Costa Rica is on the brink of entering into an international agreement known as Petrocaribe that would guarantee the supply of petroleum into the country at a comfortable financing rate.
Last month, a summit meeting for members of this accord was postponed due to scheduling issues with the leaders of the participating nations.
During that meeting Costa Rica was set to be officially introduced as its newest member.
Petrocaribe, an agreement set in motion by Venezuelan president Hugo Chávez in June 2005, provides oil under preferential terms to member countries in the Caribbean and Latin America.
“Petrocaribe offers a series of advantages to Costa Rica and we cannot ignore that fact,” said Roberto Dobles, head of the Environment, Energy and Telecommunications Ministry (MINAET). “The idea is to have a break during those high-priced oil periods.”
Under Petrocaribe, Dobles said, there are long-term benefits as well as short-term advantages.
A long-term benefit is the financing offered by the accord. Venezuela currently finances 60 percent of the total amount purchased.
This allows member nations to pay the debt back over a 25-year period at a 1 percent annual interest rate.
The short-term benefit extends the payback term for the remaining 40 percent from 30 to 90 days.
Even though the price of a barrel of oil has dropped significantly to about $47 per barrel, from a high of $147 last year, Dobles said this would not affect the accord’s terms for member nations.
In addition, Dobles insisted the key advantage to entering this deal lies with the security of having an oil supply at all times.
“Venezuela guarantees the supply of oil to the members of Petrocaribe before all of its other clients,” Dobles said.
Furthermore, the amount of money Costa Rica would save by entering such accords would be determined by the market scenario at the time of purchase, Dobles said.
Petrocaribe is both a bilateral agreement between Costa Rica and Venezuela and a multilateral agreement among Costa Rica and the other 18 member nations. The agreements still need to be ratified by the Costa Rican Legislative Assembly before they take effect.
“We hope this will be a speedy process,” Dobles said.
The current 18 members signed on to Petrocaribe are Antigua and Barbuda, the Bahamas, Belize, Cuba, Dominica, the Dominican Republic, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, St. Kitts and Nevis, Saint Lucia, San Vicente and the Grenadines, Suriname, and Venezuela.
The last member summit was held last July in Maracaibo, Venezuela where members of the Costa Rican government, such as Dobles, Foreign Minister Bruno Stagno and José León Desanti, president of the National Oil Refinery (RECOPE), attended as observers.
Dobles would not discuss how much oil the country would buy from Venezuela once it has entered into the agreement, saying that issue is still under discussion. However, Dobles said Costa Rica wants to obtain a higher amount of diesel fuel, which would benefit the transportation sector.
Presently, Costa Rica buys about 18,000 barrels of petroleum products from Venezuela each day.
The date for the Petrocaribe summit meeting where Costa Rica will be officially presented as the next member has not been determined yet.
President Oscar Arias, Dobles, Stagno, Desanti and Finance Minister Guillermo Zúñiga plan to be present at this meeting.
Venezuela is among the top 10 oil exporters in the world. Its oil revenues account for about one-third of the country’s gross domestic product. Venezuela delivers about 85,900 barrels to its Petrocaribe members daily.