Reports said the deal likely included plans for oil-rich Venezuela to supply crude to South African oil firm Petro SA at preferential rates.

The deal is particularly important for South Africa, which has been plagued by energy shortages.

Venezuelan President Hugo Chavez signed the agreement while on a state visit to South Africa.

Mr Chavez said the deal was an example of southern nations cooperating in a new strategic alliance.

"It will be a wonderful day, the day when the first Venezuelan tanker will stop by to leave oil for South Africa, " Mr Chavez said.

He also encouraged Petro SA to explore oil resources in Venezuela.

Empowerment

South Africa's President Thabo Mbeki said agreement would "further empowerment of the countries of the south" although he declined to say if South Africa would be getting preferential rates for oil from Venezuela.

"The object is to assist in reducing the costs of energy," he said.

In January, electricity shortages forced South Africa's gold and platinum mines to shut for five days.

BBC