President Hugo Chavez has spread political influence with the oil deals, which include the Petrocaribe accord and a separate agreement with socialist ally Cuba.

Speaking at a Petrocaribe meeting ahead of a regional summit in Caracas, Oil Minister Rafael Ramirez said Venezuela aims to ramp up its storage capacity in the region to 1.17 million barrels per day (bpd), from 244,000 bpd currently.

It also aims to increase its refining capacity four-fold to 548,000 bpd, from 135,000 bpd now.

Ramirez said Petrocaribe was “one of the main reasons why countries in the area have been protected from the terrible situation that has plagued much of the world economy.”

But the minister said there were no immediate plans to increase the amount of oil supplied under the deal, which added to the crude sent to Cuba amounts to almost 200,000 bpd.

Venezuela’s decision to increase its Caribbean storage and refining capacity comes three years after its state oil company PDVSA sold the Borco terminal on the island of Grand Bahama.

In terms of refining, the South American OPEC member currently has minority stakes in the Cienfuegos facility in Cuba, Jamaica’s Petrojam and Refidomsa in Dominican Republic.

It plans to expand Cuba’s Hermanos Diaz refinery, as well as build a third refinery on the island and one in Nicaragua. But the completion dates have been pushed back several times.

PAYMENT IN KIND

Chavez is aiming to win a new six-year term at an election next October. His rivals in the opposition have been scathing about the cheap oil deals, especially with communist-led Cuba, and are expected to cancel most of them if they win power.

Ramirez said Petrocaribe shielded its members from the volatility of oil prices, which no longer responded to market fundamentals of supply and demand.

He said officials were looking into ways that more participants could pay Venezuela for its crude in kind.

“We looked at all the free trade mechanisms, that is to say, compensation in goods, food and services,” he said.

“We’ve had an exchange like this of $870 million this year, especially in food … We’re going to increase compensation in goods and services. We’ve already had concrete experiences with Nicaragua, Guyana, El Salvador and Dominican Republic.”

Venezuela was always discussing how to begin supplying the region with up to 100,000 tons of fertilizer a year, he said.

Separately, Ramirez said PDVSA had signed an agreement for three Argentine companies – YPF SA, Pluspetrol and Enarsa – to work in mature oil fields in eastern Venezuela, and for PDVSA to exploit crude oil and shale gas in Argentina.

“It’s a new experience for us,” he said.