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Saturday 17 August 2019
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Exploring geographic, cultural, historical, commercial possibilities

There remains business opportunities in Venezuela even though the South American nation is in the midst of a protracted economic crisis; including President Nicolas Maduro’s December 11 announcement that the country’s highest denomination bank note (100-bolivar) is being taken out of circulation to stop gangs hoarding the currency.

Prime Minister (PM) Dr Keith Rowley says tourism, timber and oil refining were identified as possible business opportunities for Trinidad and Tobago (TT) businesses, based on discussions during his Official Visit to Venezuela last Monday (December 5).

“We are heavily dependent on oil and gas but if there are other areas of activity that we can engage in, which have economic benefit, then we would want to; with the co-operation of our neighbour (Venezuela), see what is possible. What we have done today is shine a light on a very strange development, where TT and Venezuela have so much in common and so much to benefit from (via) co-operation.”

The PM was in Caracas that day to sign an historic Government-to-Government agreement with Maduro, one which allows TT’s National Gas Company (NGC), Venezuela’s PdVSA (Petr?leos de Venezuela, SA) and international giant, Royal Dutch Shell, to work together on the delivery of natural gas from fields offshore Venezuela’s north eastern coastline to Point Lisas, where the gas would be processed and sold.

Although both countries are a mere “seven miles apart” Rowley noted that “at the level of two States, we have not properly explored the benefits of our geographic, cultural, historical and commercial possibilities. Today’s signing opens that door to that stairway of progress. So we think that we’ve had a good day in Venezuela and we think it would have been a good day for TT and Venezuela.”

The PM was addressing the media contingent which had accompanied him on the Official Visit, during a press conference at the VIP Lounge, Piarco International Airport, late on the evening of December 5 following his return to Trinidad.

Tourism via ferry

Venezuela’s Tourism Minister, Marleny Contreras, was part of the roughly hour-long private talks at the Presidential Palace, Caracas that day. She proposed, Rowley shared, a ferry service between Trinidad, the resort and ‘shopping’ island of Margarita and the capital, Caracas.

“Venezuela is keen to be a jumping-off point for South America into TT...We agreed that there’s a lot of benefit for both countries for us to remain in communication by way of air and sea. The Venezuelan Tourism Minister raised the possibility of sea transport from TT to Margarita and Caracas, if only for tourism purposes in the first instance.”

Business Day asked if the venture was discussed in more detail, to which the PM replied, “Not yet. We not at that stage. It’s simply an idea that we’ll have to look at.”

Business Day also asked if and if TT’s existing ferries; used on the inter-island route, would be ‘drafted into service’ on the proposed Venezuela route.

“Certainly we can’t use our ferries for that,” Rowley declared, “because our ferries are committed to internal use but if we talk about expanding tourism by way of sea, and there’s a market for that and so on, these are business ideas that can find place on the discussion table. What we do now, we can’t replace that with any expansion into other areas.”

Minister Contreras may have proposed a tourism ferry service as a way to boost Venezuela’s tourism numbers, which have fallen over the last seven years or so.

According to the May 30 BBC article titled, “Second airline suspends flights to Venezuela”, “The largest airline in Latin America, Latam, says it is suspending its flights to Venezuela because of the worsening economic situation. The suspension came a day after Germany’s Lufthansa said it would suspend its services to the country. The German company said Venezuela owed it millions in ticket revenues.”

The BBC article continued, “Several airline companies have said that currency controls in Venezuela made it impossible for airlines to convert their earnings into dollars and send the money abroad. In a statement, Latam airlines said it would suspend its operations to Caracas airport ‘temporarily and for an unspecified time’. It said flights on its Sao Paulo to Caracas route would end first, within days, and the other routes it runs to Caracas from Lima and Santiago would be halted by the end of July.”

TT’s State-owned Caribbean Airlines Limited (CAL) is also owed millions by Venezuela; TT $315 million.

However, as reported in Newsday on December 7, Dr Rowley said “(Maduro) has committed to liquidating some long-standing debt which exists for CAL.”

The PM noted that this debt had “accumulated at an earlier time when tickets were sold and paid for in Bolivars and the conversion to US was a difficult thing. A significant debt exists and grew up.

“The (Venezuelan) Government, by way of the presidential commitment today undertook to have that debt serviced.”

Venezuela also put a new arrangement in place “where tickets out of Venezuela are paid for, not in Bolivars but in US dollars, so this accumulation of an unpaid or un-payable debt would not (recur),” Rowley told reporters.

