(Jamaica Gleaner) Venezuelan oil subsidiary PDV Caribe is demanding that the Government of Jamaica (GOJ) pay a minimum of US$50 million (J$6.5 billion) in core share value as compensation for the forcible takeover of its 49 per cent stake in the local refinery, Petrojam.
But The Gleaner understands that the claim includes supplementary add-ons in relation to dividends and prospective value that could bring the total compensation package sought to US$250 million (J$32.5 billion).
The Jamaican Government’s initial offer of US$40 million was rejected by Venezuela and a later proposal of US$50 million also refused.
Yesterday, reliable Gleaner sources said that the GOJ has been sent communication this month on Venezuela’s behalf, through its legal team headed by Queen’s Counsel Michael Hylton.
Hylton could not be reached yesterday evening, but Gleaner sources confirmed the figure.
Jamaica’s Foreign Minister Kamina Johnson Smith also acknowledged that the Government has received communication from Venezuela. However, she said, no lawsuit has been filed.
Through the Compulsory Acquisition (Shares in Petrojam Limited) Act 2019, the Jamaican Government gave itself powers to acquire the 392,490,000 shares owned by Venezuela in Petrojam. After a valuation by Muse Stancil – the full-service, global energy consultancy firm specialising in the mid- and downstream sectors of the petroleum industry – Jamaica expropriated the shares.
Energy Minister Fayval Williams, who replaced Andrew Wheatley on February 14, said Petrojam’s market value was eroded by nearly US$100 million because of a decade of broken promises, delays and inaction by the Venezuelan government.
She told Parliament that Petrojam’s market value was listed at between US$126 million and US$128 million by Muse Stancil in 2006, when Jamaica signed a joint-venture agreement with Petróleos de Venezuela SA (PDVSA), Venezuela’s state-owned oil company and parent to PDV Caribe that was expected to finance a major upgrade of the 55-year-old refinery, among other things.
But Williams said that an evaluation carried out in 2018 by the same consultants listed Petrojam’s market value at US$34 million.
Muse Stancil, however, has remained silent, four months after The Gleaner first sought responses about the massive variance in the sale-as-is price and the investment value.
Sources have said that there is a non-disclosure agreement between the company and Jamaica.