June 30, 2005

Chavez warns U.S. on ties in Caribbean summit

By Magdalena Morales

PUERTO LA CRUZ, Venezuela (Reuters) - Venezuelan PresidentHugo Chavez on Wednesday accused the United States of meddlingin his efforts to create an energy alliance with Caribbeanneighbors and said he may one day have to cut ties withWashington.

The left-wing leader made the warning after reading aletter critical of his rule which he said was sent by the StateDepartment to some of the 15 Caribbean nations attending anenergy summit that he hosted in eastern Venezuela.

"We would have reasons to break relations with this (U.S.)government, out of dignity ... Maybe we will one day, I don'tknow," said Chavez angrily brandishing the letter.

He made clear he had obtained the document, which he saidwas dated June 27 and sent to English-speaking Caribbeanstates, from one of the delegations, but did not say which.

Venezuela is the world's fifth largest oil exporter and aleading oil supplier to the United States, but nationalistChavez wants to develop diversified energy ties with Asia,Latin America and the Caribbean.

He earlier announced a Caribbean energy alliance thatoffered cheaper direct oil supplies to neighbors including allyCuba in a challenge to U.S. influence in the region.

"Venezuela wants to share its energy potential with SouthAmerica and the Caribbean," Chavez told the Caribbean leaders,who included Cuban President Fidel Castro.

He said the U.S. letter sent to Caribbean leaders spelledout Washington's concern over "threats to Venezuela'sdemocracy" under his rule. It also accused him of usingVenezuela's oil to try to destabilize neighbors like Boliviaand Ecuador by supporting radical groups, he added.

"This is abominable," he said. "It makes me angry."

In his Petrocaribe initiative, he proposed making Venezuelathe center of an oil distribution and refining network servingthe Caribbean, especially poorer oil-importing states.

Chavez said this would eliminate intermediary private oiltraders and offer easier payment facilities.


Venezuela is already supplying small Caribbean and CentralAmerican states with oil and fuel under preferential terms.

Chavez said Venezuela's state oil company PDVSA had createdan affiliate, PDV Caribe, to coordinate oil shipping, storageand refining in regional hubs like Cuba, Jamaica and theDominican Republic.

Caribbean leaders welcomed the Petrocaribe initiative,saying it would provide relief to their oil-importing economiessqueezed by high world oil prices. But some questioned how itwould operate and wanted more time to consider.

The Petrocaribe plan is part of Chavez's effort to bolsterCaribbean and Latin American economic unity to counter what hecalls "imperialist" U.S. free-trade policies.

"It's a relatively low-cost geo-political move. ... It getsVenezuela more votes in the Organization of American States andconsolidates Chavez politically," said Michael Shifter ofInter-American Dialogue, a Washington-based think tank

Chavez said Venezuela would continue to ship 1.5 millionbarrels per day (bpd) of crude and oil products to the UnitedStates. But he condemned unfair "imperialist contracts" he saidhad robbed his country for years.

The nations which attended the summit in Venezuela wereAntigua and Barbuda, Barbados, Bahamas, Belize, Cuba, DominicanRepublic, Grenada, Guyana, Jamaica, Dominica, St. Kitts andNevis, St. Lucia, St. Vincent and the Grenadines, Suriname andTrinidad and Tobago.