Venezuela to supply Guatemala with oil - East Valley Tribune: Business

Venezuela to supply Guatemala with oil

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Posted: Saturday, July 12, 2008 10:46 pm | Updated: 11:22 pm, Fri Oct 7, 2011.

MARACAIBO, Venezuela - President Hugo Chavez said Saturday that he is expanding his Venezuela's Petrocaribe oil-supply pact to include Guatemala.

Through Petrocaribe, oil-rich Venezuela provides nations with oil under preferential terms, including long-term loans and the option of paying for at least some of the costs with services or goods such as rice, bananas and sugar.

"It is an obligation to help the weakest" countries, Chavez said in a televised address.

"The United States would pay us US$200 a barrel for oil - give it to me then," said Chavez, whose nation is the world's 10th largest oil producer. "Now Haiti, no. Haiti gets preferential treatment. Socialism says: To everyone according to their needs."

Chavez said nearly 20 heads of state are attending a Petrocaribe summit in the Venezuelan city of Maracaibo this weekend, where Guatemalan President Alvaro Colom will formalize his country's membership.

Venezuelan Oil Minister Rafael Ramirez said the pact "strengthens nations in the region facing a difficult market," referring to oil prices that have topped US$140 a barrel.

In particular he touted some US$83 million that state-run oil company Petroleos de Venezuela has invested since 2006 to rehabilitate Cuba's Soviet-era Cienfuegos refinery.

Cuba's ambassador to Venezuela, German Sanchez Otero, said the project aims to boost Cienfuegos' refining capacity from 65,000 barrels per day to a total capacity of about 150,000.

Oil economist Mazhar al-Shereidah believes soaring prices have motivated countries including Guatemala to join. But the agreement is an economic "sacrifice" for Venezuela, he said.

Al-Shereidah added that while Chavez's critics say he is using the pact to expand his political influence in the region, such an effect may be minimal.

Referring to Chavez's 2006 bid to gain Venezuela a seat on the UN Security Council, al-Shereidah said: "None of his friends supported him."

Venezuela says it is sending more than 200,000 barrels of oil a day under Petrocaribe to 17 countries in Latin American and Caribbean. Member nations pay for half of the cost of the oil within 90 days, and for the other half in the next 25 years at a fixed interest rate of 1 percent.

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