BY CHRISTINA HOAG
  Special to The Herald

  CARACAS - Venezuela is toughening the terms of its generous oil-supply deal with Cuba after the island has fallen repeatedly into arrears on payments, currently owing $142 million, oil industry sources said.

  State-owned oil company Petróleos de Venezuela, S.A. (PDVSA) stopped dispatching crude and refined products, including jet fuel, to Cuba around April 12 after the island defaulted on a $63.4 million bill.

  The outstanding debt has since increased to $142 million, industry sources said.

  Officials from Cupet, the Cuban oil company, visited Caracas earlier this month in an effort to renew the eight monthly cargoes, a spokesman for the Venezuelan Energy and Mines Ministry said.

  PDVSA officials agreed to give the Cubans short-term financing of the debt and renew shipments as of June, but imposed more stringent conditions on payment terms, the spokesman and other sources said. Details of the new terms were not available.

  ''This type of situation is not new,'' said the ministry spokesman, who requested anonymity. ``PDVSA has had these types of problems before with lesser-developed countries and is used to resolving these issues.''

  Venezuelan petroleum is crucial to Cuba, accounting for about a third of its consumption, or 53,000 barrels a day.

  The South American country has long been an oil supplier to Cuba, but in 2000 President Hugo Chávez struck a controversial bargain with Cuban President Fidel Castro. Venezuela agreed to give the communist nation up to 15 years to pay for a portion of the shipments at 2 percent interest and with a two-year grace period.

  The agreement, in which Venezuela agrees to accept letters of credit from the National Bank of Cuba, also allows the island to pay for another part of the supply in 90 days at 2 percent interest.

  Additionally, the pact permitted some of the oil to be paid for by barter, principally the services of Cuban medical doctors and sports trainers sent to Venezuela, and the treatment of seriously ill Venezuelans in Cuba.

  The barter clause was eliminated last year, with medical services now considered a goodwill donation by the Cuban government.

  Castro is both a mentor and close personal friend of Chávez, who once said life in Cuba was ``a sea of happiness.''

  The oil deal in particular has raised many hackles among Chávez's opposition, who see it as Chávez placing political affinity ahead of good business practices.

  ''The terms given to Cuba are more favorable than those given to other countries, such as [those in] Central America,'' said oil consultant Alberto Quiros Corradi. ``On top of that, they don't pay, so it's not in Venezuela's interest.''

  During last month's brief 48-hour ouster of Chávez, managers at PDVSA announced that they would immediately suspend the Cuba supply contract. Employees gathered at an assembly cheered and applauded.

  But PDVSA President Ali Rodríguez, a former leftist guerrilla, said upon taking the post last month that the Cuban contract would be honored.