South America's 11 nations agreed Tuesday to promote biofuels production to supplement oil output in the region, ending a two-day impasse over conflicting views on the issue by Venezuela and Brazil.

"We have reached a consensus so that in the final declaration, the use of biofuels is encouraged," Chilean Energy Minister Marcelo Tokman told reporters in Porlamar, Venezuela, where leaders are this week holding the first South American Energy Summit.

Energy and finance ministers debated for 11 straight hours Monday, weighing Venezuelan President Hugo Chavez's concern that increased ethanol output would cut food supplies and worsen poverty. Chavez has said President Bush and Brazil's Luiz Inacio Lula da Silva's ethanol accord is "true craziness," destined to drain agricultural output and tighten a U.S. grip on Latin American resources.

Chavez on Tuesday denied any impasse on the issue, backing hybrid fuels as a way to promote increased oil and biofuels production. He said the plan can boost both oil- and agriculture-based economies.

"The press is saying there's an ethanol war," Chavez said. "No. Ethanol is a valid strategy as long as it doesn't affect food production."

Chavez also called for the construction of 13 new Latin American oil refineries to reduce reliance on U.S. processing plants. He said ethanol plants should be built next to the refineries to boost output of gasoline blended with ethanol.