Chavez has called on Moscow to help lead a worldwide revolution against the US [AFP]

Hugo Chavez, the Venezuelan president, and Dmitry Medvedev, his Russian counterpart, watched the signing of deals between state energy companies in the southern city of Orenburg on Friday.

Chavez is also expected to watch a Russian military exercise during his second visit to Russia in just over two months.

Moscow has signed contracts worth more than $4.4bn with Venezuela since 2005 to supply arms including fighter jets, helicopters, and 100,000 Kalashnikov assault rifles.

The Kremlin said on Thursday that Russia is granting Venezuela a $1bn loan for the purchase of Russian weaponry.

Gazprom investment

The arms purchases have sparked concern in the US and among some of Venezuela's neighbours, including Colombia which has accused Venezuelan officials of supporting left-wing armed groups.

Heads of Venezuela's state oil company Petroleos de Venezuela (PDVSA) and Russia's state gas monopoly OAO Gazprom signed a memorandum of understanding that Gazprom said allowed for greater co-operation between the companies.

The energy ministers signed a separate memorandum calling for the establishment of a body that would oversee broader co-operation in oil and gas between the energy-rich nations.

Gazprom has invested $100m in Venezuela, Alexei Miller, the Gazprom chief, said on Russian television after the signing.

He said an agreement to create a consortium linking PDVSA with Russia's top oil and gas companies was in the works and could be signed in the coming months, with Gazprom likely to lead the Russian side.

Venezeulan support

Chavez is on a trip that has already taken him to Cuba and China along with Russia, whose war with Georgia has damaged relations with the US.

A Russian naval squadron is on its way to Venezuela, and Russia sent two strategic bombers there earlier this month.

The western hemisphere deployments are a pointed response to the US use of military ships to bring aid to Georgia, and aspects of what the Kremlin casts as threatening US encroachment near its borders.

Chavez thanked his "friend" Medvedev on Friday and reiterated his backing for Russia's actions in the Russia-Georgia war.

"I would like to use this occasion to offer our full, modest but completely solid support for Russia's actions" in the Caucasus, said Chavez, adding: "We understand how the people of South Ossetia were attacked."

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