Venezuela’s Hugo Chavez and Brazil’s Luiz Inacio Lula da Silva apparently put their heads together and worked out a compromise on ethanol at this week’s first-ever South American Energy Summit.

Bloomberg reports that South America’s 11 nations have agreed to promote biofuels production to supplement oil output in the region.

According to the story, leaders at the Summit, “agreed to create a regional alliance, to be known as the South American Union, as well as an energy council to regulate and promote cooperation in the sector.”

The summit leaders debated for an entire day over what media reports called an “impasse over conflicting views on the issue by Venezuela and Brazil.” However, Chavez denied that, saying he believes “ethanol is a valid strategy as long as it doesn’t affect food production.”

Venezuela is the world’s eighth-largest exporter of crude while Brazil is the world’s largest exporter of ethanol.