UPDATE 2-Venezuela's Chavez makes up with king of Spain

"We caused a furore with that event. It (the T-shirt) is a good souvenir, to laugh at for the rest of our lives every time we see it," he said.

Chavez flew to Madrid from Majorca later on Friday for a brief meeting with Zapatero and a working lunch to discuss business ties between the two countries, possible collaboration on energy and immigration.

During the lunch Chavez and Zapatero discussed a deal for Venezuela to supply 10,000 barrels of crude oil per day to Spain at $100 per barrel in exchange for technology and infrastructure investment, a spokesman for the prime minister's office said.

Spanish businesses, including banks BBVA (BBVA.MC: Quote, Profile, Research) and Santander (SAN.MC: Quote, Profile, Research) and oil company Repsol (REP.MC: Quote, Profile, Research) have an estimated $2.4 billion invested in the oil-rich country.

"Thank you for the warmth with which you have received us," Chavez said at a news conference on the steps of the prime minister's residence in Madrid.

The king's November outburst came after Chavez called former Spanish prime minister Jose Maria Aznar of the conservative PP party a "fascist", prompting Socialist Zapatero to ask for respect for an elected representative.

Minutes later a grim-faced king rose from his seat and stormed out of the forum.

Chavez later threatened to review diplomatic and business ties with former colonial power Spain, a major investor in the OPEC nation, and demanded a public apology from the king.

But relations have since thawed, with Chavez sending his regards to the king during a meeting with Zapatero at a summit in Peru in May. (Editing by Giles Elgood)