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. Last Updated: 07/27/2016

Putin Seeks Energy Deals on Venezuela Trip

Russia will cement energy and arms ties with Latin America when Prime Minister Vladimir Putin travels to Caracas this week to meet two of the United States' biggest foes, Venezuelan and Bolivian Presidents Hugo Chavez and Evo Morales.

The two leftist leaders can view Putin's visit as a boost after U.S. Secretary of State Hillary Clinton said last month that Washington's critics were losing force in the region.

Kremlin watchers will be also tracking comments by Putin on ties with Washington and specifically on a landmark arms-control treaty that Presidents Dmitry Medvedev and Barack Obama have agreed to sign in April.

"It is always a good chance for Putin to show to the United States that we have a lot a friends all over the world," said Fyodor Lukyanov, editor of the magazine Russia in Global Affairs.

Caracas and Moscow said one-day talks between Putin and Chavez would focus on energy, agriculture and defense. Putin's office also said energy would be at the center of talks with Morales, who will meet Putin in Caracas, also on Friday.

Venezuela, South America's top oil exporter, is seeking funds and technology to help develop its oil deposits, as well as loans to buy Russian military hardware.

"We should expect a lot of big arms and energy contracts. When Putin has traveled recently to centers like India he brought back a lot," Lukyanov said.

Putin secured $10 billion in energy, nuclear and arms deals in India last month.

Chavez traveled to Moscow in September to receive more than $2 billion in loans for weaponry, including tanks and the S-300 advanced anti-aircraft missile.

During the trip, he announced that Venezuela recognized two pro-Russian rebel regions of Georgia as independent states, a rare diplomatic success for Moscow, which has tried unsuccessfully to persuade its allies to extend recognition to South Ossetia and Abkhazia.

Clinton expressed concern in September about Venezuelan arms purchases and their potential for triggering an arms race in the region.

Venezuela wants to beef up its arsenal to resist what Chavez terms U.S. imperialism in Latin America, though tensions have also been rising with neighboring Colombia, a close U.S. ally and historic rival of Venezuela.

"Russia sees the strengthening of its positions in this region as an extremely important and good answer to the widening U.S. influence in Central Asia," said Alexei Mukhin, who directs the Center for Political Information, a think tank.

In February, a consortium of Russian firms and Venezuela's state-run PDVSA agreed to set up a venture to tap the Junin 6 oil field in the 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 one-fifth of Venezuela's current oil production. It will involve state giant Rosneft and private major LUKoil.

Valery Nesterov, an analyst at Troika Dialog, said private Russian oil producers were struggling to expand on home turf because of limited access to big deposits and tax uncertainty.

"In Venezuela the geology is good, reserves are great. From that point of view, the conditions are ideal there, though this does not, of course, remove concerns about political risk."