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Last Updated: Saturday, 22 December 2007, 02:32 GMT
Chavez proposes oil barter scheme
Cuban Acting President Raul Castro (L) and Venezuelan President Hugo Chavez at the Petrocaribe summit on 21 December 2007
Hugo Chavez's Venezuela is a close ally of Cuba
Venezuelan President Hugo Chavez has said Central American and Caribbean states could pay for oil with services or products like bananas and sugar.

Speaking in Cuba at the regional Petrocaribe summit of oil consumers and exporters, Mr Chavez said they were creating a "new geopolitics of oil".

The group is not at the service of "imperialism and capitalists", he said.

Venezuela supplies oil to 17 states in the Petrocaribe group at preferential rates, financed by low-interest loans.

On Friday, Honduras joined the organisation, which was founded in 2005.

Economic lifeline

At the summit in the southern city of Cienfuegos, Mr Chavez suggested extending an exchange scheme like the one between Venezuela and Cuba.

Venezuela sends nearly 100,000 barrels of subsidised oil a day to Cuba and in return, thousands of Cuban doctors and teachers offer free services in Venezuela.

Mr Chavez opened the summit with Cuba's Acting President Raul Castro, greeting leaders from nearly a dozen countries.

With Venezuela and Cuba at its heart, politics is never far behind
BBC's Michael Voss

The BBC's Michael Voss at the summit says all members of the Petrocaribe group have fragile economies, struggling to cope with rising oil prices.

The organisation is an economic lifeline for many of these countries, although Mr Chavez has acknowledged their debts to Venezuela are growing, says our correspondent.

Venezuela has the largest oil reserves outside the Middle East.

The Petrocaribe initiative allows signatory countries to defer payment on 40% of the oil they buy from Venezuela for up to 25 years, paying interest of only 1%.

'Emotional' meeting

Critics accuse President Chavez of using his oil wealth to extend his and Cuba's political influence across the region.

Venezuela is a leading oil supplier to the US, but Mr Chavez made clear he aimed to foster energy ties across the Caribbean.

"Despite the Yankees, our gas is at the service of Venezuela first, and next to our brothers in the Caribbean," Mr Chavez said.

Before the summit, Mr Chavez spent two and a half hours with 81-year-old Cuban President Fidel Castro, state media said, in the latest of several visits to the ailing leader.

The two held an "emotional" meeting, during which they discussed regional integration and international affairs, state media reported.

British model Naomi Campbell turned up in Cienfuegos on Friday and visited a project of 100 new houses donated by Venezuela for Cuban workers next to an oil refinery.

The supermodel, who in October conducted a magazine interview with Mr Chavez in Venezuela, was reportedly joined by the Cuban vice foreign minister.

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