MANAGUA – Venezuela this week sent 276,000 barrels of petroleum to Nicaragua to be processed here by U.S. oil company Esso Standard Oil, which owns the country’s only refinery, according to government officials.
The oil shipment, the first to Nicaragua under the new agreement between the Nicaraguan-Venezuelan oil company ALBANISA and Esso, is valued at $20 million, according to Francisco López, president of the Nicaraguan state-owned oil company Petronic.
The deal calls for Venezuela to supply Nicaragua with 10 million barrels of petroleum annually – or the country’s entire petroleum demand. The terms of payment allow Nicaragua to pay 50% of the oil bill over a 25-year term, with a two-year grace period.
The oil agreement, signed under the auspices of the Bolivarian Alternative for the Americas (ALBA), also stipulates that 25% of the petroleum bill will go into a social development fund for ALBA member countries.
Venezuela made similar promises to Nicaragua last year, but was ultimately unable to follow through on the promised oil because the Nicaraguan government lacks the infrastructure to off-load and refine petroleum – leading to the tentative agreement with Esso earlier this year (NT, Jan.18).