Venezuela pushes Trinidad out of Caribbean oil market

By Linda Hutchinson-Jafar

PORT OF SPAIN (Reuters) - Venezuelan President Hugo Chavez's sale of subsidized oil to the Caribbean through the Petrocaribe initiative is pushing traditional supplier Trinidad and Tobago out of the region in search of new markets.

Trinidad state oil company Petrotrin's usual Caribbean market sales of around 60,000 barrels per day (bpd) have fallen by half since the 2005 creation of Petrocaribe, which sells oil and fuel on advantageous terms to Caribbean and Central America nations.

"We lost market in the (Caribbean) region but the displaced products are now going into other markets" including the United States, said Kenneth Allum, Petrotrin Vice President for Refinery and Marketing.

Venezuela is selling around 190,000 bpd of oil and products to Caribbean and Central American nations through the Petrocaribe initiative. The Caribbean imports around 450,000 bpd of oil, according to U.S. Department of Energy data.

Fourteen nations in the Caribbean and Central America signed the original Petrocaribe agreement, which allows governments to buy Venezuelan oil and fuel through in-kind payments and to finance 40 percent of their bills at 1 percent for 25 years.

Energy-rich Trinidad and small oil producer Barbados did not join. Trinidad cited concerns that Petrocaribe would compete with its own sales, though Trinidad backed removing a regional tariff to facilitate Petrocaribe sales to the region.

Chavez last month revised the deal to allow up to 70 percent financing of bills if oil prices top $150 per barrel.

Allum said Guyana's entrance into the agreement dealt a strong blow to Petrotrin's Caribbean exports, while a planned Venezuela-financed expansion of Jamaica's Petrojam refinery would continue this trend.