Money in estimates to repurchase Petrojam shares
The Andrew Holness administration has made good on its promise to set aside funds in this year's Estimates of Expenditure to repurchase the 49 per cent shares in Petrojam owned by Venezuelan state-owned oil company PDVSA.
Contingencies amounting to $35.3 billion have been allocated in the 2018-2019 Estimates of Expenditure to repurchase Petrojam shares. The money will also be used for liquidation of arrears in National Housing Trust employers' contribution and recapitalisation of the Bank of Jamaica.
Little more than a week ago, Minister of Science, Technology and Energy, Dr Andrew Wheatley said that the Government would be making the necessary allocation in the Budget to repurchase the Petrojam shares.
Wheatley told journalists at Jamaica House recently that the administration had been in the process of completing a valuation exercise for the state-owned oil refinery.
The energy minister also disclosed that he had engaged his Venezuelan counterpart to make clear the Government's intent to buy back the shares. This, he said, was conveyed in a letter to the minister of energy in the South American country.
Concerns started to increase last year after United States President Donald Trump signed an executive order in August 2017, imposing restrictions on government entities in Venezuela.
Two weeks after the executive order was issued, Petrojam started to receive enquiries from its financiers and bankers regarding its relationship with PDVSA, particularly in relation to the dividend policy, governance structure, and controlling authorities. Queries were also made in relation to the purpose for payments to PDVSA.
Wheatley said that the executive order had created unintended consequences for Petrojam, and the Jamaican Government has been working closely with the US State Department to resolve the issue.