June 29 marks 13 years of Petrocaribe: the strategic oil alliance between Venezuela and Caribbean countries created by former Venezuelan President Hugo Chavez on this day in 2005.
The multi-member nation agreement for energy cooperation is a political initiative to facilitate the access of hydrocarbons for Caribbean nations without the adverse consequences of inter-mediation, prevailing market prices and speculation.
Chavez intended it to resolve the "asymmetries in access to energy resources through new favorable, equitable and fair exchange schemes between the countries of the Caribbean region," without state control of the supply of resources.
Venezuela, home to one of the largest hydrocarbon reserves in the world, had for many years ignored the needs of its neighbors. Instead, it sold its natural resources to meet the needs of rich countries and at standard market prices
Petrocaribe signaled a change in the direction of Venezuela's relations with its neighbors, moving towards a vision of unity proposed under the Bolivarian Alternative for the Peoples of Our America (ALBA) and guided by the principles of solidarity and cooperation.
Under the agreement, Venezuela accepts payment for hydrocarbons by various means, offering special prices for different goods and services.
As former Oil Minister Rafael Ramirez said: "We're not talking about discounts... We're talking about financial facilities, direct deliveries of products, infrastructure."
Under Petrocaribe, the short-term partial payment period for 60 percent of the Venezuelan oil bill increased from 30 to 90 days. The remaining 40 percent can be paid through a 17- to 25-year financing agreement with 1 percent interest if oil prices are above US$40 per barrel.
In exchange for oil, Venezuela accepts payment in goods and services at lower price: Cuba pays part of its bill through medical, education and sport services, while Nicaragua pays with meat and milk, and the Dominican Republic sends black beans.
By 2013, Venezuela had received 1,410,000 tons of basic food items – including textiles and 62,000 cattle – through Petrocaribe.
In 2010, Chavez said: "Many countries would have had to turn off the lights and perhaps went bankrupt some time ago, if it had not been for Petrocaribe."
Since its establishment, Petrocaribe has been a beacon for Caribbean peoples to affirm their independence and economic autonomy, as well as develop a series of social programs.
The project is comprised of 19 nations: Antigua and Barbuda, Bahamas, Belize, Cuba, Dominican Republic, Grenada, Guatemala, Guyana, Haití, Honduras, Jamaica, Nicaragua, Dominican Republic, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname and Venezuela.