Talks in Caracas between Russian President Dmitry Medvedev and his Venezuelan counterpart Hugo Chavez have yielded a host of bilateral agreements.

Dmitry Medvedev arrived in the Venezuelan capital late on Wednesday for a two-day visit, the first by a Russian head of state for 150 years.

The two parties signed a 25-year intergovernmental agreement on cooperation in oil, gas and power generation with an option to extend it for another five years, said Russian Deputy Prime Minister Igor Sechin, who is accompanying Medvedev.

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“Cooperation in the oil sector covers the entire chain from development and transportation to the construction of pipelines, equipment supplies and refining,” Sechin said.

The agreement also includes building hydro and thermal power plants, and support for mining projects, he added.

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Russian energy giant Gazprom and Venezuela’s state-run oil company Petroleos de Venezuela (PDVSA) signed an agreement on joint prospecting for oil at the Ayacucho-3 block in the Orinoco Oil Belt.

The two energy giants could launch talks to set up a joint venture after field data gathered from the Orinoco area has been evaluated.

Oil, jointly produced by PDVSA and a newly established Russian oil consortium that includes Gazprom, the country’s largest independent crude producer LUKoil and Russian-British joint oil venture TNK-BP, will be exported to the U.S., Chinese and European markets, said Vagit Alekperov, LUKoil CEO.

A memo of understanding was signed between the Russian United Shipbuilding Corporation and PDVSA Naval, a shipbuilding subsidiary of PDVSA.

The two countries also agreed to sign another intergovernmental agreement to set up a joint bank within the next two weeks, Medvedev said.

The joint bank could become an instrument to finance projects in Russia and Venezuela, and will handle payments for oil supplies and will involve Gazprombank, Russia’s third-largest bank.

The Russian president said Moscow and Caracas could switch to national currencies in bilateral payments.

“We have discussed with President Chavez the use of the national currencies, the ruble and the bolivar, in bilateral payments,” Medvedev said at a news conference in Caracas.

The two leaders also considered establishing reserves in the two currencies as bilateral trade between Russia and Venezuela reached $772 million in the first eight months of 2008.

Medvedev also said that the two countries intended to boost contacts in the defense sector, in line with international law.

However, the two leaders did not discuss the delivery of Russian submarines to Venezuela, Chavez said.

“We did not discuss submarines. We discussed surface vessels,” Chavez told reporters after talks with Medvedev.

Medvedev and Chavez will visit Russia’s Northern Fleet missile cruiser, the Pyotr Veliky, later on Thursday in Venezuela’s La Guaira port. The naval vessel leads a Russian task force due to take part in joint naval exercises in the Caribbean on December 1.

Medvedev will crown his Latin American tour with a visit to Cuba later on Thursday.