Jamaica spurns call to halt refinery takeover

Jamaica rejected a request by Venezuela's political opposition to drop its takeover of Venezuelan national oil company PdV's 49pc stake in the island's refinery, foreign minister Kamina Johnson Smith said.

The request was made by a PdV ad hoc administrative board appointed by Venezuela's self-declared interim president Juan Guaido.

Jamaica's parliament approved the takeover of the refinery stake in February 2019, asserting that PdV had reneged for years on a plan to upgrade the 35,000 b/d facility to 50,000 b/d, and that this delay had threatened the plant's economic viability.

The ad hoc board said Jamaica has expropriated the company's asset. The parallel PdV board appointed by Guaido said Jamaica should "preserve the shareholding," and "should not maintain any kind of relationship with the illegitimate regime of Nicolas Maduro."

Guaido also wrote Jamaica's prime minister Andrew Holness, saying "only the legitimate government of Venezuela, under the control of the National Assembly, can represent the interests of PdV in Jamaica," according to an opposition statement.

Jamaica rebuffed the petition. "Jamaica now owns the shares in Petrojam in their entirety," Johnson Smith said. "We passed legislation in order to give this effect. It was not a negotiated agreement. We passed legislation and the shares have now vested. So there is no question about completing a transaction."

Guaido is president of the Venezuela's opposition-controlled National Assembly. His interim presidency, meant to displace sitting president Nicolas Maduro, is recognized by over 50 countries, including the US.

Jamaica's government, in common with several other Caribbean island nations that previously benefitted from Venezuelan oil aid, is not among those who recognize Guaido. Nonetheless, Kingston voted in a January 2019 session of the Washington-based Organization of American States not to recognize Maduro's presidency.

An unspecified amount of money has been placed in an escrow account to pay for the PdV shares in the refinery, Johnson Smith said, without indicating the institution that is holding the funds or the name of the account holder. But the implication of the escrow account is that the funds would eventually become available to PdV, which ever way Venezuela's power struggle eventually shakes out.

Jamaica had allocated $280mn for the PdV stake under budget plans published in February 2018. But Petrojam's value has been "severely eroded" by the delay in upgrading the refinery, energy minister Fayval Williams said in March 2019.

"As far I am aware, PdV has not made a claim," Johnson Smith said, referring to the Maduro-appointed company board.

Jamaica's state-owned oil company PCJ owns 51pc of Petrojam. PdV and PCJ agreed in 2008 to expand Petrojam's capacity and install new units to produce cleaner products.

The PdV refinery stake is a legacy of Venezuela´s flush years when late president Hugo Chavez promised to upgrade multiple overseas refineries.

None of the pledges came to fruition, leaving majority partners or government owners in Jamaica, the Dominican Republic, Curacao and Aruba, among other countries, with [abandoned projects](https://www2.argusmedia.com/en/news/1919617-trinidad-moves-past-venezuela-to-tap-border-gas?backToResults=true_.

Jamaica plans to close the refinery and convert the site to a fuel import terminal at the end of 2019 if it fails to carry out an upgrade, the energy ministry said in March 2019.