Notes From The Margin

December 11, 2007

BNOC GM Points Out The Obvious – Petro Caribe Is A Debt Trap!

We are applauding a statement by the current General Manager of the Barbados National Petroleum Company on the “gift with strings” that is Petro Caribe.

 Ron Hewitt, Barbados National Oil Company General Manager said on Monday, that Chavez’s Petrocaribe is not helping Caribbean countries, but making their finances worst. ” Petrocaribe is not helping at all to coup with the high oil prices, Caribbean countries are just running a large debt with Venezuela. “


Petrocaribe is just a scheme to create an oil dependency from Venezuela, added Hewitt at the two-day Caribbean Energy conference at the Hilton Trinidad in Port Spain.


“It doesn’t’t represent what we are looking for in Barbados. You have to pay part of the cost now and get a credit. That credit then goes onto your national debt. It’s not an asset….” Hewitt said.

 It is scary that the other Caribbean countries could not see this from the outset.  What is remarkable is that Barbados has been pilloried in all sorts of regional fora for not signing on. The truth of the matter is that Petro Caribe does NOT help the Caribbean, it is NOT in the Caribbean’s best interest. It simply gives Venezuela power over a key sector of our economies and increases our debt. Further the condition of accessing the “concessions” mean that Venezuela will have power over the supply chain so that it will be difficult for those in the Net to escape it.



  1. […] Company makes a statement “on the ‘gift with strings' that is Petro Caribe, Notes From The Margin says: “The truth of the matter is that Petro Caribe does NOT help the Caribbean, it is NOT in […]

    Pingback by Global Voices Online » Barbados, Venezuela: Petro Caribe — December 12, 2007 @ 2:31 pm | Reply

  2. Indeed, I was at the very outset supportive the GoB for their insight into this “no-deal” of an offer. My two points still stands

    1: It makes no sense purchasing future consumption on credit.

    2: There is a real and also an imaginitive geopolitical angle to this offer that makes it an offer to refuse.

    Comment by Adrian Hinds — December 12, 2007 @ 5:38 pm | Reply

  3. Marginal:

    Economist have a saying that “resources are fungible”. The crucial issue may be how does a country finance its imports. If it is running a major balance of payments deficit, alternative financing of a commodity that is a significant element in its import bill may provide some scope for restructuring its debt. Ultimately, the issue is whether the resources freed up are put to productive use. Hewitt’s comments do not seem to credit the decision-makers in CARICOM who have signed on to Petrocaribe with the ability to work out the numbers.

    Petrocaribe, obviously, does not reduce the cost of the country’s oil imports, although, if the financing terms are sufficiently concessionary, in net present value terms it might. Given the fact that all CARICOM countries except Trinidad and Tobago are net oil importers they are dependent on external sources or supply, and therefore there will be associated geopolitical implications. It may be largely a matter of choice of on whom or what the dependency is created.

    Comment by Linchh — December 12, 2007 @ 7:03 pm | Reply

  4. Ron, looking a Gift horse in the mouth?

    Comment by Anonymous — December 13, 2007 @ 4:18 pm | Reply

  5. Linchh,

    Well yes resources are fungible, that does not change the base of the thing in that you are taking on debt to finance what is a current expense. In a business or in a country this is not sustainable.


    Comment by notesfromthemargin — December 13, 2007 @ 6:55 pm | Reply

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