Chavez: Venezuela, Libya creating $1 billion fund

October 26, 2010 2:20 AM ET

By IAN JAMES

CARACAS, Venezuela (AP) - Venezuelan President Hugo Chavez said his government is creating a $1 billion joint fund with Libya to pay for projects that the two countries will pursue together.

Chavez announced the investment fund along with a similar $100 million joint fund with Syria as he reviewed the results of his latest seven-nation tour in a marathon speech Monday night.

He did not give details of how the funds would be spent but noted that pending projects with Syria range from helping build an oil refinery to setting up a plant for processing olive oil, both in the Middle Eastern country.

Chavez rebuffed criticism by political opponents who argue he is pursuing wasteful giveaways and misguided projects among the 69 accords signed during his trip in areas from oil to nuclear energy.

"No one can say we're giving anything away, not a single drop of oil. They're legitimate, transparent and clear agreements that benefit all of us," Chavez said.

He praised a deal for Russia to help build a nuclear reactor in the South American country, saying Venezuela — which relies mostly on hydroelectric power for electricity — needs new energy sources. It remains unclear how much Chavez intends to spend on the reactor, or how soon it could be built.

Venezuelan officials also signed contracts with companies from Russia, Iran, Belarus and Portugal to build 37,000 homes in the South American country, Chavez said. With Russian help, the government plans to build 10,000 public housing units inside the Fort Tiuna military base in Caracas — a high-rise complex intended to help remedy a severe housing shortage. "We're going to create a great city in Fort Tiuna," Chavez said.

Russia and Venezuela agreed to set up a joint state bank, and Chavez said Russia will help Venezuela "start to exploit one of the biggest gold mines in the world," the Las Cristinas mine. He did not give details about projected investment.

Chavez says he and his allies are opposed to U.S. "imperialism" and are seeking to create a new world order free from U.S. economic and political domination.

The top buyer of Venezuelan oil is still the United States, but Chavez has said his country has increased oil shipments to China to about 500,000 barrels a day and aims to double that in the coming years.

During his speech, Chavez said the Houston-based oil company Citgo Petroleum Corp., which is owned by Venezuela, is "bad business" for his government because it doesn't deliver enough dividends. He questioned how much the company would fetch if it were sold along with its refineries and thousands of U.S. service stations.

"Imagine if you sell eight refineries," Chavez said. "Citgo shouldn't cost any less than $10 billion."

Chavez has for years been seeking to nudge Venezuela's oil market away from its heavy reliance on the U.S. while extending preferential supply agreements to allies.

Among other cooperation agreements, Venezuela will begin planting olive groves with help from Syrian advisers, and will start shipping coffee and bananas to Russia, Chavez said. During his speech, bunches of bananas, coffee containers and olive oil were displayed on television.

Chavez taunted his political opponents, saying those who ridicule his international deals are off-base.

"Go ahead and make fun," Chavez said. "He who laughs last laughs best."