President Fidel Castro made a surprise appearance at the conference

Venezuela, the world's fifth largest oil exporter, is offering to supply fifteen Caribbean countries with fuel at cheap prices.

Venezuela already supplies a number of Caribbean countries with oil on preferential terms.

Officials say the first aim of the new company, Petrocaribe, will be to improve on those arrangements by cutting out the intermediaries.

But they say it will also seek to develop joint projects in exploration, drilling and refining.

Fifteen countries are taking part in the meeting, including the heads of government of Jamaica, Cuba, Grenada Trinidad and Tobago, the Dominican Republic, Dominica and St. Vincent and the Grenadines.

Solidarity

Trinidad and Tobago Prime Minister Patrick Manning said his country also was willing, in principle, to share its oil.

But he said would like to analyse Mr. Chavez's proposal in greater detail because it could put his country at a competitive disadvantage.

Cuban president Fidel Castro called the plan an important step toward greater solidarity, "the only method of survival for our countries" as oil prices continue to rise.

Mr. Chavez said the region had suffered centuries of imperialism, and was now striking out on its own.

However critics say he is using Venezuela's oil to secure diplomatic influence in the region.

Mr Chavez has defended the Petrocaribe plan - and a similar South American joint venture called Petrosur - as a way to help both Venezuela and the region.