Embassy of the Republic of Guyana, Caracas Venezuela

Quinta Los Tutis, Segunda Avenida entre Novena y Decima Transversal, Altamira, Chacao, Caracas, Venezuela
Telephone: 58-212-267-7095; 58-212-261-7745
Fax: (58) 212 976-3765
embguy@cantv.net

ENERGY COOPERATION AGREEMENT PETROCARIBE

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We, the Heads of State and / or Government, gathered in the City of Puerto la Cruz, Venezuela, within the framework of the Energy Meeting for the creation of PETROCARIBE:

1. WELCOME the initiative of the President of the Bolivarian Republic of Venezuela for the creation of PETROCARIBE, the fundamental objective of which is to contribute to the energy security, the social and economic development and the integration of the Countries of the Caribbean through the sovereign use of energy resources based entirely on the principles for integration referred to as the Bolivarian Alternative for the Americas (ALBA);

2. RATIFY the commitments assumed at the First Meeting of Energy Ministers of the Caribbean held in Caracas, Venezuela, on 10 July 2004 and at the Second PETROCARIBE Meeting of Energy Ministers held in Montego Bay, Jamaica, from 26 to 27 August 2004;

3. AGREE that, for the Latin American and the Caribbean region, integration is an essential condition for striving to achieve development in the midst of the increasing creation of large regional blocks occupying major positions in the world economy;

4. CONCLUDE that only integration based on cooperation, solidarity and the common will to advance to higher levels of development can help fulfil the needs and aspirations of the peoples of Latin America and the Caribbean while allowing them to preserve their independence, sovereignty and identity;

5. REITERATE that the objective of PETROCARIBE is to help in the transformation of Latin American and Caribbean societies by making them fairer, more educated, participatory and harmonious nations. For this reason, PETROCARIBE has been conceived as an integral process intended to promote the eradication of social inequalities and to foster improved living standards and more effective participation by nations in their efforts to shape their own destiny;

6. RECOGNISE the need to adopt measures, within the context of PETROCARIBE, based on a special and differentiated treatment for the Latin American and the Caribbean countries exhibiting less relative development, and on complementarity and cooperation between the countries of the region;

7. GUARANTEE absolute respect for the principles governing the equality of States, sovereignty, non-interference in internal affairs, free determination and the right of each nation to freely determine the social, economic and political systems of its choice

8. CONCERNED about global economic trends and particularly about the policies and practices which now prevail in industrialized countries and which may lead to a greater marginalization of the smaller countries of the Third World whose economies are heavily dependant on foreign countries;

9. GIVEN the special circumstances of heavily indebted poor countries, all terms and conditions of the applicable financing arrangements will be determined through bilateral discussions with such countries;

10. RECOGNISE the importance of Trinidad & Tobago as an energy exporting country of the CARICOM as a reliable source of supply;

11. WE HAVE ACKNOWLEDGED that, within the context of an unfair economic order inherited from colonialism, and imposed by the wealthy developed and rich countries, the current global energy-related trends marked by the enormous waste of consumer societies, by the reduced availability of production capacities and by speculation leading to the rise in hydrocarbon prices, have all continuously exerted a negative impact on both the economic performance of, and the social conditions in the countries of the Caribbean. In most cases, the exports of these countries have been even more seriously affected by the fall in the prices of their products, mainly agricultural products, such as sugar, bananas and others. In view of this situation, the countries of the Caribbean need to possess reliable sources of energy and must be assured that prices will not represent an obstacle to their development. For these reasons, we, the Heads of State and / or Government, have agreed to sign this:

AGREEMENT

On the basis of this Agreement, it has been decided to immediately create PETROCARIBE as a body aimed at facilitating the development of energy policies and plans for the integration of the nations of the Caribbean through the sovereign use of natural energy resources to directly benefit their peoples. In this regard, PETROCARIBE will be responsible for coordinating and managing all issues associated with the energy-related links between the signatory countries in accordance with this Agreement.

In order to guarantee the achievement of these objectives and given the dynamic nature and complexity of the energy issue, PETROCARIBE emerges as an organization capable of ensuring the coordination and harmonization of energy policies, including oil and oil-derivatives, gas, electricity and the efficient use of these resources, technological cooperation, training, development of energy infrastructure and the harnessing of alternative sources of energy such as wind, solar and other kinds of energy.

I. INSTITUTIONAL PLATFORM

In order to achieve its objectives, PETROCARIRE shall be furnished with a Ministerial Council formed by the Ministers of Energy or their equivalents and assigned the following functions:

* Coordinate relevant policies, strategies and plans;

* Delegate functions and responsibilities to the agencies created for the fulfilment of specific tasks, whenever necessary;

* Agree on and approve issues of absolute priority to the organization, as well as studies, workshops and work sessions, with a view to providing the necessary technical and legal support for these issues;

* Exercise its fullest authority with regard to the performance of the Executive Secretariat;

* Agree on the admission or withdrawal of members whenever required.

The Council of Ministers shall appoint a President and a Deputy, who shall call and chair the meetings. Regular meetings shall be held once per year and special meetings shall be held as often as needed.

