Friday November 27, 2009

Putin signs energy, car deals on visit to France

By Darya Korsunskaya and Helen Massy-Beresford

RAMBOUILLET, France (Reuters) - Russian Prime Minister Vladimir Putin offered France's EDF a role in a major energy project at talks on Friday, while clinching Renault's support to save indebted Soviet-era car giant AvtoVAZ.

Russian Prime Minister Vladimir Putin looks on during a meeting with his Kazakh counterpart Karim Masimov in Yalta, November 20, 2009. (REUTERS/RIA Novosti/Alexei)

A flurry of business deals were expected to be sealed after talks at the Rambouillet chateau outside Paris between Putin and his French counterpart Francois Fillon, against a backdrop of strong European appetite for Russian energy resources.

"We have two main pillars in our bilateral cooperation -- energy and high-tech," Putin's deputy chief of staff Yuri Ushakov told reporters before the visit.

The two leaders, who were accompanied by a party of senior company executives from both countries, were due to give a news conference at 1130 GMT at the end of their meeting, which was expected to focus heavily on business deals.

However, officials said before the visit that Iran's nuclear programme and Moscow's plans to buy a French warship may also be discussed.

French direct investment in Russia amounts to $10 billion, including $1 billion made by Renault, which committed to buy a stake in AvtoVAZ, the ailing maker of Lada cars, in 2008.

A document distributed by Fillon's aides as Friday's talks got under way announced that a cooperation accord between Renault and AvtoVAZ would be signed. This could help the Kremlin avoid mass lay-offs.

A deal was also quick to emerge on French power giant EDF joining the South Stream project to help Russian gas monopoly Gazprom and Italy's ENI build a pipeline under the Black Sea to supply gas to southern Europe.

"A full stop has been placed on the agreement between EDF and Gazprom about the French company taking part in ...what we call South Stream," Putin said.

"Agreement has been reached on working together on the territory of France and other countries. In essence, it is an exchange of assets," he added, without giving further details.

CONTRACTS

More than a dozen contracts were due to be signed on Friday, including an accord on financing the construction of a motorway between Moscow and Saint Petersburg involving French construction group Vinci and a deal between Total and Russian state oil company Zarubezhneft.

France already ranks with Germany and Italy as one of Russia's top energy investors, due to Gazprom's partnership with French company Total in the $15-billion Shtokman gas field, one of the world's largest.

Since that deal, Russia has regularly offered French firms a bigger role in new energy projects and praised growing trade volumes with France under President Nicolas Sarkozy.

Bilateral trade jumped by 35 percent to $22 billion in 2008 due to high energy prices, making France Russia's fifth biggest European trading partner behind Germany, Italy, the Netherlands and Poland and on a par with Britain.

Russia's plans to buy a Mistral-class warship, which can be used in amphibious assaults and to carry tanks, are also likely to be discussed.

"As far the purchase of (the) Mistral warship is concerned, this topic is not on the agenda but everyone talks about it so it will be touched upon one way or another," said Ushakov.

(Additional reporting by Muriel Boselli)

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