Thursday, July 17, 2008

Costa Rica ready to join PetroCaribe oil plan

(Photo by Reuters)By Raul Gallegos

CARACAS (Dow Jones) - Costa Rica has formally asked to join the PetroCaribe oil sales agreement, Venezuela's government said Thursday.

By year end, Costa Rica will become the 19th country - including Venezuela - to join the PetroCaribe group from among Central American and Caribbean nations, Venezuela's information ministry said in a statement.

The announcement comes just days after Costa Rican officials attended the V PetroCaribe Summit in Maracaibo as observers. PetroCaribe offers member countries the opportunity to finance as much as 60% of their energy bill for as long as 25 years, paying a 1% fixed interest rate.

Chavez describes the program as solidarity with his neighbors but detractors inside and outside Venezuela label the plan petrol-diplomacy for Chavez's like-minded allies.

Through PetroCaribe, Venezuela appears to be extending its influence over a region with historically close ties to the U.S. and where U.S. oil companies still have a dominating presence.

Costa Rica would join its neighbors Honduras and Belize, which already receive crude products from Venezuela under the agreement. Guatemala joined over the weekend and is expected to receive crude derivatives soon.

Costa Rica consumes roughly 55,000 barrels of crude a day, according to Venezuelan figures, and 40% of that comes from Venezuela's oil industry.

The Central American country's membership would become official during PetroCaribe's December meeting. Costa Rica will discuss a temporary accord, however, so it can begin to receive crude products under special conditions as soon as possible, the statement said.

The PetroCaribe plan, originally launched by President Hugo Chavez, also contemplates $14.7 billion in investment to upgrade or build new PdVSA refineries in those nations, as well as a $112 million fund to finance infrastructure projects in the region.

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