Foreign Correspondence

[Amaunet]

Castro, Chavez talk building oil alliance



The Associated Press/PUERTO LA CRUZ, Venezuela
By IAN JAMES
Associated Press Writer

Castro, Chavez talk building oil alliance

JUN. 28 9:20 P.M. ET Cuban President Fidel Castro joined his close friend and ally President Hugo Chavez of Venezuela on Tuesday to discuss a plan to provide the Caribbean with more oil on preferential terms.

Castro stepped off a Cuban jet accompanied by Chavez, who has called the 78-year-old leader his "older brother," before beginning talks on forming a joint company, Petrocaribe, to build a regional oil alliance and distribute fuel more cheaply in the Caribbean.

Chavez says the initiative is about more than just bargain oil prices, and represents the "union of the Caribbean." Others call the "oil diplomacy," as Chavez seeks support for his political aims.

While many Caribbean islands stand to benefit economically, Venezuela will likely gain political capital by winning allies in its frequent disputes with the United States, said Bishnu Ragoonath, a political science professor at the University of the West Indies in Trinidad.

"Chavez is seeking regional support for his administration, and that is what he's getting in return for the cheaper fuel prices," Ragoonath said. "It's simply a matter of shoring up support."

Chavez has defended plans for Petrocaribe -- and a similar South American joint venture called Petrosur -- as a way to help both Venezuela and the region while moving toward a more cooperative international economy.

Resting his arm on Castro's shoulder, Chavez warned that increased energy consumption in countries such as the United States was reaching unsustainable levels.

By doing little do slow increased demand for energy, the world's most developed countries "are causing a humanitarian crisis for survival" among smaller nations, Castro said.

A harsh critic of capitalism and a U.S. government Chavez calls "imperialist," Chavez says he is leading Venezuela toward socialism.

He also is firmly opposed to the U.S.-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.

Venezuela, the world's No. 5 oil exporter, already has special deals to provide oil to a number of Caribbean countries, as well as nations from Uruguay to China.

Venezuela and Mexico supply subsidized oil to 11 Central American and Caribbean countries under the 1980 San Jose pact.

Last year, Chavez signed a deal with the Dominican Republic to sell up to 50,000 barrels a day of oil with preferential financing.

Two months ago, Venezuela opened a new office in Havana for its state-run oil company Petroleos de Venezuela S.A., and announced it had increased 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 treating the poor for free.

Officials said delegations from 15 countries were expected, including the leaders of Grenada, Trinidad and Tobago and Dominican Republic.


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