Caribbean countries and Venezuela to form new oil distribution firm

Hammered by record-high oil prices, Caribbean energy ministers meet with Venezuelan officials to iron out plans for a new company that will sell oil at a cheaper rate in the region.
The two-day talks in the resort town of Montego Bay couldn't come at a better time for cash-strapped Caribbean governments. World oil prices are hovering at unprecedented levels, driven by fears of sabotage against Iraq's oil infrastructure and a possible decline in Russia's oil production.

The new company, to be named PetroCaribe, was proposed by Venezuela to counter the harsh impact of rising fuel costs. The company would distribute crude and refined oil products to the Caribbean at lower prices than other dealers in the area.
"Now that we are faced with this energy crisis, ... we are hoping that this (initiative) will alleviate the burden," said Jamaican Commerce Minister Philip Paulwell, who oversees energy matters.

Soaring fuel prices have pressured the market for weeks, with oil prices recently topping $ 49 per barrel, a record level. While prices have softened somewhat over the last few sessions, renewed supply concerns pushed crude futures higher, up 4 cents at $ 45.25 on the New York Mercantile Exchange.
Caribbean countries have signed previous deals with Venezuela for preferential oil prices. However, Ramirez says that the dealers who distribute oil in the Caribbean place unfair profit margins on the products.

Venezuela's plan could offer huge benefits for a country like Jamaica, which imports more than 90 % of its energy. The island has had to explore conservation programs and alternative fuels to counter its skyrocketing energy bill.
"It poses a tremendous burden," Paulwell said.
The countries participating in the talks are: Antigua and Barbuda, the Bahamas, Barbados, Belize, Cuba, Dominica, Grenada, Guyana, Jamaica, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Suriname and Trinidad and Tobago.

Officials have said that Venezuela will also aid some countries inthe development of their own oil industries.
Venezuela, the world's No.5 oil exporter, says it produces more than 3 mm bpd of oil. Some analysts say the amount is closer to 2.5 mm. Venezuela's quota as a member of OPEC is 2.9 mm bpd.