Identifier
Created
Classification
Origin
05NASSAU1225
2005-07-01 17:26:00
CONFIDENTIAL
Embassy Nassau
Cable title:  

PETROCARIBE: "A DREAM COME TRUE" FOR MINISTER

Tags:  ENRG PREL BF 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L NASSAU 001225 

SIPDIS

STATE FOR WHA/CAR WBENT

E.O. 12958: DECL: 07/01/2010
TAGS: ENRG PREL BF
SUBJECT: PETROCARIBE: "A DREAM COME TRUE" FOR MINISTER
MILLER

REF: A. NASSAU 1191

B. NASSAU 754

Classified By: DCM Robert M. Witajewski, Reasons 1.4 b and d

C O N F I D E N T I A L NASSAU 001225

SIPDIS

STATE FOR WHA/CAR WBENT

E.O. 12958: DECL: 07/01/2010
TAGS: ENRG PREL BF
SUBJECT: PETROCARIBE: "A DREAM COME TRUE" FOR MINISTER
MILLER

REF: A. NASSAU 1191

B. NASSAU 754

Classified By: DCM Robert M. Witajewski, Reasons 1.4 b and d


1. (C) Trade and Industry Minister Leslie Miller returned
from Venezuela on June 30 waving the PetroCaribe agreement
and declaring cheap gas prices in our time. Minister Miller
stated that, "What we got from the Venezuelans is a dream
come true. This is an extraordinary agreement, one that I
have been behind for the past two and a half years."


2. (C) Minister Miller claimed he could not go into the
details of the PetroCaribe contract until he had first
addressed Cabinet. He stated, however, that the Bahamas
Electricity Corporation would save "between $10 million and
$15 million per year." Bahamian motorists, he continued,
would see gas prices decline by anywhere from 65 cents to $1
per gallon.


3. (C) According to Minister Miller, the program comes into
effect immediately. "We are now going to implement this
PetroCaribe initiative as soon as possible because gas is
scheduled to go over $4 per gallon this month. We now need
to set up a national energy corporation because they
(Venezuela) are not going to sell to a private corporation."
Miller added that the oil would be supplied through PDV
Caribe, a subsidiary of the Venezuelan state-run
conglomerate, PDVSA.


4. (C) Shell's local representative stated that his company
remained in the dark about PetroCaribe and had not been made
aware of any of the details of the agreement. He underscored
the complexity of the energy business and wondered how the
Bahamian government planned to deal with issues such as
shipping, storage facilities, inventory levels, and a supply
network. (Reportedly, Shell has in recent months also been
seeking a buyer for its Bahamas operations fearing that
Miller's plans might actually come to fruition.)


COMMENT
--------------


5. (C) Reducing the price of gas in The Bahamas without
reducing either wholesaler or dealer profit margins or the
government tax has long been one of Leslie Miller's signature
theme projects. His past predictions of cheap gas in our
time have gone unfulfilled while he has lurched from
political gaffe to political gaffe. The local oil companies
have long been suspicious of his maneuverings and have
challenged his proposals both publicly and privately. His
permanent secretary, the senior civil servant in the
ministry, has long given up trying to explain to him the
economics of the oil business in general and in The Bahamas
in particular. On top of this, The Bahamas does not have a
national energy corporation. Minister Miller very much wants
one to be created under the authority of his ministry
(reftels). He talks of "eliminating the middle man" but even
if a national energy corporation were created it would have
little choice but to rely on the existing supply networks run
in The Bahamas by Shell, Esso and Texaco, in essence making
the government an additional middle man. The lack of
consultation with the local oil companies suggests that any
real changes to The Bahamas' energy market remains a distant
dream.


6. (C) Other public corporations in The Bahamas -- the
national airline, the national telephone company, and the
national electricity company -- are the butt of cynical jokes
regarding their overstaffing, waste, and inefficiency.
Ordinarily, conservative, free-market Bahamians would dismiss
the idea of creating yet another public entity out of hand.
But if the alternative is to have to give up their beloved
SUV's and pick-up trucks, many Bahamians may well be caught
on the horns of a serious dilemma and conclude that another
wasteful public entity is the lesser of two evils.

ROOD