Venezuela Sues Jamaica Over Takeover of Petrojam Shares

KINGSTON, Jamaica – Jamaica’s foreign Minister Kamina Johnson Smith confirmed, on June 16, that the board of Petróleos de Venezuela (PDVSA), Venezuelan state-owned oil and natural gas company, has filed a lawsuit against the Jamaican government in relation to their “forcible takeover” of its 49 per cent stake in local oil refinery Petrojam.

Just hours before the lawsuit, the PDVSA board appointed by Juan Guaidó, recognised as interim Venezuelan president by more than 50 countries, warned Jamaica to refrain from selling the shares owned by PDVSA in Petrojam.

“The legitimate Government of Venezuela is defending the interests of the subsidiary of PDVSA, before the expropriation carried out by the Government of Jamaica of the shareholding of PDV Caribe in Petrojam,” the board said in a statement published on Sunday by Guaidó’s.

Guaidó, the leader of Venezuela’s opposition-controlled National Assembly, in January, invoked the constitution to assume an interim presidency, arguing Maduro’s 2018 re-election was illegitimate. He has been recognised as the rightful leader by over 50 countries including the United States, but Jamaica is not officially recognized Guaidó as the rightful leader of Venezuela.

Legislation Passed in Jamaica

In February of this year, the Jamaican Senate passed legislation clearing the way for the
government to retake PDVSA’s 49 per cent stake in Petrojam acquired in 2006 as part of the late Venezuelan President Hugo Chavez’s energy diplomacy efforts in the Caribbean. Thus, Prime Minister Andrew Holness is adamant that the Jamaican Government now owns 100 per cent of the refinery and, therefore, would not accede to the request to not retake its shares.

In a statement made by Minister Johnson Smith, she explained that “The Government of Jamaica now owns the shares in Petrojam in its entirety. We passed legislation in order to give this effect. It was not a negotiated agreement. We passed legislation and the shares have now vested. Forty-nine per cent which was previously owned by PVD Caribe is now held by the Accountant General of Jamaica.

Fifty-one per cent remain owned by PCJ (Petroleum Corporation of Jamaica). So there is no question about completing a transaction. The shares are now owned by Jamaica.”

However, according to the statement published by Guaidó’s team, the controversial leader also wrote formally to Prime Minister Andrew Holness in which he stressed that “only the legitimate Government of Venezuela, under the control of the National Assembly, can represent the interests of PDVSA in Jamaica”.

The fact that Jamaica has yet to recognise Guaidó as the official leader of Venezuela seems to be the underlying issue, as both countries prepare to make their next moves.

The Jamaica Petrojam Strategic Review Team has submitted a report to the Cabinet for review, Venezuela has hired popular Jamaican attorney Michael Hylton, QC, to represent PDVSA.