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January 30, 2015


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Wasn't the buffering of oil prices more important than nominal prices, vis a vis Carribean countries ex-Guyana, Suriname, T&T? For instance, it seems that according to the folks at the Inter-American Development bank and specifically Valerie Mercer-Blackman and Karl Melgarejo, the two factors are oil prices and trading partner GDP. Thus the benefit of the Petrocaribe program derived from the fact that US and Euro economy can boom, buying up tourism, bauxite, whatever, but the oil prices these countries had to tolerate didn't eat up the gains in terms of greater business. Therefore, if oil prices went down, but trading partner GDP is on the downswing, perhaps proportionally more, then it doesn't really matter how much cheaper oil is--there's no business for it to fuel. Which comes to the point that perhaps in the anticipation of some new boom, which would drive up oil utilization and perhaps prices, knowing that the petrocaribe program exists aids in planning and negotiation over bonds...I don't know, but that's where the thought leads.

I've just decided that I've been neglectful about learning about Trinidad and Tobago.

Hmmm...well what about that new US$1 billion "Caricom Thematic Energy Fund" announced by Trinidad & Tobago?

J.H.: How so? It's a vague question ... :-)

That said, I haven't seen any details about Persad's proposal. My impression is that the intention is to convert Caribbean baseload to natural gas. Which would, of course, be good for Trinidad! So it's more of a win-win business proposal (with state involvement) than a political deal.

Yes that was what I was curious about. There isn't much detail but as you said the key feature seems to be to convert the Caricom baseload to natural gas, which would of course be good for Trinidad. But over time (and this would be in the medium to long term) when oil prices recover this new fund might also have an effect on buffering Caricom countries from the collapse of petrocaribe (assuming it hadn't collapsed up to that point), wouldn't it?

It would, that's right. It is a long-term play and one that would make sense even if Petrocaribe remained in place.

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