Venezuela and Spain have signed a multi-million euro energy deal, which will provide Madrid with oil, and Venezuela with a new power plant. It creates a new joint venture to produce 24,000 barrels of oil and 700,000 cubic metres of natural gas a day. The wide-ranging deal also sees Venezuela taking over Spanish-owned electricity and gas plants.

“We have reached an agreement to work together to build peace and stability in Latin America, to anchor the strategic relationship between Latin America, the Caribbean and European Union when Spain assumes the presidency of the EU in January,” said Spanish Foreign Minister Miguel Angel Moratinos. Venezuela is the fifth-largest oil producing country in the world. Exports have funded President Hugo Chavez’s social revolution, although income has fallen during the recession. The contract also allows Spain’s Repsol energy company to look for oil in the Orinoco River basin where there are thought to be huge reserves. Environmentalists have condemned plans to drill in the jungle.