Energy officials from the Caribbean and Venezuela agreed Friday to create a new company that will provide cheaper oil in the region as a way to counter high crude prices.
Ending a two-day conference in the resort town of Montego Bay, officials said recent spikes in world oil prices threatened to provoke “social unrest” and economic ruin for cash-strapped Caribbean countries.
The new company, called PetroCaribe, was proposed by Venezuela to offset high oil prices by distributing crude and refined oil products to the Caribbean at lower prices than other dealers in the area.
But few details emerged from the conference, including a date for when the company might take shape or how much the region might save. Officials agreed to create a commission led by Venezuela to study the plan and said there would be a follow-up meeting in the Bahamas in November.
“PetroCaribe should be a catalyst for the introduction of alternative approaches to market access … and correction of the various pricing inequities that prevail in some markets,” officials said in a joint statement.
Jamaican officials had said Thursday that Venezuelan Oil Minister Rafael Ramirez was at the conference, but on Friday they said he had canceled his trip. Venezuela’s deputy director of hydrocarbons, Ivan Orellana, attended instead, officials said.
It was not clear why Ramirez canceled his appearance, though he was in Venezuela on Friday participating in public celebrations of Venezuelan President Hugo Chavez’s defeat of a recent recall referendum on his rule. Venezuelan officials were not immediately available for comment.
After soaring to a record US$49 per barrel last week, oil prices have fallen steadily in recent trading as worries over world supply subside. The October contract for light crude settled at US$43.18 per barrel, up 8 cents, on the New York Mercantile Exchange on Friday.
The Organization of Petroleum Exporting Countries indicated Thursday that it might seek to push prices down further, possibly by increasing production.
Venezuela’s plan could have big benefits for countries like Jamaica, which imports more than 90 percent of its energy. The island’s fuel bill is expected to jump 23 percent this year to US$1 billion (Jamaican US$60 billion).
The countries participating in this week’s talks were: Antigua and Barbuda, the Bahamas, Barbados, Belize, Cuba, Dominica, Grenada, Guyana, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago.
Venezuela, the world’s No.5 oil exporter, also proposed establishing a fund to provide grants for health, education and housing programs in the Caribbean.
The South American country says it produces more than 3 million barrels of oil a day. Some analysts say the amount is closer to 2.5 million.