Jamaica to take over Venezuela’s 49% stake in Petrojam

The Government of Jamaica has announced that it will take legislative action for ownership of the 49 per cent share in the local oil refinery, PetroJam, held by Venezuelan state-owned oil and natural gas company, PDV Caribe.

Speaking at a press conference yesterday Minister of Foreign Affairs and Foreign Trade Senator Kamina Johnson Smith said the government will enact special legislation that will allow it to forcibly retake the stake held by Venezuela.

“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,” Foreign Affairs and Foreign Trade Minister, Johnson Smith, told journalists.

The decision comes after uncertainties in addition to failed attempts by the Government to get Venezuelan state-owned oil and natural gas company, PDV Caribe, to hold up its end of a joint-venture agreement which resulted in the sale of PetroJam shares in August 2006 and February 2007 respectively.

The agreement had called for the upgrading and expansion of the refinery to improve its competitiveness and meet local and international market demands, but Johnson Smith said these objectives were not met and that this poses a risk to the economy.

“During all this time, Venezuela had become increasingly impacted by domestic and hemispheric challenges, and still is…But it has become clear that the previously shared interest in and prioritisation of Jamaica’s energy security, which drove the PCJ and PdVCaribe to agree to operate and upgrade Petrojam together, no longer exists,” she said.

She told reporters that Prime Minister Andrew Holness had led a delegation including then Energy Minister Dr Andrew Wheatley that held talks with Venezuelan President Nicolás Maduro in May 2016 where Caracas gave a commitment to upgrading Petrojam.

“Even as the government of Jamaica acknowledges, values and appreciates the tremendous support provided to this country by the Bolivarian Republic of Venezuela to the energy sector over the years, Jamaica regretfully cannot continue negotiations in perpetuity, especially where it appears that delays are of no concern to our counterparty.

“Therefore, in the national and economic interest of Jamaica, the decision has been taken to commence the legislative process towards acquiring the shares in Petrojam held by PDV Caribe,” said Johnson Smith.

In March last year, a government statement said that the attempt to take full control of Petrojam followed the decision by US President Donald Trump to issue Executive imposing sanctions targeting the Government of Venezuela and its state-owned entities.

Wheatley told Parliament then that since the Trump announcement “the relationship between Petrojam Limited and PDVSA has come under intense scrutiny, both locally and internationally.