Maine nearing deal for Venezuelan oil

PORTLAND – Venezuela’s agreement to provide discounted heating oil to four Maine Indian tribes may be a prelude to a bigger announcement as state officials continue negotiations to help low-income Mainers this winter.

The Baldacci administration hopes to sign its own agreement with Venezuela’s Citgo Petroleum Corp. for heating oil discounts within a matter of days.

Citgo is considering an offer to the state on the order of 8 million gallons at a 40 percent discount, Beth Nagusky, Gov. John Baldacci’s top aide on energy matters, said Saturday. That would represent a discount of roughly $5.5 million.

“We’re optimistic. We hope we’re going to have a nice announcement,” said Nagusky, who has been directly involved in the negotiations with Citgo.

The deal being negotiated by the Baldacci administration would supplement the federal Low Income Heating Assistance Program, which was flat-funded this year despite a 25 percent increase in heating oil costs from last year, Nagusky said.

The agreement to provide cheaper oil to the Penobscot, Micmac, Passamaquoddy and the Houlton Band of Maliseet Indians is expected to be signed Thursday on the Penobscot Nation reservation in Old Town, tribal chief Jim Sappier said Saturday.

The Baldacci administration and Citgo were still ironing out details, but an announcement was expected this week. Also, Citgo plans to extend its discount this week to Vermont and Rhode Island, according to Venezuela’s ambassador to the United States.

Citgo already is selling discounted fuel to New York City and Massachusetts as part of a plan by Venezuelan President Hugo Chavez to aid poor communities that the self-styled socialist claims are neglected by Washington.

Critics have accused Chavez of trying to score political points for himself while giving a poke to President Bush. Chavez has described Bush as a “madman.”

Despite the political tension, the United States remains the top buyer of oil from Venezuela, the world’s No. 5 exporter.

Nagusky said the Maine deal is about helping people, not playing politics. “Our job is keeping people warm this winter,” she said. “We’re not going to turn away a generous donation that will help Maine people stay warm this winter.”

The Baldacci administration disclosed in late November that it was negotiating with Venezuela after the deal was struck with Massachusetts.

But Maine tribes actually began exploring the idea earlier with preliminary inquiries from the Micmacs, said Sappier. The state also made inquiries and held negotiations in Portland, he said.

The tribal deal, worth $543,000 in savings, will provide heating oil directly to 912 households on or near reservations of the Passamaquoddys, Penobscots, Micmacs and Maliseets, said Penobscot tribal administrator Brenda Field.

Sappier, who praised Chavez for coming to the aid of low-income residents, said he couldn’t understand critics of the Venezuelan leader. “I don’t know why people are talking that way. Helping poor people really should be a priority,” he said.

Heating oil prices in Maine rose 2 cents a gallon in the latest survey and now average $2.34. That’s 45 cents a gallon higher than at this time last year, according to the state Office of Energy Independence and Security.

About 48,000 Maine households take advantage of LIHEAP. The Citgo donation, along with a $5 million legislative appropriation, should bring Maine’s LIHEAP benefits up to last year’s level, Nagusky said.