Asuncion, April 24 (NNN-PRENSA LATINA) Paraguayan President Nicanor Duarte Monday defended the agreement the country has signed with Venezuela to build an oil refinery and to prospect for oil.

The signing of the agreement took place on April 16, during the First South American Energy Summit in the Venezuelan resort island of Margarita, and it envisages the building of an oil refinery at a cost of about 400 million to 600 million USD.

Duarte declared to the media that the objective of the refinery is to process 40,000 barrels of oil a day and to export refined products to nearby countries.

Paraguay and Venezuela will jointly build the refinery in Villa Elisa, on the outskirts of Asuncion, at the end of 2007. The refinery will be run by a joint venture set up by the Venezuelan State Oil Company, PDVSA, and Paraguayan counterpart, PETROPAR

The agreement includes other initiatives like the storage tanks in Rio de la Plata and the search of gas and crude oil in the Paraguayan region of Chaco.