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Paraguay will receive up to 18,600 barrels per day of Venezuelan oil and refined products according to the energy cooperation agreement signed by the governments of both countries. Hugo Chávez and Nicanor Duarte, presidents of Venezuela and Paraguay respectively, delivered speeches in support of South American integration last Wednesday in Caracas.

“We have to deepen and accelerate the subscription of agreements like this one. We need to create instruments for an integration that liberates. For years, we have spoken about the need for an energy supply alliance in our continent. South America, our South America, is the reservoir of the world’s largest deposits of energy resources of all kinds”, said Chávez. He affirmed that his country has committed itself to supplying “Paraguay to the last drop of fuel it may need”.

Chávez urged the Paraguayan president to work in favor of Latin American integration, in order to avoid being dominated by the North. He called once again for the creation of a South American development bank, instead of the “fool’s game” of keeping a country’s reserves in international banks, that according to the president, use them to grant loans to other Latin American countries “at interest rates and under terms little better than a looting”.

Meanwhile, Duarte points out that “there is a renewed vision in Latin America, and we have leaders who see integration as the only path to follow”.

The Caracas Energy Agreement, also subscribed by several oil importing countries, establishes a one year term of preferential sales of oil to Paraguay under preferential conditions. According to an official statement, the agreement establishes 90 day financing for the first short term payment, 15 years for long term payments, and 2% annual interests with a two year grace period for the first payment of principal.

Gas oil will be delivered by the Venezuelan state owned company Pdvsa in the Rio de la Plata river. “We will not need intermediaries. This will allow us to save much money”, the Paraguayan president assured. The terms of delivery had delayed the negotiations for several months, upon the insistence by the Paraguayan public company Petropar that the diesel fuel be delivered in a Paraguayan river port.

Published in Quantum N.41