CEO of the Dominican Republic’s oil refinery, Refidomsa, Felix Jimenez, says his government’s move to buyout Venezuela’s stake in their refinery, is a matter of economic life or death for their country.
Mr. Jimenez made the comments in a written response to questions from Nationwide News. There are several parallels between Jamaica and the Dominican Republic as they relate to the countries’ oil refineries and energy industries.
The Caribbean neighbours were both original signatories to Petrocaribe, and benefited from deferred payments for Venezuelan oil at very low interest rates, at a time when world market oil prices were high.
In 2009, Venezuela purchased a 49-per cent stake in the Dominican Republic’s oil refinery, Refidomsa, from the government for USD$131-million.
In a written response translated from Spanish, Refidomsa CEO Felix Jimenez, told Nationwide News, that for more than a year, their international payments for technical services, personnel training and equipment purchases have been subject to restrictions and financial blockage by companies based in the United States and Europe.
Mr. Jimenez says Refidomsa PDV requires these services and products to maintain its daily business operations.
Petrojam had been placed in a similar bind as a result of an Executive Order from US President Donald Trump in 2017 banning transactions by US persons with Venezuela.
In December 2017, Acting Deputy Financial Secretary at the Finance Ministry’s Public Enterprises Division, Carlene O’Connor, explained that Petrojam has had to use cash resources to buy petroleum on the spot market, as a result of the executive order.
The Jamaican government had to step in to lend Petrojam $12-billion to pay for petroleum products on the world market.
Over in the Dominican Republic, the situation has continued to affect Refidomsa’s operations. According to Mr. Jimenez, the financial sanctions, which are blocking the company’s payments to its international suppliers, led them to what he calls the necessary decision to formally propose the re-purchase of the shares. He says re-acquiring the shares has become a critical situation, a matter of economic life or death for the Dominican Republic.
Mr Jimenez says these sanctions could eventually prevent them from buying crude oil and refined petroleum products from their international suppliers, such as Nigeria and the United States. He says if the Dominican Republic does not re-acquire full ownership of its oil refinery, not only does Refidomsa PDV run the risk of disappearing, but it also puts the country’s energy security at risk. He says this could hinder their ability to secure fuel supplies that their economy needs to function properly.
The refinery CEO adds that re-acquiring the shares is urgent, as Refidomsa handles almost 50-per cent of the country’s fuel market, excluding natural gas. He says for that reason, it would constitute a national catastrophe if the company cannot unexpectedly ensure the supply of fuel.