Venezuelan President Hugo Chavez offered Wednesday to help Uruguay expand a refinery and supply it with crude oil.

Chavez and visiting Uruguayan President Jose Mujica are expected to sign accords pledging to deepen trade and energy ties between the two South American nations.

Venezuela's socialist president has often expressed admiration for the 74-year-old Mujica, a former leftist guerrilla leader who took office last month.

Chavez said Venezuela will renew a deal to sell Uruguay up to 40,000 barrels of oil a day under preferential terms.

"The entire consumption of Uruguay doesn't surpass 40,000 barrels a day," Chavez said before he met with Mujica at the presidential palace.

Chavez said he and Mujica also would discuss Venezuelan help in expanding Uruguay's La Teja refinery. He said it should be upgraded with equipment allowing it to refine heavy crude from Venezuela's eastern Orinoco River basin.

Since 2005, Uruguay has had an accord allowing it to finance 25 percent of the oil it buys from Venezuela for 15 years at 2 percent interest.

Chavez also had friendly relations with Uruguay's last president, Tabare Vazquez, and in 2007 Venezuelaagreed to sell Uruguay more than $1 billion worth of oil.

Chavez said Uruguay has been helping Venezuela in agriculture and technology.