Venezuela's Chavez announces arms deal with Russia

Jul 22, 2008, 15:22 GMT

Moscow - Venezuela President Hugo Chavez announced new arms purchases from Russia and and agreed an energy partnership with Russian President Dmitry Medvedev on Tuesday.

'We want peace, but we have to strengthen our defences,' the president of the South American nation said at the start of a two-day visit to Moscow, the news agency Interfax reported.

Russian media reports said Chavez, who is known for his anti-US rhetoric, planned to negotiate the purchase of diesel-powered submarines, combat helicopters, tanks and Tor-M1 surface-to-air missiles.

The Venezuelan leader described Russia as 'a strategic ally' in the military and energy sectors and said cooperation between the two sides would guarantee his country's sovereignty.

Chavez and Medvedev looked on as officials from Venezuela's oil concern PDVSA and representatives of Russia's Gazprom, Lukoil and TNK-BP signed four cooperation agreements.

One of the deals covers drilling in Venezuela. Another provides for the creation of a joint venture to process energy supplies.

The talks between Medvedev and Chavez also covered cooperation in the financial sector where the two nations have been working on the formation of a joint bank.

Medvedev said the two heads of state also discussed the possibility of building a rail network for Venezuela with links extending to rest of South America.

Venezuela is considered the biggest recipient of Russian arms in South America, with purchases amounting to up to 4 billion dollars so far.

The new arms deals under discussion would have a value of around 2 billion dollars, according to the newspaper Kommersant.