Venezuela launches Caribbean oil alliance Petrocaribe

Oil accord supported by Chavez —
Manning wants to analyse proposal

PUERTO LA CRUZ, Venezuela: Cuban leader Fidel Castro, Venezuelan leader Hugo Chavez and top officials from 14 other Caribbean countries met for talks yesterday on a Venezuelan plan to sell fuel more cheaply to the region as world oil prices remained near record highs.

Most of the delegations were expected to sign an accord to set up a cooperative programme for Venezuela to distribute fuel across the region on preferential terms.

"Today I propose to the Caribbean that we form an energy alliance," Chavez told the visiting leaders, saying the oil plan would be a new force for integration.

Trinidad and Tobago Prime Minister Patrick Manning said his country also was willing, in principle, to share its oil but would like to analyse Chavez’s proposal in greater detail because it could put his country at a competitive disadvantage.

Castro called the plan an important step toward greater solidarity, "the only method of survival for our countries" as oil prices continue to rise.

The initiative, called Petrocaribe, would extend and improve special financing arrangements under past oil deals and use an expanded fleet of Venezuelan tankers to deliver fuel directly to bypass costly intermediaries, Chavez said.

He said the Venezuelan state oil company had created a new affiliate called PDV Caribe to coordinate the project and that Venezuela would be willing to accept goods such as bananas or sugar for a portion of payments. He said Venezuela also was prepared to help build new oil depots in the islands to help.

The initiative could help small Caribbean countries save a projected US$6 a barrel on fuel, Venezuelan foreign minister Ali Rodriguez said. Both Castro and Chavez criticised wasteful use of energy by wealthy countries like the United States, saying unbridled capitalism is leading the world toward an energy crisis and an environmental disaster.

"Will the species be able to survive what is being done to the environment?" Castro said. "The crisis is much more serious and much deeper than people imagine."

Chavez joked that the 78-year-old Cuban leader, whom he has called his "older brother," appears much younger. "Fidel is about to turn 51," Chavez said.

Castro, wearing a suit and tie, responded by saying "there are countries in Africa where" average life expectancy "is 38 years old."

Cuba’s domestic news agency AIN said it was Castro’s eighth visit to Venezuela since his revolutionary triumph in 1959.

Castro said he had decided to attend at the last minute after initially saying he didn’t plan to come. For that reason "this may be the only visit in which there was no plot against me," Castro said, citing assassination plots thwarted during past summits.

Security was tight near the resort in the coastal city of Puerto La Cruz, with troops stopping cars. Delegations from 16 countries attended, including the leaders of Jamaica, the Dominican Republic, Grenada, Dominica, and St Vincent and the Grenadines. The meeting came as crude prices fell on the New York Mercantile Exchange (NYMEX), but the benchmark NYMEX crude contract for August delivery was still well above US$57 per barrel.

Chavez’s opponents accuse him of using "oil diplomacy" to pursue his political aims and line up allies for his frequent clashes with the US government. He has defended the Petrocaribe plan as a way to help both Venezuela and the region while moving toward a more cooperative international economy.

He is firmly opposed to the US-proposed Free Trade Area of the Americas, and has instead sought to build support for his own brainchild, the Bolivarian alternative trade pact, named after independence hero Simon Bolivar.

Chavez said Venezuela will help start a new multimillion dollar fund for "economic and social development" in the Caribbean. He invited other countries to contribute but gave few details.

Venezuela, the world’s number five oil exporter, already has special deals to provide oil on preferential terms to a number of Caribbean countries, as well as nations from Uruguay to China. Two months ago, Venezuela opened a new office in Havana for the state oil company Petroleos de Venezuela SA, and announced it had upped sales to Cuba to 90,000 barrels a day. In turn, Castro’s government has sent thousands of Cuban doctors to Venezuela, where they work in poor neighbourhoods treating patients for free.

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