Chavez, El Salvador leftists launch energy venture

San Salvador, Apr 6: Left-wing mayors in El Salvador joined Venezuela to create a joint venture that will provide the poor Central American nation with cheaper fuel, in counter to US free-market policies.

Venezuelan President Hugo Chavez, an ally of Cuba and a fierce critic of ''imperialist'' US foreign policy, has reached out to Latin American and Caribbean neighbours with scores of such accords as part of his self-styled socialist revolution.

The new company, Alba Petroleos de El Salvador, was started with 1 million dollars, 60 per cent of that funded by Venezuelan state oil firm PDVSA and the rest by a municipal energy association in El Salvador.

Last month Chavez signed the energy deal with mayors and representatives from the Farabundo Marti National Liberation Front party or FMLN.

It allows Venezuela to ship as much as 3,000 barrels a day of petroleum products to provide cheaper fuel to the communities involved.

Carlos Ruiz, the mayor of Soyapango, one of 16 communities that formed the energy alliance, said Venezuela will be able to meet 35 per cent of El Salvador's fuel needs.

But El Salvador President Tony Saca, an ally of Washington who has troops fighting in the US-led war in Iraq, has been skeptical about the long-term benefits for El Salvador's communities of the Venezuela deal.

Yesterday he said Mexico's oil monopoly Pemex was willing to enter into similar deals with local communities and distributors in El Salvador, but provided no details.

US officials say Chavez is using Venezuela's oil wealth to spread an anti-capitalist, anti-democratic message.

The FMLN, which opposes closer ties to Washington, fought a guerrilla war against US-backed right-wing governments in 1980-92 in which around 75,000 people died. While still hindered by its violent past, the FMLN has long been the country's second-largest political party.

Venezuela, the world's No 5 oil exporter, has already signed deals with Cuba, Brazil, Uruguay, Argentina and a dozen Caribbean nations, sometimes exchanging oil for goods such as livestock or food imports.

REUTERS