The Petrocaribe Alliance -- signed at a one-day summit in Puerto La Cruz, Venezuela -- will supply cheaper oil to member nations.

To do that, the agreement calls for the creation of a regional refinery network, overseen by Venezuela, to produce and ship oil to member nations, El Universal reported Thursday

President Hugo Chavez also pledged to pick up 40 percent of the cost of oil going to Petrocaribe countries if the price per barrel on the world market was higher than $50 a barrel as it is now.

He also said the agreement would lower costs by eliminating intermediary oil traders that inevitably lead to higher prices at the pumps.

Venezuela wants to share its energy potential with South America and the Caribbean, Chavez told leaders.

Two Caribbean nations -- Barbados and Trinidad and Tobago -- elected not to sign the Petrocaribe agreement Wednesday saying they needed more time to study its terms.