The president's remarks came as the state petrochemical firm announced a plan to increase output from 11.5 million tonnes to 32 million tonnes a year by 2012.

"Venezuela has what it takes to be a world power in petrochemicals, and we're going to be just that," Chavez said at a swearing-in ceremony for new board members of Corporacion Petroquimica de Venezuela SA, commonly known as Pequiven.

Saul Ameliach, the company's president, announced investments of nearly $5.4 billion in 22 petrochemical projects, including construction of new plants and upgrades to existing ones.

Increased earnings

Chavez began the event by helping to shovel cement to start construction of a plant that will produce ammonia and urea in the northern state of Carabobo.

He has said Pequiven intends to increase its earnings tenfold to around $12 billion within six years.

Chavez used a phrase that he ascribed to Chinese communist leader Mao Zedong, saying that Venezuela's petrochemical industry "has started to walk with its own legs ... and later it will fly with its own wings".

The Venezuelan president also raised the idea of starting a South American petrochemical project with other governments.

"Why can't we talk about Pequi-sur - the petrochemical company of the south?" he said.

Chavez also remarked to his energy minister during the speech that "we're thinking about a strategic alliance in the area of petrochemicals with Brazil, with Bolivia".

Chavez has also proposed a network of South American natural gas pipelines, and has signed preferential oil deals with friendly governments throughout Latin America and the Caribbean.