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Chavez Establishes Oil Office in Havana

In Havana Thursday, Venezuelan President Hugo Chavez officially established an office of Petroleos de Venezuela, the state-owned oil company, to serve the Caribbean region. The move drew fire from Chavez opponents in Venezuela who oppose closer relations with the communist government of Cuba.

Hugo Chavez, left, and President Fidel Castro greet people at inauguration of offices of PDVSA in Havana
Venezuela's government-run television station on Thursday provided a live broadcast from Havana where President Chavez, wearing a bright red shirt, chatted and joked with his host, Cuban President Fidel Castro. Mr. Chavez said the establishment of a Venezuelan oil company office in Havana will benefit not only Cuba, but the entire region.

He said this was one more step towards regional integration free of what he described as the colonial control of Washington. Mr Chavez calls this new integration The Bolivarian Alternative for the Americas, a trade pact that would rival that being proposed by the United States and known as the Free Trade Area of the Americas.

The office of the Venezuelan oil company in Cuba would serve as a base for development of possible petroleum deposits in Cuba's Gulf of Mexico territorial waters, where a Spanish company has already been working. If a significant oil field were to be found and developed there, it could provide a much-needed boost to the Cuban economy, which has never fully recovered from the ending of subsidies from the Soviet Union at the end of the 1980's.

More immediately, the Venezuelan oil office in Havana would be the place regional nations would visit to conduct business related to their purchases of Venezuelan petroleum. But Chavez critics here in Caracas were quick to question the arrangement, noting that Venezuela has a Caribbean coast and is just as close to the island markets as is Cuba.

Opposition Congressman Julio Montoya said this was just another case in which Cuba has taken advantage of Venezuela's government. He says there is no justification for opening an office for Venezuela's oil company in Cuba, which he noted does not even have diplomatic relations with half the countries in the Caribbean. Mr. Montoya said Cuba has few automobiles and does not represent anywhere near as a good market for Venezuela as the United States, with which Mr Chavez has had rocky relations.

Under the government of Hugo Chavez, Venezuela has provided badly needed oil to Cuba with preferential prices. Venezuela's energy minister says the flow of oil to Cuba has now reached 80,000 barrels-of-oil-a-day. Cuba has sent more than 14,000 doctors to Venezuela to improve public health and has also provided assistance in education and other social programs, but has paid little in cash for Venezuelan oil.