HAVANA Dec 20 Venezuelan President Hugo Chavez
will assert his regional leadership at a summit in Cuba on
Friday for Petrocaribe, his initiative to sell oil to Caribbean
nations with soft financing.
With oil prices above $90 a barrel, Petrocaribe is offering
terms that few can refuse, even the best allies of the United
States: deferred payment of 40 percent of their oil bill for up
to 25 years, at 1 percent interest.
"Hugo Chavez wants to use Petrocaribe to establish
Venezuela as a regional power," said Dan Erikson, an expert on
the Caribbean at the Inter-American Dialogue think tank.
He said Chavez is trying to win support from Caribbean
countries "and show that he is basically a good guy trying to
help small, poor countries in the region."
Chavez, a leftist with close ties to Cuban leader Fidel
Castro and the U.S. government's main antagonist in Latin
America, has already gained dividends, Erikson said.
A dozen heads of state will gather at the Cuban port city
of Cienfuegos and attend the opening of a mothballed Soviet-era
refinery that was refurbished by Venezuelan state oil company
PDVSA, Cuban officials said.
They include President Daniel Ortega of Nicaragua, one of
16 Caribbean and Central American states now receiving about
190,000 barrels per day (bpd) of crude and products under the
2005 Petrocaribe deal, covering one-third of their imports.
Delegations from Guatemala and Honduras, countries that
have traditionally been close to Washington, are keen to join
up and will attend the Petrocaribe summit as observers.
Caribbean states backed Venezuela in its unsuccessful bid
last year to win a seat on the U.N. Security Council, which
would have given Chavez a major platform for his anti-U.S.
OBJECTIVES AND HURDLES
Small indebted island states have welcomed the opportunity
to cushion the impact of high oil prices and generate savings
that can be used to develop social programs. The Dominican
Republic looks to free up $450 million a year for other uses.
But critics of Petrocaribe, which does not offer discounted
oil prices, say it will add to the debt of Caribbean nations.
It has also divided the English-speaking CARICOM community
of 15 nations, many of which depended for fuel supplies on
Trinidad and Tobago, an oil producer and major supplier of
liquid natural gas to the United States.
Trinidad and Barbados refused to join Petrocaribe, though
they are now trying to work with Venezuela to improve the
region's energy security, said Anthony Bryan, a Caribbean
expert at the University of Miami.
Bryan said Venezuela has been slow in providing supplies,
with Grenada receiving its first batch of oil only last month.
One hurdle for Petrocaribe, which cuts out intermediaries
and only deals with governments, is that most Caribbean storage
terminals and refining facilities are privately owned.
PDVSA has agreed to upgrade Jamaica's refinery and has
taken a 49 percent stake in Cuba's Cienfuegos refinery, which
will have initial capacity of 65,000 bpd, producing fuel oil
for Cuban power generation and the nickel industry, as well as
gasoline and aviation fuel for export.
The Dominican Republic is negotiating the purchase of
Shell's refinery to be able to receive its full quota of 50,000
bpd from Venezuela on Petrocaribe terms. Nicaragua is talking
to Exxon about using storage capacity at its refinery there.
PDVSA plans to build a 34,200-barrel fuel terminal in St
Kitts and Nevis, and other storage facilities in the region.
"One objective of Petrocaribe is to eventually displace
international oil companies from the region and have their
business role taken over by PDVSA," said Jorge Pinon, a former
oil firm executive and University of Miami energy expert.
(Additional reporting by Manuel Jimenez in Santo Domingo and
Ivan Castro in Nicaragua; Editing by John O'Callaghan)