By Oleg Shchedrov
MEIENDORF CASTLE, Russia (Reuters) - Russian PresidentDmitry Medvedev on Tuesday hailed closer relations withVenezuela's socialist leader Hugo Chavez, signing a raft ofbusiness deals bringing the two key oil producers and rivals ofthe United States closer together.
Arriving in Moscow earlier, Chavez pledged to pursue fresharms purchases to "guarantee the sovereignty of Venezuela whichis being threatened by the United States", but gave no details.
Medvedev and Chavez signed four deals between Russian oilcompanies and Venezuela's state energy firm PDVSA. These allowthe Russians to develop new deposits in the South Americancountry and pave the way for big infrastructure and engineeringprojects. Values were not disclosed.
Underlining the importance Moscow attaches to relationswith its anti-American partner, Medvedev said he and Chavezwould personally oversee a number of the key projects.
Russia, the world's No. 2 oil exporter, and OPEC memberVenezuela also agreed to cooperate on global energy marketswithout hurting the interests of consumers, Medvedev added.
"Russia and Venezuela are two very important oil and gaspowers and ensuring energy security depends on our concertedactions," Medvedev said after receiving Chavez at a stateresidence outside Moscow.
He also said the idea of creating an OPEC-like group forgas exports had not been fully abandoned. The idea haspreviously sent jitters across Europe and brought criticismfrom Washington, which said it could lead to pricemanipulations.
"We will take mutually coordinated and correct actions. Ourcooperation is not targeted against third countries," theRussian leader said.
ROUBLE CHALLENGE TO DOLLAR
An emotional Chavez, shaking hands and exchanging smileswith Medvedev, echoed the Russian leader's idea of making therouble a major reserve currency to challenge the dollar.
"The rouble must become a world currency," Chavez said. "Wein OPEC have proposed to put an end to the dollar."
In an implicit slap at the United States, whichtraditionally considers Latin America its zone of influence,Medvedev signalled the importance Russia attaches to relationswith Washington's main adversary in the region.
"Venezuela is now the most important partner of the RussianFederation," Medvedev said. "Our relations are a key factor ofregional security."
"We have one common task -- to make the surrounding worldmore democratic, fair and secure."
Chavez later showed off his cordial ties with Russianleaders, giving Prime Minister Vladimir Putin a hearty hug andturning into a joke his late arrival at his residence.
"But this is not my fault -- he (Medvedev) speaks more thanI do," quipped Chavez, known by his fiery and lengthy speeches.
"I did not remember, but as it turned out, he (Medvedev)was in New York during our very first meeting in the U.N. Hereminded me about it," he told Putin, inviting him toVenezuela.
Putin stepped down as Russian president in May afterserving eight years in office. Medvedev was elected presidentby a landslide after Putin asked voters to back his successor.
The closeness between Chavez and the Kremlin has alarmedVenezuela's neighbour Colombia, a close U.S. ally which hadhoped to persuade Russia to adopt a balanced stance in theAndean region.
Rows over U.S. plans to station a missile shield in Europeand NATO's intention to expand into Ukraine and Georgia havehurt ties between Moscow and Washington in recent years andincreased Russia's determination to seek allies to counter U.S.power.
Chavez, a former soldier who led an unsuccessful coup inthe 1990s before later winning election, wants to rearm theVenezuelan army with Russian missiles, tanks and dieselsubmarines and has already bought billions of dollars worth offighter jets, helicopters and Kalashnikov rifles.
Despite media reports that a big arms deal would be signedon Tuesday, a Russian government source said there was noguarantee anything would be finalised.
Chavez accuses Washington of planning a 2002 coup againsthim, while the United States accuses him of seeking out itsenemies -- such as Iran and Cuba -- as allies.
(Additional reporting by Denis Dyomkin)
(Reporting by Oleg Shchedrov, Writing by Dmitry Solovyovand Michael Stott; Editing by Ralph Boulton)
