Chavez promised highly preferential oil pricing for the 14 Caribbean members, with Venezuela picking up 40 percent of the cost if oil is selling at more than US$50 (HK$390) a barrel, as it is now.

If it should hit US$100 a barrel, Chavez said, "we would pay 50 percent for signatory countries, with a grace period extended from one to two years.''

He also pledged to foot the bill for shipping oil to Petrocaribe participants directly, and to help set up local storage facilities across the Caribbean.

Venezuela - OPEC's lone Latin American member - has a production quota of 3.1 million barrels a day.

Castro, 78, said the United States invaded Iraq to control its oil wealth.

"Now that they control all the oil, what is going to be left for developing countries?'' he asked. Developed countries, Castro argued, "control almost 100 percent of nuclear fuel.

"They say that they have the resources, that they will solve the problems. What they are going to produce is an enormous crisis.''

Chavez added: "The development model they keep imposing and forcing the world to adopt'' is not viable.

The Venezuelan leader was joined by Dominican President Leonel Fernandez and five prime ministers for the launch and a regional energy summit in Puerto La Cruz.

"I have spent my whole life making things up to survive,'' Castro said in the Venezuelan resort city, noting he had suvived various assassination attempts.

"I have been targeted for attacks for 40 years,'' he said. "This might be the only visit I have made on which there was no plan to attack me.''

Venezuelan Foreign Minister Ali Rodriguez said Petrocaribe was "an expression of Venezuelan oil policy'' and that its scope went beyond the existing San Jose and Caracas pacts.

Under the San Jose deal, Venezuela and Mexico guarantee 80,000 barrels per day at favorable rates to Caribbean and Central American nations. Under the Caracas deal, Venezuela ships out a similar or larger volume of oil to Caribbean nations, including Cuba, which Havana depends on to keep its economy afloat.

Rodriguez said there was a possibility Petrocaribe would include a "fund to contribute to social and economic activities to help resolve social and other problems in Caribbean countries.'' Venezuela, flush with petrodollars as prices soar, has long made the Caribbean it borders a top foreign policy priority.

But with Venezuelan governments of the past, the goal was containing Cuban communism. Now Cuba, still under Castro, is a key Venezuelan ally, and their joint policy framework is helping build regional economies in an "anti-imperialistic'' context.

Official delegations present in Puerto La Cruz for the summit were Antigua and Barbuda, Barbados, Bahamas, Belize, Dominica, Grenada, Jamaica, St Kitts-Nevis, Saint Lucia, StVincente and the Grenadines, Suriname and Trinidad and Tobago.

Venezuela also signed a deal with the Dominican Republic for 50,000 barrels a day to be supplied under privileged financial conditions.AGENCE FRANCE-PRESSE