Published by Reuters

By Marianna Parraga and Andrew Cawthorne

CARACAS, Nov 28 (Reuters) - The presidents of Venezuela and Colombia announced on Monday the capture of one of the region's most-wanted drug traffickers and touted it as evidence that their ideologically opposed governments were united against crime.

Maximiliano Bonilla Orozco—a 39-year-old Colombian better known by his alias Valenciano—was captured in the Venezuelan city of Valencia late on Sunday, the two leaders said at a meeting in Caracas.

Valenciano, with a $5 million bounty on his head, is accused of shipping tonnes of cocaine into the United States with the help of gangs like Mexico's Zetas.

"He's caused terrible damage to our country," said Colombian President Juan Manuel Santos, adding that Valenciano was the leader of a group called the Paisas, as residents of northwestern Colombia are known.

"Thank you, President Chavez. This is a good present."

Though the conservative Santos is a key U.S. ally and socialist leader Hugo Chavez is Washington's fiercest critic, the pair have overturned years of mistrust and forged a strong, pragmatic, relationship since last year.

Colombia has in the past accused the Chavez government of giving refuge to Marxist guerrillas, and analysts believe Venezuela has at least turned a blind eye over the years.

Venezuela also has become a major shipment route for Colombian cocaine to the United States and European nations.

But since Santos came to power in August 2010, both leaders have set aside their ideological differences and stressed the need for cooperation in a border region infested by rebels, drug traffickers and other criminal bands.

OIL COOPERATION

After five hours of meetings between their delegations, Chavez and Santos also signed a dozen cooperation accords in oil, gas, trade and other sectors.

Among them was an agreement for Colombia's state oil company Ecopetrol to join Venezuelan counterpart PDVSA in some mature field projects in Venezuela.

There was also a plan for a pipeline between Venezuela's Orinoco belt, which has the world's biggest crude reserves, and Colombia's Pacific coast. "Wherever we've mentioned this, people's eyes open wide," Santos said.

Furthermore, a letter of intent was signed to extend a gas pipeline between the two nations to Ecuador and Panama.

Colombia is hoping for Venezuelan help in tracking down the new leader of the FARC rebels, Timoleon "Timochenko" Jimenez, who is believed to move across the border. Chavez vowed help.

"We will do everything in our power to stop any aggression against Colombia," he said during a joint press conference at the Miraflores presidential palace in Caracas.

According to U.S. authorities, drug suspect Valenciano's gang used a network of warehouses and front companies producing legitimate goods to mask the transport of illegal substances.

"It's a very significant arrest in terms of the Colombian drug trafficking world," said Jeremy McDermott of security consultancy InSight. "Valenciano is a very big player. He was fighting for control of the city of Medellin. He's believed to be a supplier to the Mexican cartel, the Zetas."

The Colombian-based crime analyst added, however, that finding Timochenko was a much bigger challenge.

"There's going to be a difference between the capture of drug traffickers like Valenciano and the request that Santos is certain to present to Hugo Chavez which is the capture of Timochenko, the new commander in chief of the FARC."

(Additional reporting by Girish Gupta, editing by Chris Wilson)