Analysis: Venezuela expands influence

By CARMEN GENTILE, UPI Energy Correspondent  |  Jan. 30, 2008 at 12:20 PM
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MIAMI, Jan. 30 (UPI) -- Venezuelan President Hugo Chavez recently announced his country's decision to build a refinery on the Caribbean island of Dominica, part of his effort to further integrate the region's energy supplies.

Chavez said Dominica's refinery would be a jumping-off point for distributing Venezuelan oil to other eastern Caribbean countries.

The capacity of the proposed refinery was not announced during the recent meeting between Chavez and Dominican Prime Minister Roosevelt Skerrit.

However, Chavez did announce Dominica had joined the alternative trade bloc founded by Venezuela and Cuba known as the Bolivarian Alternative for the Americas, or ALBA.

ALBA presents itself as an alternative to the U.S.-backed Free Trade Area of the Americas, which has been stalled in negotiations for several years and has yet to be implemented.

"ALBA continues to grow as a new geopolitical, geoeconomic area and seeks the construction of a better world for those of us in the Caribbean and Latin America," Chavez said earlier this week.

Awash with petrodollars, particularly now with oil prices remaining near record highs, Venezuela has sought to expand its influence in the Caribbean through its discount oil initiative known as Petrocaribe.

Launched in 2005, the agreement allows Caribbean member nations to purchase Venezuelan oil at a deeply discounted price, a deal that has alleviated many Caribbean nations' energy woes and lessened their dependence on U.S. financial aid.

Cuba has been among Petrocaribe's biggest beneficiaries, along with the Dominican Republic, Jamaica and Nicaragua.

The Dominica refinery initiative is just the latest effort by Chavez to draw regional neighbors closer through his country's petroleum bounty. In December, Venezuela announced it would help Cuba get a Soviet-era oil refinery back online after decades of dormancy.

The plant went back online with the help of Venezuela and some $136 million in repairs funded by Caracas; it is believed to be capable of processing some 65,000 barrels per day. Venezuela meanwhile sends about 100,000 bpd to Cuba as a discounted price, part of the Petrocaribe agreement.

Cuban officials have lauded the return of operations at Camilo Cienfuegos, though some say the plant may still need work before becoming fully operational.

"It was a mess, that refinery," said Larry Birns, director of the Council on Hemispheric Affairs in Washington and noted expert on Cuba.

Chavez is an ardent supporter of improving Cuba's oil-producing capacity amid much international speculation about the island's potential offshore petroleum reserves. So far, five international oil companies have paid reserve fees to the Cuban government to secure exploration rights there.

In 2007, during the Non-Aligned Movement Summit in Havana, Chavez said Cuba's potentially lucrative offshore oil reserves could one day catapult the island onto the world petroleum stage and maybe even earn the country a place in the Organization of Petroleum Exporting Countries.



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