- Associated Press - Friday, October 15, 2010

MOSCOW (AP) — Venezuelan President Hugo Chavez reached a deal with Russia on Friday to build a nuclear power plant in the South American country and negotiated several other agreements in energy and other areas.

Russia has cultivated close ties with Mr. Chavez’s government as part of its efforts to expand its global clout and counter U.S. influence in Latin America.

President Dmitry Medvedev said the nuclear deal would help Venezuela develop modern energy sources in addition to its hydrocarbon riches.

“Our intentions are absolutely pure and open: we want our partner Venezuela to have a full range of energy possibilities,” Mr. Medvedev said. “Even though the country is rich in oil and gas, it needs to develop new energy sources.”

The cost of the deal, signed after Mr. Chavez’s talks with Mr. Medvedev in the Kremlin, wasn’t immediately announced.

Mr. Chavez said that Venezuela needs to reduce its dependence on oil and gas and praised Russia for helping his country acquire new technologies.

In another deal signed after the talks, Russia’s state oil company Rosneft agreed to buy from Petroleos de Venezuela S.A. 50 percent in Germany’s Ruhr Oel GmbH, a 50-50 downstream joint venture between PdVSA and British BP. The Russian oil company will pay $1.6 billion for the stake, the company said in a statement.

Ruhr Oel holds stakes in four German refineries and petrochemical plants.

Rosneft president Eduard Khudainatov said in the statement that the deal will help Rosneft “expand our presence with high quality assets in key international markets”. The deal will leave 18 percent of Rosneft’s refining capacity “in the heart of industrialized Europe.”

Mr. Chavez’s government has bought more than $4 billion in Russian weapons since 2005, including fighter jets, helicopters and 100,000 Kalashnikov rifles. New weapons deals have been under discussion, but no new agreements were announced Friday.

Russia and Venezuela also have launched a joint business to tap vast oil deposits in eastern Venezuela, and Mr. Chavez has said that Moscow has agreed to help Venezuela draw up plans for a nuclear power plant.

Mr. Chavez will also meet with Prime Minister Vladimir Putin on Friday.

Associated Press Writer Nataliya Vasilyeva contributed to this report.

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