Venezuela's Chavez urges Brazil to offset US ties

By Guido Nejamkis

MANAUS, Brazil, Sept 20 (Reuters) - Venezuelan President Hugo Chavez urged Brazil on Thursday to accelerate trade and energy integration with his country to help counterbalance U.S. interests in the region.

The leader of the oil-rich Caribbean nation criticized Brazil for dragging its feet on his proposal to build a $20 billion pipeline from Venezuela to Argentina that would supply much of South America with gas.

"We are very surprised there are people here that oppose (the pipeline)," Chavez said in the northern Brazil city of Manaus before a meeting with his Brazilian counterpart Luiz Inacio Lula da Silva.

"Venezuela has 80 percent of South America's proven gas reserves -- let the Brazilians know that," he said.

The two left-wing leaders favor South American integration as a counterbalance to the trade interests of rich countries but Lula has repeatedly distanced himself from Chavez's anti-market and nationalist policies.

Chavez blamed the delays on Brazil's state-owned oil company Petrobras (PETR4.SA), which had asked Venezuela to have its gas reserves certified before it would join the project he proposed years ago.

"Petrobras has many opinions I sometimes don't understand," Chavez told reporters.

Without the 8,000-km (5,000-mile) pipeline "lights will go out" for South American neighbors because the world is entering an energy crisis, he said.

Chavez also urged Brazil's Congress to approve Venezuela's entry into the South American trade bloc Mercosur, which is made up of Brazil, Argentina, Uruguay and Paraguay.

The delay had become a political problem, said Chavez, adding that Venezuelan imports from its southern neighbor had increased 300 percent in recent years.

In May, the former coup leader accused Brazilian legislators of being puppets of Washington for criticizing his closure of an opposition TV channel.

"Only the United States will benefit if Venezuela does not enter Mercosur," said Chavez.

The majority of Brazilian businessmen support Venezuela's entry into Mercosur, a poll conducted by the Brazil-Venezuela chamber of commerce, showed on Thursday. But some entrepreneurs fear the sabre-rattling Chavez could scare off new potential trading partners, such as the European Union.