The San Jose Accord, an
energy cooperation programme for Central American and Caribbean Countries, arose out
of the need to help reduce the heavy oil import burden on
non-oil
producing countries in the region.
The Accord is a Venezuela/Mexico oil facility initiated in 1980 when the international oil market was experiencing its second shock. The PCJ negotiated on behalf of the Government of Jamaica. Under the agreement, Mexico and Venezuela, under concessionary financial terms, provide up to 29,000 barrels of crude oil per day to Jamaica.
Under the original
Agreement, there was provision for 20% of the cost of
the crude oil to be made available as a low interest
loan for development projects when the price of oil
exceeds US$15 per barrel. The Agreement is reviewed
annually and the terms have been modified, making the
Accord less concessional.
The Accord provides
for:-
- Quota allocation to
be made to the importing country each year, based on
the quantity supplied the previous year.
- Deferred payment on
20% of the cost of the crude, to be made available
to the government as a low interest loan for
development projects.
- If development
projects are not achieved, then the 20% deferred
payment is to be settled within five (5) years.
- Petrojam refinery to
process crude oil under the Agreement.
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In October, Venezuela
proposed a major energy deal to supply oil to the tune
of 80,000 BS/D to ten (10) Central American and
Caribbean States, including Jamaica.
The agreement
which complements the San Jose Accord of 1980 is dubbed
the Caracas Energy Agreement and will establish
preferential price levels and percentages for financing
long term low interest loans to the various countries
based on the quantity of oil purchased. Loans will range
from 10-25% of the payment for the oil based on the
prices paid. There is a one-year grace period with
payments extending over 15 years at an interest rate of
2%.
Jamaica will
be able to access some 7.4 million barrels of oil
annually between $15 - $30 per barrel and pay 80% of the
cost upfront and convert the other 20% into a soft 15
year loan.
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 ARPEL
- (Assistencia Reciproca Petrolera Empresarial
Latinoamericana) is an oil and gas forum with membership
of oil companies in the Latin American and Caribbean
region. It fosters economic, commercial and technical
relations with the purpose of creating favorable
business opportunities. PCJ became a member in 1985.
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The Latin American
Energy Organization (OLADE) is an international public
cooperation, coordination and advisory entity,
established on November 2, 1973 with the signing of the
Lima Agreement which was ratified by 26 countries of
Latin America and the Caribbean. Jamaica is a member
country. Olade's secretariat is in Quito, Ecuador.
Some of the objectives
of OLADE are:-
- Promoting bilateral
and multilateral energy integration
- Promoting the most
appropriate and economical means to ensure energy
supply and integration
- Promoting actions
between member countries to develop and defend the
natural resources of the respective countries and
the region as a whole
- Promoting technical
cooperation, exchange, and dissemination of
scientific, legal and technical information.
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