Barbados is to sign the Petrocaribe II oil deal with Venezuela “in the near future”, Acting Minister of Foreign Affairs Jerome Walcott has confirmed.
The move ends an 18-year-long diplomatic stalemate between Bridgetown and successive leftist regimes in Caracas over the regional oil procurement pact that offers member states oil supplies on a concessionary financial agreement.
The deal appears to be a byproduct of Bridgetown’s hosting of the resumption of talks that on Tuesday culminated in a series of guarantees for free and fair elections for a new president in Venezuela next year, potentially paving the way for a possible ease in sanctions imposed by the United States.
The talks resulted in concessions between the Maduro administration and the Opposition Unitary Platform of Venezuela – a partial agreement on the promotion of political rights and electoral guarantees for all and a partial agreement for the protection of the vital interests of the nation.
Walcott said Tuesday’s signing also has significant implications for the Caribbean Community (CARICOM), which has benefited from the Petrocaribe oil deal since 2005.
He said Barbados was hoping it would be able to sign on to an agreement that would not be the deal in its current form, but “something different”.
“The conclusion of these negotiations and what they portend, has major significance not only for the people of Venezuela but also for all Caribbean states where there is recognition of the Caribbean Sea as a zone of peace,” said Walcott.
“Now that the process has been concluded and Venezuela moves towards regaining its economic independence, we are looking forward in the very near future to a Petrocaribe II arrangement.
“Just as dialogue has brought a positive outcome in this process, we, as members in the Caribbean Community, look forward to continued dialogue with Venezuela on matters of regional interest.”
When the initial Petrocaribe arrangement was introduced in 2005 by Maduro’s predecessor Hugo Chavez, Barbados opted not to join the deal as it was, though not ruling out the possibility of joining in the future. In 2011, two years before his death, Chavez again renewed the offer to Barbados to join Petrocaribe. A month after his death, in April 2013, under the new Bolivarian Alliance for the Americas (ALBA) umbrella, Bridgetown again declined to join.
At that time, Petrocaribe aimed to go beyond oil trade and promote economic cooperation but the deal fell apart by 2019 as oil production dwindled amid intensifying civil strife in the country.
At its height, Petrocaribe encompassed 18 countries – 12 CARICOM nations, Cuba, Dominican Republic, Guatemala, Honduras, Nicaragua and Venezuela.
The original Petrocaribe agreement created a payment system to allow for the purchase of oil at the market rate for five per cent to 50 per cent upfront with a grace period of one to two years; the remainder would be paid through a 17-25-year financing agreement with one per cent interest if oil prices rose above US$40 per barrel. The financing agreement intended to create the space for member countries to plough oil purchase funds into development projects.
The disclosure from Walcott comes three months after Prime Minister Mia Mottley indicated that the current Petrocaribe deal did not work for Barbados, but a 35 per cent discount was now on the table.
The matter was discussed during the 45th CARICOM Summit in Trinidad and Tobago in July.
The peace talks in Bridgetown leading up to the signing of the agreements between the warring political factions in Caracas were facilitated by Norway since they began in Mexico City, Mexico on August 13, 2021. Prior to that, Barbados served as host country with Norway facilitating the talks in 2019.
In welcoming the room of delegates from around the world to witness the signing at the Lloyd Erskine Sandiford Centre, Walcott said the key to the process was ensuring the communication channels were kept open.
Members of the diplomatic corps were present for the occasion including the representatives of Mexico, Argentina, the United States, Russia, the European Union, the United Kingdom, Brazil and France.
“This is a message that Barbados and its regional neighbours have been repeating in all regional and international fora, that it is never too late to dialogue. Venezuela has always been helpful to the Caribbean whenever energy crises have loomed,” said the acting foreign minister.
Noting that the next few months will be very important for the South American nation, Walcott said: “Barbados pledges its support as you implement the provisions of the agreement. We stand ready to play our part.”
Officials are hoping that once the Maduro administration lifts bans on opposition candidates and announces an election date, the US will announce a lifting of some sanctions on Venezuela’s oil business.
It is expected that once fair elections are held to international standards next year, Washington will announce a further ease of the sanctions.