Venezuelan President Hugo Chavez has promised new Paraguayan President Fernando Lugo "all the oil he needs" during a public event in Uruguay after Lugo was inaugurated on August 15.
The election of Lugo, a retired Catholic priest, on April 20 broke 61 years of domination by the right-wing Colorado Party.
Lugo won on the basis of his promises to fight poverty and corruption and has quickly become close to other Latin American left-wing governments critical of the United States.
The swearing in ceremony occurred on August 15 and the following day Chavez and Lugo travelled together to San Pedro, one of the poorest states of Paraguay, which is also a base for peasant and more radical organisations that frequently protest and occupy farms to claim land to work on.
The only Latin American governments not present at the inauguration were Colombian President Alvaro Uribe and Peruvian President Alan Garcia — the presidents considered closest to the US.
Chavez's promised oil deal involves raising the amount of barrels of oil that Venezuela sends to Paraguay to 25,000 barrels daily. The two presidents also discussed constructing a refinery in Paraguay.
The initiative formed part of a total of 12 agreements of cooperation signed with Paraguay.
Chavez saw the agreements as part of a "historic debt" to help with "the development of the Paraguayan people, their industry and agriculture".
Lugo and Chavez also agreed to incorporate Paraguay into Telesur (Television of the South), a Venezuela-pushed initiative for a Latin American-wide TV channel.
Another agreement was the creation of a fertiliser plant jointly with Venezuela to develop the region.
They also agreed to develop the "Mission Miracle 2" project, by creating two ophthalmology centres in Paraguay. The mission deals with the diagnosis and treatment of eye disorders and diseases.
Further, there was an agreement to implement a program of cooperation around food security and sovereignty, another to create a national agri-ecological institute, as part of the Energy Agreement of Caracas, and another about the environment.
Chavez also proposed to Lugo to start a literacy campaign, in which Venezuela is available to cooperate.
The agreements reached with Venezuela were amongst Lugo's first actions as president.
Chavez also requested the support of Paraguay for Venezuela's entrance into Mercosur (Common Market of the South).
Chavez called for the unity of the people of Latin America as a formula to be truly independent.
[Abridged from .]