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The high impact the Central American and Caribbean nations must face every time there is an increase in the price of oil and its derivatives, turns out to be positive news in the long run. At least for the states.The Executive has decided to promote -based on the experience from the programs carried out under the San José Agreement and the Caracas Energy Agreement- the creation of a new regional company, Petrocaribe.

According to the Minister of Mining and Energy, Rafael Ramirez, “it is a comprehensive response with the purpose of structuring joint oil and fuel supply organizations with the existing companies in the area.”

“We intend to help establish new companies in those places where they don’t exist, in order create an organization that is able to coordinate all of these efforts”. In other words, just as the Minister says: “We Venezuelans and these nations are going to undertake some trading activities”

Most of the Caribbean countries are in the hands of traders, who -according to analysts- make substantial profits out of speculating with the smaller countries.

The official goal is to shape an oil commercialization and Transportation Company, and the subscription of joint oil refining agreements in those places where this capacity already exists. All these decisions seeking to secure markets -apart from the fact that energy costs in the area will drop- will open for these nations the possibility of carrying out infrastructure projects for the oil and gas sector, with Venezuelan support through the Economic and Social Development Bank (BANDES) and the active participation of goods and service companies from both countries.

With regard to these plans, officials from the CITGO Petroleum Corporation have affirmed that PDVSA should set up a strategy to acquire new assets in the region, since at the moment there is not full capacity to supply the customers only with Venezuelan oil.

Through CITGO, Venezuela owns 14,000 service stations, for which this subsidiary has the obligation of supplying products. But its refining capacity does not suffice to supply all of its clients. This means that on a daily basis, it must buy 58% of its products in the available market in order to honor its obligations.

Thanks to the PDV and CITGO brand expansion campaign throughout Latin America and the Caribbean, nearly 82 service stations have begun operating: 32 in Brazil, 58 in Puerto Rico, and 12 in Guatemala. Nevertheless, we are expecting the entries of Mexico, Ecuador, Argentina, Panama, and Chile in the retail gasoline markets. This year’s projected investments are around 12 million dollars.

CITGO recorded net earnings over 600 million dollars in 2003. This subsidiary operates the refineries of Lake Charles in Louisiana, Corpus Christi in Texas; and Lemont in Illinois, as well as the asphalt plants in Paulsboro, New Jersey, and Savannah, Georgia. It also has a 41% participation in Lyonell-CITGO Refining LP, a mixed capital fuel installation in Houston Texas. It owns in total a capacity for oil processing of 865,000 barrels per day. Its products (basically ecological gasoline) are distributed among 800 wholesalers. It is one of the five most important fuel suppliers for the United States, and the main supplier of asphalt for the East coast of that country.