Plywood industry

Venezuela’s large timber reserves could become the raw material source for what Rowley described as “the establishment of a new business” in TT’s manufacturing sector.

“We discussed the possibility of the use of Venezuelan timber, (with) TT’s methanol as a catalyst, for a plywood industry. To that end, the relevant Venezuelan minister will visit TT in the very near future to meet his counterpart here to discuss that proposal.”

Checks by Business Day on December 12 revealed that Trade Ministry, Paula Gopee-Scoon, is scheduled to meet her Venezuelan counterpart (most likely Foreign Trade Minister, Jesus Farias) “later this week” at her office, Nicholas Tower, Port-of-Spain.

Maduro to add more money to Revolving Fund for TT goods

In a more immediate set of good news for manufacturers, the PM said President Maduro intends to add another US $50 million to the Revolving Fund from which money is drawn to pay for TT goods such as chicken, butter, ketchup, rice and black beans.

The fund was part of a trade deal signed on May 23 during Maduro’s one-day visit to Trinidad. Under the deal, Venezuela’s largest State enterprise, Corporacion Venezolano de Comercio Exterior SA (Corpovex), would use a US$50 million revolving fund to purchase basic goods manufactured in this country to help offset severe shortages in the South American nation.

The first shipments were flown to Venezuela on June 23 by Venezuela’s military cargo planes which departed Piarco International Airport, Piarco bound for Cumana in Eastern Venezuela. The planes were loaded with chicken, white rice, pasta, powder milk, ketchup, mayonnaise and other food items.

Another eight deliveries on June 24 and 25 included shipments of toilet paper, bath and washing soap, margarine and flour.

As we approach the six month anniversary of that first shipment, PM Rowley said during his meeting with Maduro, “it was acknowledged that the Revolving Fund to facilitate commerce and manufactured goods is working.”

“We were told that there is US $27 million from the first $50 million, which means that we can produce more, on a larger scale and the President today agreed to add a further $50 million to that. So the Fund, this revolving fund that facilitates manufactured goods (from TT) into eastern Venezuela, would be sustained and continue to grow.”

Refining Venezuelan

oil at Petrotrin

The PM’s delegation included chairman of the State-owned Petroleum Company of Trinidad and Tobago Limited (Petrotrin), Professor Andrew Jupiter.

Referring to “spare capacity” at Petrotrin’s refinery, Rowley said the delegations began talks on shipping Venezuelan oil to Petrotrin for processing, provided the oil in question is “of a certain quality”.

“We also, at the level of the President of Venezuela and myself, opened discussions between the chairman of Petrotrin, who was part of our delegation, and the Minister of Energy to determine whether there’s the possibility of spare capacity in TT for refining (being) met by determining whether adequate crude of a certain quality is available in Venezuela for onward transmission to TT for refining. (Thus) we could maximise the use of our refinery for the benefit of both the owner of that oil and the refiner; which is TT.”

Rowley told reporters there would be “benefits for us if such a crude could be located and increase the throughput of the refinery in TT...because one of the things that we’re facing now in TT is that, having just spent a huge amount of money in upgrading our refinery, we are now faced with the lowest oil production in 60 years in Trinidad; (about) 65,000 barrels a day.”

Noting that oil production in this country once stood at 240,000 barrels a day, which fell to 100,000 barrels before reaching the current low of about $65,000 barrels, Rowley said TT has to “find a closure for that gap.”

“Our discussions today indicate that if that raw material; in the form of adequate quality of crude, can be found in Venezuela, the Government-to- Government expectation is that a supply could be made to TT.”

The PM then reiterated his message that “the quality of life” people have come to enjoy in TT is “threatened” by falling reserves of our oil and gas. He also said while economic diversification is important, the energy sector still has an important role to play.

“We talk a lot about diversification. It sounds good, and yes we must diversify, doing everything else that we can, while acknowledging that we have done well and we continue to do well and we will do well, if we maximise our involvement in hydrocarbons. “This is not to the exclusion of other things,” Rowley explained. “It is in addition to (doing) other things (such as) a giant step in tourism (and) local agriculture.”

Dr Rowley was asked if, given the state of relations between the United States (US) and Venezuela, if he had any concerns that the US might have an issue about closer ties between TT and Venezuela.

“I am sure that the US, being our major trading partner, would wish us well in every venture that we undertake with any country in the world. TT is at peace with all men, especially at Christmas time,” he declared.

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