Venezuelan leader Chavez presides over regional oil summit in Cuba

CIENFUEGOS, Cuba -- Venezuelan President Hugo Chavez presided Friday at a regional petroleum summit in Cuba, pressing his efforts to counter U.S. influence in Latin America and the Caribbean by suggesting more of his neighbors could pay for cheap oil with goods or services in lieu of cash.

In his opening speech to the Petrocaribe summit in Cienfuegos, a southern coastal city about 155 miles from Havana, Chavez said his plan to provide low-cost oil to the region should go beyond financing mechanisms. He offered other countries the option of following the model of Cuba, which repays by sending doctors who offer free services to the poor in Venezuela.

Providing fuel in return for locally produced goods or services has been an option for some time under Venezuela's current Petrocaribe pact, which supplies oil to the region through long-term, low interest financing. But it is unclear how many countries other than Cuba have taken up the offer.

Chavez also called for creating an international fund to promote solar, wind, geothermal and other alternative energy sources.

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

Venezuela has the largest oil reserves outside the Middle East. It is South America's largest oil exporter and the fourth-largest supplier of crude to the United States.

Chavez said Petrocaribe members' collective debt for Venezuelan crude currently is near $1.2 billion and is expected to grow to $4.5 billion by 2010. He is promoting Petrocaribe as part of a larger effort to create a regional confederation from Argentina to Cuba that will help the region counter U.S. influence.

The Venezuelan leader blasted Washington's proposals for free trade pacts and called on regional leaders to band together against the failed "dictatorship of world capitalism."

"Free trade doesn't exist," he said, insisting Petrocaribe was based on fairness and promoting social equality -- not profit margins.

Petrocaribe allows nations to repay Venezuela over up to 25 years with 1 percent interest as long as the price of crude is above $40 a barrel.

Chavez also paid tribute to his friend and ally, the ailing Fidel Castro, who before failing ill had been the central figure at such regional events.

The 81-year-old Castro has not been seen in public since ceding power to his younger brother Raul following emergency intestinal surgery 17 months ago. But Chavez met behind closed doors with him for "an emotional" 21/2 hours Thursday, official media said.

Although both Chavez and Raul Castro gave Friday's opening remarks, it was the more talkative Venezuelan who was center of attention during the daylong summit of Petrocaribe, created in 2005 to counter Washington's largely unsuccessful attempts to build a hemisphere-wide trade group.

Raul Castro said that in the face of soaring international energy costs, the pact ensures Petrocaribe members are in a "privileged position."

Venezuela sends nearly 100,000 barrels of subsidized oil a day to Cuba. In exchange, thousands of Cuban doctors treat poor patients in the Venezuela.

As a result, Venezuela has become Cuba's most important trade partner. Fidel Castro recently wrote that overall annual trade with Venezuela has reached $7 billion.

With Venezuela's backing, Cuba is opening a renovated oil refinery that was left idle after the collapse of the Soviet Union -- new evidence that Venezuela has replaced Moscow's communists as a crucial patron of Cuba.

More than $136 million in improvements have been made to the refinery, which will employ 1,200 people. It is expected to process 65,000 barrels of crude daily and then increase capacity, eventually pushing Cuba's overall daily production to more than 100,000 barrels a day.

Presidents Daniel Ortega of Nicaragua, Rene Preval of Haiti and Leonel Fernandez of the Dominican Republic were attending the summit as well as the leaders of Antigua and Barbuda, Belize, Dominca, Guyana, St. Kitts and Nevis, St. Vincent and the Grenadines, and Jamaica.