Dr. Andrew Wheatley
The government is moving to secure the nation's energy supply as it battles a fallout caused by a recent US government executive order restricting transactions with oil rich Venezuela.
Energy Minister Dr. Andrew Wheatley told the House of Representatives on Tuesday afternoon that the executive order has stalled payments from Petrojam to the state owned oil company in Venezuela because correspondent banks and financiers are exercising greater due diligence in fear of penalties under the US move.
He said this resulted in some payments being held and subsequently released, but since then, no payments are being processed.
Dr. Wheatly told the House that despite high level diplomatic meetings in the US, Jamaica has had no resolution of the matter.
"Our government must now proceed to take the necessary steps to safeguard the viability of our assets, even Mr. Speaker, as we recognise, value, and appreciate the support provided to this country by the Bolivarian Republic of Venezuela to the energy sector over the years," he declared.
Dr. Wheatley said the Jamaican Government is engaging the Government of Venezuela on the issues facing Petrojam, as well as "seeking further intervention at the highest diplomatic and political level in Washington."
The Energy Minister has indicated that the government is examining the possibility of repurchasing Venezuela's 49 per cent stake in Petrojam as part of the move to secure the refinery.
"We are exploring all the options as to whether Jamaica buys back the shares directly or a third party," he said.
Dr. Wheatley said although Jamaica has not been receiving its usual supply from Venezuela, the country has enough oil after buying from Trinidad and Tobago and on the spot market.
And Venezuela's state-run oil company PDVSA has been declared in default by rating agencies Fitch and Moody's.
The news came just hours after the government met investors in Caracas to try to renegotiate its debt.
International credit ratings agency Standard & Poor's has also declared Venezuela to be in selective default.
Standard & Poor's declares a selective default when a country has failed to pay one or more of its financial obligations when it came due.
In the case of Venezuela, the government of President Nicolás Maduro failed to make US$200 million in payments on two global bond issues by November 12, when a 30-day grace period expired.
Standard and Poors says Venezuela is also overdue on four other bond payments worth US$420 million but the grace period has not yet expired on those payments.
Venezuela's total external debt, which also includes loans from countries like Russia and China, is thought to be as much as US$140 billion.