Cuba and Venezuela signed cooperation deals worth nearly $3 billion on Saturday, underscoring Caracas' role as the communist-run island's closest political and commercial ally.

Venezuela, an OPEC member, has become a vital source of energy and trade for Cuba in recent years and it exports 98,000 barrels of crude a day to the cash-strapped Caribbean nation on favorable financing terms.

We've signed 264 contracts worth a total of $2.951 billion, Venezuelan President Hugo Chavez said in a televised speech, saying another 20 similar agreements would be inked later this month.

The cooperation deals relate to health, fishing, education and sports projects and the countries will also form at least seven joint state-run companies in the sugar, aluminum, transport and farming industries.

Cuba, which is heavily dependent on imports of fuel and food, pays part of its Venezuelan oil bill with the services of 40,000 doctors and other professionals.

Chavez has joined Cuba in promoting leftist revolution as an alternative to U.S. free-market trade proposals and the two nations are at the heart of the ALBA alliance, which aims to promote cooperation among leftist regional governments.

Chavez and Raul Castro, who took over the presidency from his ailing brother Fidel last year, will be joined on Sunday by other members of the ALBA group, including Bolivian President Evo Morales.

Trade between Cuba and Venezuela reached $5.28 billion last year, compared with $945 million in 2003, according to statistics from the Cuban government.

(Reporting by Rosa Tania Valdes and Helen Popper; editing by Todd Eastham)