PETROCARIBE shall also posses an Executive Secretariat ascribed to the Ministry of Energy and Petroleum of the Bolivarian Republic of Venezuela and assigned the following functions:

* Prepare the agendas of the meetings of the Council of Ministers;

* Directly manage and administer PETROCARIBE-related affairs;

* Ensure the implementation and follow-up of the decisions adopted by the Council of Ministers and submit the relevant reports and recommendations;

* Prioritize the studies and projects defined by the Council of Ministers;

* Propose the allocation of resources for the performance of all necessary studies.

II. ALBA CARIBE FUND FOR SOCIAL AND ECONOMIC DEVELOPMENT

In order to help foster the social and economic development of the countries of the Caribbean, PETROCARIBE shall have at its disposal a Fund earmarked for the financing of social and economic programs and consisting of contributions from financial and non-financial instruments. Such contributions may, upon agreement, be drawn from the financed portion of oil invoicing and the savings from direct trade.

This fund shall be called the ALBA-CARIBE Fund.

In order to activate the ALBA-CARIBE Fund, the Bolivarian Republic of Venezuela shall contribute an initial capital of Fifty Million Dollars (US$50 million).

III. OPERATING ASPECTS

1. With a view to commencing operations, Petroleos de Venezuela (PDVSA) has created a special-purpose affiliate under the business name of PDV CARIBE.

2. Upon beginning its operations, this affiliate shall possess adequate cargo capacity for covering its various supply-related obligations.

3. Freight expenses arising from these operations shall be charged at cost price, which represents additional savings for the signatories to this Agreement.

4. PDV CARIBE shall guarantee a direct trade relationship without intermediaries in the supply process. This arrangement shall help generate additional savings for the consumer countries.

5. To this end, PDV CARIBE shall also be responsible for organizing a logistics network of ships, storage facilities and terminals. This will include, whenever possible, refining and distribution facilities for fuels and products. Priority shall be given to countries in greatest need.

6. This affiliate shall adopt training programs designed to strengthen professional capacities and to promote a non-contaminating, more energy-efficient and more rational use of conventional energy and of renewable energy.

IV. FINANCING MECHANISMS AND COMPENSATIONS

Apart from the benefits set forth in the San José Agreement and in the Caracas Energy Cooperation Agreement, the Bolivarian Republic of Venezuela shall extend credit facilities to the countries of the Caribbean exhibiting less relative development on the basis of bilaterally fixed quotas.

2. Long-term Financing

PRICE PER BARREL	(%) PERCENTAGE TO BE FINANCED
>= 15 dollars per barrel	5
>= 20 dollars per barrel	10
>= 22 dollars per barrel	15
>= 24 dollars per barrel	20
>= 30 dollars per barrel	25
>= 40 dollars per barrel	30
>= 50 dollars per barrel	40
>= 100 dollars per barrel	50

With regard to financing, the grace period provided for in the CEA shall be extended from one to two years.

3. Short-term Financing

The portion to be paid in the short-term shall be extended from thirty to ninety days.

4. Deferred Payment

The same bases of the Caracas Energy Cooperation Agreement shall apply for 17 years (including the 2-year grace period mentioned), provided that the price per barrel remains below 40 dollars.

Should the price per barrel exceed 40 dollars, the payment period shall be extended to 25 years, including the 2-year grace period specified at 1% interest. With regard to deferred payments, Venezuela shall be able to determine the portion that shall be paid with goods and services for which it shall offer preferential rates.

The products that Venezuela may purchase at preferential rates may include certain items such as sugar, bananas or other goods or services to be determined that are believed to be affected by the trade policies of rich countries.

V. ENERGY EFFICIENCY

One essential feature of the objective of PETROCARIBE shall be to add energy saving programs to supply-related agreements. In this regard, PETROCARIBE may arrange credits and exchange technologies to enable beneficiary countries to develop highly functional energy-efficient programs and systems, as well as other measures making it possible for them to reduce their oil consumption and to provide a wider range of services.

VI. THE ACTORS

Within the framework of PETPOCARIBE, state bodies shall be required to implement energy-related operations. Venezuela offers technical cooperation to support the creation of state agencies in countries not possessing qualified state institutions for this purpose.

This Agreement is signed in two original and equally authentic copies drafted in English and Spanish in the City of Puerto la Cruz, on 29 June 2005 by:

Willmoth Daniel
Deputy Prime Minister of Antigua and Barbuda

Leslie Miller
Minister of Trade and Industry of the Bahamas

Vildo Marin
Minister of Health, Energy and Communications of Belize

Fidel Castro Ruz
President of the State Council and the Government of the Republic of Cuba

Roosevelt Skerrit
Prime Minister of Commonwealth of Dominica

Leonel Fernandez
President of the Dominican Republic

Keith Mitchell
Prime Minister of Grenada

Samuel Hinds
Prime Minister of the Cooperative Republic of Guyana

Percival Patterson
Prime Minister of Jamaica

Ralph Gonsalves
Prime Minister of St. Vincent and the Grenadines

Petrus Compton
Minister of Foreign Affairs, International Trade and Civil Aviation of St. Lucia

Earl Asim Martin
Minister of Public Affairs and Energy of St. Kitts and Nevis

Jules Rattankoemar Ajodhia
Vice President of the the Republic of Suriname

Hugo Chavez
President of the Bolivarian Republic of Venezuela