Prime Minister Vladimir Putin arrived in Caracas on Friday to meet with the two main South American foes of the United States and launch a $20 billion venture to tap the Orinoco heavy oil belt.
Putin will discuss energy, agriculture and defense issues with Venezuela's leftist President Hugo Chavez and later meet Bolivian President Evo Morales, both fierce critics of what they call U.S. "imperialism" in Latin America.
Chavez said Moscow and Caracas will strengthen security ties to "continue increasing Venezuela's defense capability" and look at cooperating on nuclear energy.
"We are not going to build the atomic bomb, but we will develop nuclear energy for peaceful purposes. We have to prepare for the post-petroleum era," Chavez said at a cabinet meeting on Thursday evening.
Facing a national electricity crisis that has caused widespread power outages, Chavez's government is turning to Iran and Russia for help to develop nuclear energy.
Venezuela, South America's top oil exporter and a member of the OPEC oil producers' cartel, is seeking foreign investment and technology to tap its heavy oil deposits and loans to pay for Russian military hardware.
Since 2005, Venezuela has bought $4 billion worth of Sukhoi jet fighters, helicopters and Kalashnikov assault rifles.
Chavez, on his eighth visit to Moscow in September, got more than $2 billion in loans for more Russian weaponry, including tanks and the S-300 advanced anti-aircraft missile.
U.S. Secretary of State Hillary Clinton expressed concern last year that the weapons purchases from Russia by Venezuela, a major oil supplier to the United States, could trigger an arms race in the region.
Chavez says the United States could attack Venezuela for its oil reserves and his growing arsenal is aimed at countering a planned increase in the U.S. military presence at bases in neighboring Colombia, Washington's closest ally in the region.
The arms purchases are watched with concern by Colombia, which has stormy ties with Venezuela.
The highlight of Putin's visit will be the creation of a joint venture between Venezuela's state oil company PDVSA and a consortium of Russian firms to tap the Junin 6 field of the vast Orinoco oil belt, which Venezuela says has the world's largest hydrocarbon reserves.
The development will require $20 billion in investments over 40 years to produce 450,000 barrels per day, or almost a fifth of Venezuela's current oil output.
Venezuela said on Wednesday that the venture would begin producing 50,000 barrels a day by the end of the year.
The Russian companies involved in Junin 6 are state giant Rosneft, Lukoil, Gazprom, TNK-BP and Surgutneftegaz.
Caracas said the Russian companies would pay Venezuela a first tranche of $600 million on Friday — out of an agreed total of $1 billion — for the right to take part in the venture, in which PDVSA will hold a 60 percent stake.
To boost its sagging output from traditional wells, Venezuela needs to exploit the Orinoco belt, where the oil requires considerable upgrading to obtain lighter crude.
Putin's first visit to Venezuela, lasting just one day, is seen as part of a Kremlin effort to help Russian firms expand abroad and own oil assets all over the world.