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Last Updated: Thursday, 30 June 2005, 02:11 GMT 03:11 UK
Caribbean oil initiative launched
Hugo Chavez
Critics say Chavez uses oil to seek more influence in the region
The Venezuelan President, Hugo Chavez, has launched a regional oil initiative to provide fuel at cheaper prices to 15 Caribbean nations.

Mr Chavez announced the Petrocaribe plan at a regional summit in Venezuela's city of Puerto La Cruz.

He said the region had suffered centuries of imperialism and needed to strike out on its own.

Critics say Mr Chavez is using Venezuela's oil to secure diplomatic influence in the Caribbean.

Venezuela is the world's fifth largest oil exporter, producing 3.1 million barrels a day.

It is a leading oil supplier to the US, but Mr Chavez is seeking to develop diversified energy ties with the Caribbean, Latin America and Asia.

The Petrocaribe initiative aims to further cut the preferential prices Venezuela gives to communist Cuba and other nations.

'Regional solidarity'

"Today I propose to the Caribbean that we form an energy alliance," Mr Chavez said at the opening of the summit.

Oil pipelines in Venezuela
Oil is Venezuela's main source of foreign cash

He said that Venezuela's state oil firm PDVSA had already created an affiliate, PDV Caribe, to implement the initiative.

Mr Chavez pledged highly preferential oil prices, with Caracas picking up 40% of the cost if oil was selling at more than $50 a barrel, as it is now.

He promised further concessions to the Petrocaribe signatories if prices hit the $100 a barrel mark.

Venezuela is putting $50m into a fund to kick-start the plan, and Mr Chavez said Caracas would pay for oil shipments and help with setting up storage facilities across the region.

But he insisted all this new business must be between governments, saying that the region could not hand any more over to Texaco and other private companies.

This condition may alarm international oil companies.

Cuban President Fidel Castro - who is also attending the summit - hailed the initiative as an important step toward greater regional solidarity.

Mr Castro said it was "the only method of survival for our countries".

The summit is also attended by delegations from Antigua and Barbuda, Barbados, the Bahamas, Belize, Dominica, Grenada, Jamaica, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Surinam and Trinidad and Tobago.

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