Venezuela wants to expand oil diplomacy despite falling prices

Venezuela wants to expand oil diplomacy despite falling prices
14/12/2014 – 20:32
By Daniel Trotta

HAVANA (Reuters) – Venezuelan President Nicolas Maduro told leftist
allies from Latin America on Sunday he wanted to expand the Petrocaribe
programme of providing oil at preferential terms, even as falling oil
prices add more stress to the Venezuelan economy.

Speaking in Cuba at a summit of the leftist ALBA bloc of nine countries
from Latin America and the Caribbean, Maduro did not mention the impact
of a 46 percent decline in oil prices since June.

Instead, the leader of the OPEC country spoke of expanding the 18-nation
Petrocaribe, even as Petrocaribe has struggled to keep up supplies.
Shipments fell 11 percent in 2013 to the lowest level since 2007,
forcing beneficiaries to turn to other sources.

“Petrocaribe, what it must do at this stage, is consolidate, strengthen,
grow and deploy itself with even more strength,” Maduro said.

Former Venezuelan President Hugo Chavez created Petrocaribe in 2005 to
help neighbours cope with rising energy costs, letting them finance 60
percent of their purchases.

But Venezuela’s capacity to serve as benefactor to the region has
suffered with its economy, which is in apparent recession with inflation
at 60 percent and foreign reserves shrinking. Seven ALBA countries are
also in Petrocaribe.

Maduro’s comments reflected the defiant yet optimistic tone of the
summit, at which leaders criticized the United States for its
52-year-old economic embargo against Cuba and more recent sanctions
against Venezuela. Passed by the U.S. House of Representatives on
Wednesday, they were imposed after 43 people were killed in violence
following anti-government street protests earlier this year.

The summit marked the 10th anniversary of the formation of ALBA, the
brainchild of Chavez, who died last year, and retired Cuban leader Fidel
Castro.

Maduro, Nicaraguan President Daniel Ortega, Bolivian President Evo
Morales and other leaders from the region attended the summit, which was
led by Cuban President Raul Castro.

Absent was Ecuadoran President Rafael Correa. Correa also missed a
special ALBA summit on Ebola held in Cuba in October.

Financially strapped Venezuela is considering a plan to raise cash by
selling billion of dollars of Petrocaribe debt owed to it for 40 cents
on the dollar or less, according to a Wall Street analyst with knowledge
of the deal.

Venezuela would sell $7 billion (4.45 billion pounds) worth of
Petrocaribe debt from the Dominican Republican and Jamaica to Wall
Street for $2 billion to $3 billion in cash up front, converting
outstanding invoices for oil shipped into bonds.

(Reporting by Daniel Trotta; Editing by Catherine Evans)

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