BUENOS AIRES – Venezuela agreed to pay $1.97 billion for Italo-Argentine conglomerate Techint’s 60 percent stake in steelmaker Sidor, which Caracas nationalized last year.

Techint subsidiary Siderar disclosed the deal Thursday in a filing with Argentine securities regulators.

The Venezuelan government has already paid $400 million in cash and will give Techint a total of $945 million in six quarterly tranches between now and October 2010.

At that time, the remaining balance is to be paid in amounts that will determined based on the increase in the price of U.S. benchmark crude above the level of May 6, 2009, Siderar said.

News of the agreement with Venezuela caused Siderar’s shares to soar 16.3 percent on the Buenos Aires stock exchange, prompting officials to suspend trading in the stock.

President Hugo Chavez, a socialist who took office in 1999, has used Venezuela’s oil wealth to nationalize telecommunications and utilities firms and take control of projects once run by ExxonMobil, Total and other global energy giants.

He said last year that he was nationalizing Sidor, originally a state enterprise, in order to ensure an adequate supply of steel for the domestic market.

Techint, through Luxembourg-based subsidiary Ternium, bought 80 percent of Sidor from the Venezuelan government in 1998 for $1.2 billion.

The conglomerate’s stake was subsequently reduced to 60 percent, while the remainder was evenly split between the Venezuelan government and Sidor employees.

With $500 million in earnings in 2007, Sidor was an important component of Techint, a leading global iron-and-steel conglomerate with annual revenues of $20 billion and a workforce of 51,600 employees. EFE