Venezuela's Chavez: We Don't Want Pricier Oil

Venezuela is not interested in seeing oil prices rise further and is pushing to stabilize the market, President Hugo Chavez said after visiting the site of a Brazilian refinery being built to process Venezuelan crude.

The comments were a departure for Venezuela, which has been hawkish on prices and consistently opposed production increases as an OPEC member. It was not clear whether Chavez would support production increases to limit oil prices, which are trading around $107 a barrel for light, sweet crude.

"We are not interested in seeing the oil prices continuing to rise," Chavez said in a news conference with Brazilian President Luiz Inacio Lula da Silva. "We want to contribute to the stabilization of the prices."

Chavez said Venezuela has pushed in the past for a system to keep prices within a band, and that it worked for three years until the invasion of Iraq "pulverized it."

Chavez also said he hopes the U.S. economy recovers soon to keep the rest of the world from being affected. Venezuela is a major supplier of oil to the United States.

On Wednesday, Chavez announced that his government is prepared to provide billions of dollars to help build the refinery in the Brazilian state of Pernambuco slated to begin operating in 2010.

But plans by the two nations for expanded energy cooperation — with the refinery as an example — remain vague.

On Thursday, the presidents offered no further details on the refinery, while their respective state-run oil companies outlined only a few specifics on ownership and operation.

The refinery is expected to process 200,000 barrels of oil per day initially, with half coming from Venezuela and half from Brazil. Daily capacity could eventually rise to 400,000 barrels, Venezuela's official news service said.

Chavez and Silva laid the cornerstone three years ago for the Pernambuco refinery, which was originally to be funded 60 percent by Petroleo Brasileiro SA, and 40 percent by Petroleos de Venezuela SA.

But negotiations stalled over joint construction and operation, and last year Petrobras broke ground on the facility without Venezuelan investment.