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Jamaica's state-run oil refinery, Petrojam (Photo: Petrojam)

US oil company eyes millions owed to Venezuela by Jamaica

Jamaica's state-run oil refinery, Petrojam (Photo: Petrojam)

Kenneth Tomlinson of Business Recovery Services Limited, who has been appointed receiver and empowered by the Supreme Court to recover and distribute assets owed to Venezuela in Jamaica, indicates that the company is not yet positioned to disclose all assets being targeted.

“We are not in a position to make a comment at this time,” stated Kenneth Tomlinson, CEO, Business Recovery Services Ltd & BRSL Consulting Services Ltd, in a response to the Jamaica Observer.

The company’s latest project, however, is to collect, under assignment from the Supreme Court, funds owing to Caracas and State enterprises. Reportedly excluded are funds owed to Caracas for Petrojam Limited.

Since about April 2019, the Government of Jamaica has been holding in an escrow account an undisclosed amount deposited as payment after it expropriated the 49 per cent shareholding in oil refinery Petrojam Limited which was held by Petróleos de Venezuela, SA (PDVSA), the Venezuelan State-owned oil and natural gas company.

(File Photo)

No update has been secured about Venezuela’s search for US$250 million in compensation for that country’s 49 per cent stake in Petrojam, taken back by the Jamaican Government under the Compulsory Acquisition (Shares in Petrojam Limited) Act of February 2019.

St Michael Hylton, who was attorney representing PVDSA in that year, told the Business Observer, “I am afraid I am unable to assist with answers to any of these questions.”

A July 15, 2021 order appointed Tomlinson as interim receiver, essentially to search for and establish the existence of assets.

The lawsuit was brought in the Jamaican court by attorneys of the Kingston law firm Nigel Jones and Company on behalf of Phillips Petroleum Company Venezuela Limited and its Venezuelan affiliate, Conoco Phillips Petrozualta BV, against Venezuelan firms Petróleos de Venezuela SA, Corpoguanipa SA, and PDVSA Petróleo SA.

(Photo: Asean Records)

In July 2020, the US oil firm’s lawyers secured enforcement of a 2018 decision of an arbitration panel of the International Chamber of Commerce which held that Venezuela had illegally expropriated the country’s joint-venture operations with ConocoPhillips in 2007.

The sum said to be owed is estimated at US$1.29 billion, with interests accruing daily.

The February interim receivership order made by the court includes funds owed by Jamaica to Venezuela for oil supplied under the Petro Caribe oil deal. The agreement, which began in 2005, allowed beneficiary nations to buy oil at market value but only pay a percentage of the cost up front. The balance can be paid over 25 years at one per cent interest.

It is estimated that about US$130 million was owed two years ago but no payments have been made because of US sanctions preventing use of normal, US-based intermediary banks. Funds are said to be held in an escrow account by the Jamaican Government. The PetroCaribe Fund was phased out in early 2019. Estimated holdings of US$1.6 billion were incorporated into the Jamaican Government’s central treasury.

US sanctions continue to prevent the Government of Nicolas Madura from collecting monies owed from funds held around the globe. In July 2020, the UK High Court ruled against Venezuela’s Government in a legal battle over access to US$1bn (£820m) of gold stored in the Bank of England.

Nicolas Maduro, Venezuela’s president, speaks during a press conference at Miraflores Palace in Caracas, Venezuela, on Friday, February 14, 2020. (File photo)

The court said it “unequivocally recognised Opposition leader Juan Guaidó as president”, rather than President Nicolás Maduro. The gold is being held by the Bank of England (BoE) following British and US sanctions on Maduro’s government. The sanctions have slowly choked off many sources of income for the South American nation.

Tomlinson was asked by the Business Observer to advise on the steps to be taken in retrieving assets owned by the Venezuelan Government on behalf of Conoco Phillips, which specific assets are being targeted, and what response has been received from the Jamaican government to date.

Tomlinson in reply said he was not in a position to provide any update. The Business Observer also reached out to the Minister of Finance and the Public Service Dr Nigel Clarke for a response from the Jamaican Government side. He promised to provide an update later this week.