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Leaders discuss oil pact in Cuba Chavez proposes oil barter scheme
(about 8 hours later)
Heads of state from Central America and the Caribbean have met in Cuba for a summit on a Venezuelan initiative to supply cheap oil to regional allies. Venezuelan President Hugo Chavez has said Central American and Caribbean states could pay for oil with services or products like bananas and sugar.
Petrocaribe is a Venezuelan-financed organisation that gives its members access to oil at preferential rates. Speaking in Cuba at the regional Petrocaribe summit of oil consumers and exporters, Mr Chavez said they were creating a "new geopolitics of oil".
So far 16 countries have signed up to the pact, which was launched in June and allows members to buy Venezuelan oil financed by low interest loans. The group is not at the service of "imperialism and capitalists", he said.
Venezuela's President Hugo Chavez hailed a "new geopolitics of oil". Venezuela supplies oil to 17 states in the Petrocaribe group at preferential rates, financed by low-interest loans.
The BBC's Michael Voss in Cuba says the initiative was set up by Mr Chavez as a challenge to Washington's free trade area for the Americas. On Friday, Honduras joined the organisation, which was founded in 2005.
It is proving an economic lifeline for countries struggling to cope with soaring oil prices, he says. Economic lifeline
Deferred payments At the summit in the southern city of Cienfuegos, Mr Chavez suggested extending an exchange scheme like the one between Venezuela and Cuba.
Mr Chavez entered the summit with Cuba's Acting President Raul Castro, greeting leaders from nearly a dozen countries. 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.
"We have begun to create a new geopolitics of oil that is not at the service of big money interest," Mr Chavez said. Mr Chavez opened the summit with Cuba's Acting President Raul Castro, greeting leaders from nearly a dozen countries.
Leaders from almost a dozen countries attendedThe initiative permits signatory countries to defer payment on 40% of the oil they buy from Venezuela for up to 25 years, paying interest of only 1%. Naomi Campbell toured a recently revamped Cuban refinery
Cuba already receives all its oil for free in exchange for social services including the work of thousands of Cuban doctors. 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.
And Caribbean islands such as Jamaica, Haiti and the Dominican Republic can pay their bills in part with products such as bananas and sugar. 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.
Critics accuse President Chavez of using his oil wealth to extend his and Cuba's political influence. Venezuela has the largest oil reserves outside the Middle East.
Venezuela 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 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%.
Also on the agenda at the summit is the ceremonial reopening of a long-idle, Soviet-era oil refinery in Cuba, which Venezuela has helped to renovate. 'Emotional' meeting
Before the summit, Mr Chavez spent two and a half hours with Cuban President Fidel Castro, state media said, in the latest of several visits to the ailing leader. 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.The two held an "emotional" meeting, during which they discussed regional integration and international affairs, state media reported.
Fidel Castro is still recuperating from stomach surgery. He said earlier this week that he would "not cling to office", which sparked speculation that the revolutionary who has led Cuba for 47 years may be considering retirement. 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 Jamaican-born supermodel, who in October conducted a magazine interview with Mr Chavez in Venezuela, was reportedly joined by the Cuban vice foreign minister.