Iran cements warm ties to Caracas with oil deals

TEHRAN, July 30 (Reuters) Venezuelan President Hugo Chavez today enveloped his Iranian counterpart Mahmoud Ahmadinejad in a bear hug, as the two men planned to underscore their anti-US rhetoric with a series of investment deals.

In a typically wordy speech, the robust ex-paratrooper lambasted their common enemy, Washington.

''If the US empire succeeds in establishing its dominance, there will be no future for humanity. Therefore, we should save humanity and end the American empire,'' Chavez told a crowd at the University of Tehran.

Chavez also lambasted Israel, arch-enemy of Iran, for its offensive against Lebanon as ''both fascism and terrorism''. This chimed with the tone of Iran's president who has compared Israel's conduct to that of Adolf Hitler.

A beaming Ahmadinejad presented Chavez with the golden ''High Medallion of the Islamic Republic of Iran'' and slipped a blue sash around his chest.

''Mr Chavez is my brother, the brother of the whole Iranian nation and of all freedom-seeking people in the world,'' he said.

''He is a perpetual warrior against the dominant system, a worshipper of God and a servant of the people,'' he added.

Chavez and Ahmadinejad are both ex-military populists who take a hawkish price stance in the OPEC oil cartel. The two men enjoy a close personal rapport.

Both Iran and Venezuela frequently boast they are steeled for any military assault the United States might launch.

Venezuelan Energy and Mines Minister Rafael Ramirez echoed the defiant spirit by threatening to cut oil exports to the United States if Washington did not drop its hostile stance towards Chavez's administration.

MORE THAN RHETORIC However, there was more than Yankee-bashing on the agenda with a ceremony planned for contract signing later today.

Iran's Oil Minister Kazem Vaziri-Hamaneh said Iranian firm Petropars would invest billion in two Venezuelan energy projects.

Petropars is already certifying some tarry crude in the Orinoco Belt and is looking to develop reserves there. It is also seeking to supply training and services to the Norte de Paria offshore gas field.

However, it was not immediately clear what contracts would be signed with Chavez also discussing co-operation on pharmaceuticals and tractors.

Ramirez mentioned the possibility of exporting petrol to gas-guzzling Iran. Although the world's number four crude oil exporter, Iran lacks the refinery capacity to produce enough gasoline for itself.

Iranian investors have already poured 1 billion dollars of investment into Venezuela, primarily in sectors such as energy, construction and tractor-building.

Although commercial deals are proceeding, some analysts have remarked Chavez's dependence on the United States as a buyer for his oil will probably keep him clear of striking any arms deals with Tehran. Caracas is looking mainly to Russia for weapons.

REUTERS PKS PM1906