ALBA Docs

THIRD PETROCARIBE’s SUMMIT -VENEZUELA & SAINT VINCENT AND THE GRENADINES


PETROCARIBE AGREEMENT OF ENERGETIC COOPERATION BETWEEN THE GOVERNMENT OF THE BOLIVARIAN REPUBLIC OF VENEZUELA AND THE GOVERNMENT OF SAINT VINCENT AND THE GRENADINES


The Government of the Bolivarian Republic of Venezuela and the Government of Saint Vincent and the Grenadines.

Considering the creation of PETROCARIBE, on 29th June 2005, as an organism facilitator of policies and energetic plans, aimed to integrate Caribbean peoples through the sovereign use of natural and energy resources, in direct benefit of its citizens;

Reaffirming the close friendship and cooperation ties existing between the Government of the Bolivarian Republic of Venezuela and the Government of Saint Vincent and the Grenadines;

Acknowledging the indispensability of actions of cooperation and solidarity between the Government of the Bolivarian Republic of Venezuela and the Government of Saint Vincent and the Grenadines, and their essential nature in order to achieve our mutual objectives of socio-economic progress in a setting of peace and social justice;

Recognizing the need to adapt to the changing conditions of the hydrocarbon markets;

Agree to execute the “PETROCARIBE Agreement of Energetic Cooperation”, specified as follows:


Article I

The Government of the Bolivarian Republic of Venezuela will directly provide the Government of Saint Vincent and the Grenadines with crude, refined products and LPG (Liquified Petroleum Gas) or its energetic equivalents, to a monthly average of one thousand barrels per day (1.000 b/day). The supply will be subject to evaluation and adjustment according to the evolution of the acquisitions made by the Government of Saint Vincent and the Grenadines, the availability of the Government of the Bolivarian Republic of Venezuela, the decisions adopted by the OPEC (Organization of Petroleum Exporting Countries), and any other circumstance that may force the Government of the Bolivarian Republic of Venezuela to adjust the quota allocated through this Agreement. The quantities specified in the present Agreement will override those stipulated by existing agreements on energetic matters between the Government of the Bolivarian Republic of Venezuela and the Government of Saint Vincent and the Grenadines.


Article II

The Government of the Bolivarian Republic of Venezuela and the Government of Saint Vincent and the Grenadines agree to instruct their chosen energy companies to constitute a joint venture.

The Government of the Bolivarian Republic of Venezuela designates and instructs PDV CARIBE S.A. as their chosen energy company for the constitution of a joint venture, and the Government of Saint Vincent and the Grenadines will designate the energy company to be created to this effect and with the same objective.

The joint venture to be constituted by PDV CARIBE S.A. and the company created by Saint Vincent and the Grenadines to this effect will be the only authorized companies to act within the present Agreement and to carry out purchases, sales, administration and supply and control of funds.

The Government of Saint Vincent and the Grenadines will be responsible for the social inversion.


Article III

The supply provided by the Government of the Bolivarian Republic of Venezuela to the joint venture, in accordance with this Agreement, will be subject to the commercial policy and practice of PDVSA (Petroleum of Venezuela, S.A.), who will 
regulate the supply, according to the quota established by the Government of the Bolivarian Republic of Venezuela. At the request of the National Executive, PDVSA will administer any application on the basis of the quota established in this Agreement.


Article IV

The Government of the Bolivarian Republic of Venezuela, in conformity with the supply quota established by the present Agreement, will make available financing schemes under the following conditions: a grace period of two (2) years for the repayment of capital, and an annual interest rate of two per cent (2%). The amount of applicable financial resources and the financing period will be determined according to the following scale:

 

Current purchase prices (FOB-VZLA) per barrel (USD)

 

 

Determining factor of financial resources (%)

 

 

Financing period (years)

 

 

>15

 

 

5

 

 

15

 

 

>20

 

 

10

 

 

15

 

 

>22

 

 

15

 

 

15

 

 

>24

 

 

20

 

 

15

 

 

>30

 

 

25

 

 

15

 

 

>40

 

 

30

 

 

23

 

 

>50

 

 

40

 

 

23

 

 

>100

 

 

50

 

 

23

 

 

 


The joint venture will be invoiced on the basis of the international market’s current referential prices.

