By Michael Place

Vietnam will invest in Venezuelan food production in exchange for cut-price crude oil imports, under a deal struck by the country's leaders.

The accord aims to "facilitate business operations across energy, oil and gas, agriculture and fisheries," the official Viet Nam News agency said on Tuesday.

Caracas also pledged its commitment to the Orinoco belt's Junin 2 heavy oil project, in which state-run PetroVietnam holds a 40% stake alongside Venezuela's PDVSA, the agency said.

The cooperation agreement was made during talks between Vietnam President Truong Tan Sang and his Venezuelan counterpart Nicolás Maduro in the Vietnamese capital Hanoi.

The leaders also agreed to work together in the defence, manufacturing, infrastructure, construction and electrical sectors, according to the agency.

Maduro is attempting to drum up international support for his beleaguered government, which is battling dire product shortages and triple-digit inflation.

On Tuesday he arrived in Beijing for talks with Chinese President Xi Jinping.

PETROCARIBE

Hanoi said Venezuela agreed to add Vietnam to the PetroCaribe alliance, which currently provides discounted oil to 17 Caribbean and Central American nations.

The move comes despite growing doubts over Venezuela's capacity to continue the program amid a sharp fall in oil prices.

Maduro and Sang also outlined plans to increase annual trade between the nations to more than US$1bn by 2018. The current figure stands at less than US$100mn a year, according to official data.

The Venezuelan leader said Vietnam's agriculture investments would boost local poultry, beef, milk, rice and fish production.

He also raised the prospect of new joint projects involving PDVSA and PetroVietnam.

"We have discussed widening our strategic alliance in the field of energy. Through that alliance, we will be able to discuss Vietnam's new oil and petroleum projects in Venezuela," Maduro told government-backed television service Telesur.

It is not the first time Venezuela has used oil in bilateral trade for food, although previous deals have focused on imports of packaged goods.

In July, Caracas agreed to allow Uruguay's national oil company Ancap to buy Venezuelan crude in exchange for rice, powdered milk, soybeans, chicken and cheese.

The country also has an agreement with Nicaragua to exchange oil for coffee beans.

Source: AFP