Chavez offers Caribbean cheap oil

PUERTO LA CRUZ, Venezuela – Fresh from his confrontation with Pres. George Bush at the Summit of the Americas, Venezuelan Pres. Hugo Chavez is using his most powerful asset – oil – to challenge U.S. dominance in the Caribbean. His latest move, according to the BBC, is a regional oil initiative to provide fuel at cheaper prices to 15 Caribbean nations. 

Venezuela, a leading oil supplier to the United States, is the world’s fifth largest oil exporter, producing 3.1 million barrels a day. Chavez is using that position to develop diversified energy ties with the Caribbean, Latin America, and Asia. He has named the new plan Petrocaribe, and describes it as “an energy alliance” that will offer highly preferential oil prices, with Venezuela picking up 40 percent of the cost if oil is selling at more than $50 a barrel. That could mean further price breaks for Cuba and other nations.

Chavez pledged more concessions to those signing on to the initiative if prices hit the $100 a barrel mark, and said he will put $50 million into a fund to kick off the plan. Caracas will also pay for oil shipments and help to set up storage facilities across the region.

The one condition being placed on the deal is that all business must be between governments, with no role for Texaco and other private energy companies.

Cuban Pres. Fidel Castro, who attended a regional summit staged to announce the initiative, hailed it as an important step toward greater regional solidarity. Delegations from Antigua and Barduda, Barbados, the Bahamas, Belize, Dominica, Grenada, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Surinam, and Trinidad and Tobago also attendd.