The share requiring full payment must be paid within ninety (90) of issuing the Bill of Landing. No interest will be applied to the first 30 days of this period. An annual interest rate of 2% will apply to the remaining 60 days of this period. The Government of the Bolivarian Republic of Venezuela reserves the right to present shipments to the port of entry, in which case the financing will only cover the product’s value (FOB-VZLA), while the cost of chartering must be paid in full immediately following unloading.

When oil prices exceed $40 per barrel, the repayment period will increase to 23 years, plus a grace period of two years, totaling to a total repayment period of 25 years, and reducing the interest rate to 1%. With regards to the share to be settled by deferred payment, the Government of the Bolivarian Republic of Venezuela may accept payment in specific assets, to be mutually determined, for which the Government of Saint Vincent and the Grenadines will offer preferential prices.

The products acquired by the Government of the Bolivarian Republic of Venezuela at preferential prices may include the specific assets that the parties approve, and may be affected by the commercial policies of wealthy countries.


Article V

Interest repayment and asset amortization related to debts contracted by the joint venture may take place through the use of mechanisms of commercial compensation, if and when required by the Government of the Bolivarian Republic of Venezuela.


Article VI

To the effects of this Agreement, the turnover financed by the Government of the Bolivarian Republic of Venezuela will be dedicated to Saint Vincent and the Grenadines’ internal consumption. Turnover will be ratified on every occasion by the Government of the Bolivarian Republic of Venezuela.


Article VII

It is expressly agreed by the signatory parties of this Agreement that to the effects of financing, and in applicable circumstances, the aggregate turnover specified by the Agreement of San Jose and the present Agreement of Energetic Cooperation, shall not exceed the Saint Vincent and the Grenadines’ internal consumption.


Article VIII

The turnover resulting from the application of the present Agreement will not have any effect on the financing mechanisms established by the Agreement of San Jose, since they are different instruments of cooperation. In this respect, the joint venture will notify PDVSA of the volume of sales required within the context of the present Agreement.

Article IX

A fund will be created with the contributions of both financial and non-financial instruments,
as established by the PETROCARIBE Agreement of Energetic Cooperation, signed on 29th June 2005 in the city of Puerto La Cruz, Bolivarian Republic of Venezuela. The contributions made to this Fund may originate from financial and non-financial bodies; they wil stem from financed oil bills and the assets derived from direct trade.

The resources of this Fund will be used by the Government of Saint Vincent and the Grenadines to promote social and economic development, foster the creation of employment, increase productive activities and public services including health, education, culture and sports, thus converting the benefits derived from PETROCARIBE into a contribution against poverty, unemployment, illiteracy and lack of medical attention, which must benefit all sectors of the country’s population, especially those in greater need.


Article X

The Government of the Bolivarian Republic of Venezuela, by means of the Ministry of Energy and Oil and PDVSA, will be the executant of this Agreement, responsible for the establishment of any mechanisms and procedures required for its implementation.


Article XI

The present Agreement will come into force following the ratification of this instrument, and will remain in force for a period of one (1) year, being automatically renewed for equal and successive periods.

The present Agreement may be amended or abrogated when its is so required by the Government of the Bolivarian Republic of Venezuela. In this event, the Government of Saint Vincent and the Grenadines will be notified in writing and by diplomatic means, with thirty (30) days notice. Any query or controversy arising from the interpretation or implementation of the present Agreement will be resolved by the direct negotiations of both parties, through their diplomatic bodies.


Article XII

It is expressly agreed by the signatory parties that the present Agreement is an extension of the Caracas’ Agreement of Energetic Cooperation, subscribed by the Government of the Bolivarian Republic of Venezuela and the Government of Saint Vincent and the Grenadines on 19th October 2000. In this respect, the dispositions established in articles FIRST and FOURTH of the present Agreement substitute articles FIRST and FOURTH of the Caracas’ Agreement of Energetic Cooperation, subscribed on 12th December 2001.

Subscribed in the city of Montego Bay, Jamaica, in two copies of equal content, in Spanish and English, on 6th September 2005.

 


On Behalf of The Bolivarian    On Behalf of the Government of 
Republic of Venezuela     Saint Vincent and the Grenadines

Hugo Chavez       Ralph Gonsalves
        Prime Minister

 

(Translation for Portal ALBA by Damaris Garzón)

 

 

Original document:

http://www.alternativabolivariana.org/pdf/Acuerdo_San_Vicente.PDF