Venezuela agreed to supply Panama with natural gas and petroleum in a deal signed by their leaders on Thursday, just as Panama is experiencing one of its worst energy crises.
At a signing ceremony here, Venezuelan President Hugo Chavez described the deal as a historic one, and said he had already signed such agreements with Uruguay, Argentina, Cuba, Brazil, Jamaica and Bolivia, providing them with much-needed petrol at low prices.
"Venezuela's petrol will serve the Venezuelan people and also Latin American nations," he said in a long and emotional speech.
"We are willing to build a refinery in Panama, because at present our petrol reaches here via intermediaries who are getting rich as a result of this trade," Chavez added.
Chavez suggested to Panamanian President Martin Torrijos that the two countries create a joint venture to supply natural gas and fuel to Panama, while Colombia build a marine gas pipeline to the country.
Venezuela is the world's fifth largest oil exporter and has been the major supplier to the United States.
However, as diplomatic tensions are mounting with Washington, Chavez, a defiant left-wing leader, is actively seeking new outlets for the country's massive energy reserves as an countermeasure against the world's No.1 energy consumer.