were 60.6% and 39.4% respectively at the end of the first quarter of 2022.
PetroCaribe was an oil alliance involving Venezuela and several Caricom states. The alliance was founded in June 2005. Through that agreement, Venezuela offered those in the alliance oil supplies based on a concessionary financial agreement.
The payment system allowed for the purchase of oil at market value for 5%-50% up front with a grace period of one to 2 years; the remainder can be paid through a 17–25-year financing agreement with 1% interest if oil prices are above US$40 per barrel. That agreement disintegrated in 2019.
