Prime Minister Andrew Holness and Opposition Leader Dr. Peter Phillips
The Jamaican Government has given Venezuela until the end of a Parliamentary debate on a bill to compulsorily acquire its 49 per cent share in Petrojam to sign a sale agreement or face takeover.
That debate is now taking place in the House of Representatives, ahead of the Bill going to the Senate.
Speaking in the debate, Prime Minister Andrew Holness said time had run out for further negotiations.
The Petrojam shares are held by PDV Caribe, which is a subsidiary of Venezuelan state-owned company PDVSA.
Mr. Holness pointed out that when PDV Caribe acquired the 49 per cent stake in Petrojam, it was agreed that it would work with the Petroleum Corporation of Jamaica (PCJ) to upgrade the refinery.
He said 12 years later, the refinery has not been upgraded, is operating inefficiently, and will soon lose its largest customer, the Jamaica Public Service Company.
He also outlined that things have further deteriorated given current sanctions by the United States of America.
Mr. Holness said since the decision to buy back PDV Caribe's shares, the government has used various channels to try to get the Venezuelans to sign an agreement, including meetings between himself and Venezuelan President Nicolas Maduro, and the use of intermediaries, including other heads of state.
He said it is the government's last resort to acquire Venezuela's Petrojam shares through a takeover.
"The decision has not been taken lightly and is being pursued against the background, which makes it plain that Jamaica does not have the luxury to wait any longer. At this juncture, and within the context of these considerations, the government will acquire the 49 shareholding in Petrojam Limited, wherever it may be held, for the public purpose of securing Jamaica's energy by way of enactment of legislation," he revealed.
However, he gave the Venezuelans one last chance to have the matter resolved amicably.
"...Were they to sign the draft share agreement before this debate is concluded today, the Government of Jamaica would be willing to suspend this process and sign the agreement as well. Furthermore, after this debate closes and it goes to the Senate and a similar call should come, we would be prepared to withdraw the bill," he declared.
Mr. Holness told the House of Representatives that he will disclose the price to be paid for the shares at the end of the debate.
He also explained that, given the US sanctions which prohibit doing business with the Venezuelan government, the money for the shares would be placed into an escrow account for payment at a later time.
Mr. Holness sought to reassure investors who might be worried by the takeover, noting that this action "does not reflect any change in our free market base policies or our belief in property rights." Instead, he explained that the matter with Venezuela is a "specific, isolated matter, brought about by a confluence of circumstances, including the huge financial risk of running afoul of sanctions."
The Prime Minister also reiterated that there are no political motives behind the takeover, contending that is was solely economical.
But Opposition Leader Dr. Peter Phillips was not convinced the shares have to be acquired now.
"You don't have to wait 12 more years. I am saying to you, you can wait til May because there is no decision that you are going to take between now and then, or which you ought to take until your committee has reported," he argued.
Dr. Phillips contended that with the Petrojam Review Committee yet to deliver its report on Petrojam, the government could later find that it had overpaid for the shares or should not have bought them.
Dr. Phillips also said it was not clear what immediate plans the government has for Petrojam.
He suggested the government look for other solutions for the problems being faced by Petrojam.