Gov’t awaits notice expiration for full control of Petrojam

Gov’t awaits notice expiration for full control of Petrojam

Senior staff reporter

Thursday, April 04, 2019

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PERMANENT secretary in the Ministry of Science, Energy and Technology Carol Palmer says legislation for the Government to acquire full control of Petrojam is now fully in effect.

Updating Parliament’s Public Accounts Committee (PAC) on Tuesday, she said the Government is now awaiting the expiration of the public notice for anyone who wishes to declare an interest in the matter to do so.

As set out in the legislation, parties who wish to make claims to compensation have up to three months after the gazetting of the notice, which is dated March 13, 2019, to do so.

In February, Parliament approved legislation for forced acquisition of the 49 per cent shares in Petrojam held by the Venezuelan State-owned oil company subsidiary, PDV Caribe. The Government said the decision was taken in order to protect Jamaica’s energy security, as years of inaction by PDV Caribe on the upgrading of the refinery had left Petrojam and the country at risk.

Piloting the Compulsory Acquisition (Shares in Petrojam Limited) Act, 2019 in the House of Representatives, Prime Minister Andrew Holness said the decision had not been taken lightly.

“Technical assessments have found that refining operations will be negatively impacted by 2020 if Petrojam is not in a position to execute phase one of the refinery upgrade (Vacuum Distillation Unit Project),” the prime minister said.

The upgrade is part of the PetroCaribe deal which the Jamaican Government signed with Venezuela in 2006.

Holness said, too, that imminent international obligations regarding sulphur, which will become effective next January, and the transition by the Jamaica Public Service Company Limited to liquefied natural gas for its 190-MW power plant by this June, will significantly reduce the need for heavy fuel oil produced by Petrojam.

Meanwhile, the permanent secretary also noted that recommendations are expected from the attorney general’s chambers for the composition of a new Petrojam board under a new wholly owned Government of Jamaica regime.

Addressing a concern that Petrojam would be overseeing the procurement process for a forensic audit into the loss of 600 barrels of oil at the refinery, as reported by the auditor general in a December 2018 report on the refinery’s operations, Palmer said: “To the best of my knowledge, it is not intended that Petrojam will be supervising the forensic audit… We are making enquiries of persons/entities to take on the exercise to do the supervision.”

She said the ministry is inviting comments on all aspects of the Terms of Reference for the audit.

“We are serious about it and we are awaiting that input so we can design how we go forward… If there is a significant response to say that the audit ought to go beyond the examination of oil losses, then I think the Government would be hard-pressed not to take it on board,” the permanent secretary said.

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