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| Former minister doubtful on Miller’s Venezuela oil bid |
Krystel Rolle
Guardian Staff Reporter krystel@nasguard.com
Published: Aug 22, 2012
Former minister with responsibility for the Bahamas Electricity Corporation (BEC) Dr. Earl Deveaux is doubtful that BEC Chairman Leslie Miller will be successful in his bid to purchase fuel from Venezuela at discounted prices. Miller said last week he has made initial contact with Petroleos de Venezuela SA, or PDVSA, and will travel to the country within days to negotiate an agreement to purchase oil for the state-run BEC. Miller said the aim is to enter into a contract to buy fuel at lower costs than market prices, ultimately driving down the cost of electricity. But Deveaux, who spoke to The Nassau Guardian on Monday, said he isn't sure how the arrangement would ever work. "Many people speculate that the price of oil is continuing to rise and so it boggles the imagination to assume that a country, even one with as much oil as Venezuela, would discount this precious commodity. It doesn’t make sense to me," he said. "I don’t understand how it would work because I don’t see how in an open market a properly traded commodity with existing markets for setting prices, how The Bahamas could go to Venezuela and make a special arrangement that Mexico, Brazil, Canada or Trinidad would not be party to since they all have oil, they are all friendly to The Bahamas and they all wish to maintain good relations with The Bahamas, and everyone wants to make money. “And in our case we want to reduce our energy load." The former minister added: “If he proposes to have similar discussions with Canada, Trinidad and other oil exporting countries in the region or companies that refine oil, I would have a better understanding and appreciation for his intent. “But oil is a commodity and it’s traded on the open market and I can’t understand how a special arrangement could be made for a commodity, particularly coming from a country that is a member of the Organization of the Petroleum Exporting Countries (OPEC).” Miller said electricity costs are so high because of the prices BEC has to pay for fuel on the international market. “Our view is if we can get a contractual agreement, say a three to five-year contractual agreement with an oil producing country such as Venezuela through PDVSA, who I happen to be knowledgeable with from dealing with PetroCaribe, we feel we will put BEC on the right footing and try to save the Bahamian people... as much as 10 to 15 percent on their bill,” Miller said last week. But Deveaux said if the government wants to lower electricity bills it would be better to look at more practical measures. "Having said that, I think the opportunity to enter into long-term arrangements, to buy on the open market, to improve the efficiency by which BEC generates electricity by improving the Clifton Pier stations, and the combined cycle gas turbine engines where the heat generates a certain amount of electricity , those kinds of things could have an appreciable impact on the cost of electricity that the consumer pays,” he said. Deveaux said Miller can also look into the idea of having the heavy diesel generators repaired and or more of them bought. He said he is unclear how Miller’s present plan will materialize as others have tried and failed. “I don’t understand how the Venezuela arrangement could work because the former Prime Minister of Trinidad and Tobago made a somewhat similar offer to CARICOM nations, and I think long ago Mexico made a similar [offer] but none of these countries have the luxury of surplus budgets, strong economies or a great deal of money sitting around that they can just give away because we happen to need it," he said. As minister of trade and industry in the former Christie administration, Miller pushed for The Bahamas to join PetroCaribe, a Venezuela-sponsored oil alliance that gives countries preferential treatment in buying oil. But Deveaux said the Ingraham administration wasn't interested in the PDVSA deal in the first instance because there was no benefit in it for the country. |
