The Government plans to sell off chunks of its shares in Petrojam to facilitate the upgrade and expansion of the refinery.

The International Monetary Fund (IMF) this week disclosed, in a more detailed memorandum of economic and financial policies (MEFP) than was revealed earlier this year when a Stand-By Arrangment was agreed on, that “over time, the government is prepared to reduce its remaining interest through the direct sale of shares to PDVSA or other potential investment partners”.

“As PDVSA makes new equity investments in the refinery project, the Jamaican government’s equity participation will continue to be reduced accordingly,” said the document.

The government had already reached an agreement in April to to hand over its majority stake in Petrojam by selling shares to PDVSA of Venezuela to allow it to increase its stake in Petrojam from 49 percent to 51 per cent.

The move was said would allow the joint venture to secure financing for the project without a government guarantee, as it “committed to refrain from any direct or indirect borrowing by any public sector institution” under the IMF agreement.

Even while Prime Minister Bruce Golding had said in April that the capital costs associated wit the upgrade would run to some US$663 million, the IMF document said the the “expansion and modernisation of the refinery involv(es) investments of US$1.3 billion over a three-year period”.

In June Winston Watson, general manager at Petrojam said that the company was “hoping to start work at the end of 2010 into 2011 and complete over a three-year period”.