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The Associated Press/MONTEGO BAY, Jamaica
By CHRISTOPHER TOOTHAKER
Associated Press Writer

Venezuela, Caribbean plan oil meeting

SEP. 5 3:30 P.M. ET Amid a surge in world oil prices, Venezuela and Caribbean leaders are close to finalizing deals to supply the region with oil from the South American nation under preferential terms.

Venezuelan President Hugo Chavez was to meet Tuesday in Jamaica with the leaders of 13 Caribbean countries, and was expected to sign a series of accords establishing the financing and other details of his Petrocaribe initiative.

Chavez has said Venezuela, the world's fifth largest oil exporter, will donate nearly $20 million to help islands build loading docks and fuel storage depots so they can easily receive fuel.


"Many don't even have a loading port. Moorings need to be put in so ships can arrive," Chavez said last week.

He and leaders from the 13 Caribbean countries signed an accord in June approving the outline of the initiative. Since then, Venezuelan officials have toured the region to follow up with specifics.

Jamaica became the first country to finalize an agreement under the accord nearly two weeks ago, and is to begin receiving up to 21,000 barrels a day at $40 a barrel -- significant savings as world prices remain well above $60 a barrel.

Under its bilateral agreement, Jamaica is also eligible for low-interest, long-term loans and is permitted to pay Venezuela in goods and services.

During Tuesday's talks, Chavez said, "we're going to sign with the other governments that have joined" the regional pact.

St. Vincent and the Grenadines Prime Minister Ralph Gonsalves said after meeting Chavez on Saturday that his country was ready to approve a bilateral deal, though he didn't offer details. "All the specific issues have been worked out," he said.

Chavez's critics accuse him of using "oil diplomacy" to pursue political aims and line up allies for his frequent clashes with the U.S. government. Some opponents have also accused him of giving Venezuela's oil away.

"It's not a gift, they are going to pay 60 percent of the bill in cash and 40 percent later in a financed payment," Chavez said Sunday during his weekly radio program.

Chavez said nations that cannot afford to make cash payments would be able to pay for fuel with goods and services.

The leftist leader, a close ally of Cuban leader Fidel Castro, has said the Petrocaribe initiative is intended to help boost regional integration while moving toward a more cooperative international economy instead of the unbridled free trade advocated by the United States.

Chavez is firmly opposed to the U.S.-proposed Free Trade Area of the Americas, and has instead sought to build support for his own proposal -- the Bolivarian Alternative for the Americas trade pact, or ALBA for its Spanish initials, named after independence hero Simon Bolivar.

High oil prices have had severe effects in Caribbean economies already weakened by the waning of the traditional banana and sugar industries.

The increases have forced fishermen to stay in port in Guyana and prompted the Dominican Republic's government to roll out a major plan to reduce fuel consumption.

The government of St. Kitts and Nevis is interested in building an oil refinery and a storage depot for 7,000 barrels of diesel fuel, while officials from Antigua and Barbuda are seeking Venezuela's help in replacing the parts of outdated power plants or installing a temporary generator to prevent blackouts.

Barbados and oil-producing Trinidad and Tobago were the only countries at the June meeting not to sign on to the Petrocaribe pact. Trinidad, which sells 50,000 barrels of oil a day within the 15-nation Caribbean Community, has expressed concerns joining would hurt its economic interests, but a Trinidadian delegation still plans to attend Tuesday's talks.

Barbados says it has concerns about the region-wide pact but would still like to negotiate a bilateral agreement with Venezuela to be included.