Algeria strikes 6 accords with Russia during visit by President Medvedev

By Aomar Ouali, AP
Wednesday, October 6, 2010

Algeria signs 6 Russia deals during Medvedev visit

ALGIERS, Algeria — Algeria and Russia signed six deals Wednesday in sectors including energy and transportation during a visit by Russian President Dmitry Medvedev.

The Russian leader, accompanied by a delegation that included Russian business leaders, said after a meeting Wednesday with Algerian President Abdelaziz Bouteflika that he hoped bilateral ties would continue to grow.

The visit and the agreements tighten relations between Russia, which is rich in oil and natural gas, and OPEC member Algeria, a gas-rich north African nation where U.S., Chinese and French companies are among the key international players.

“We just signed six cooperation accords in different domains,” Medvedev said at a news conference. “But our cooperation won’t stop in those areas, and we’re going to extend it to sectors like industry and investment.”

Details of the accords were not provided. Officials said they involved the energy and transportation sectors as well as official bilateral relations.

Business executives were working on their own deals.

Russia’s VimpelCom Ltd. and Egypt’s Orascom Telecom announced Monday a $6.6 billion merger that would create the world’s fifth largest mobile telecommunication service provider.

A major sticking point has been Orascom’s lucrative Algeria subsidiary, Djezzy, which has been locked in a bitter feud with the Algerian government over taxes. Algeria’s government has said it want to buy Djezzy.

“If the Algerian side wants to buy it for a fair price, we’re ready to sell,” Vimpelcom’s Alexander Izosimov told Russia’s Itar-Tass news agency in Algeria on Wednesday, adding that the fair price is $7.8 billion.

Meanwhile, Russian Energy Minister Sergei Shmatko said oil giant TNK-BP is considering a deal with Algeria’s state-owned hydrocarbons company as a way to tap into natural gas development in Algeria.

Shmatko was quoted by Itar-Tass as saying that the Russian-British venture and Algeria’s Sonatrach could hold consultations and that “TNK-BP may come up with a certain offer to swap assets.” He was not specific.

Britain’s BP — which is behind the TNK-BP joint venture — owns 33.15 percent of two gas fields in In Salah, one of Algeria’s largest natural gas fields, as well as 25 percent of the In Amenas field. Sonatrach co-owns the fields.

Also Wednesday, Russia’s Interfax news agency quoted TNK-BP Chairman Mikhail Fridman as saying he was interested in buying BP’s Algerian assets. TNK BP deputy chief executive Maxim Barsky said the deal could cost up to $3 billion, according to Itar-Tass.

Russia’s state-controlled gas monopoly, Gazprom, is also interested in BP’s Algerian assets. “If the Algerian side offer the assets, we will consider the offer,” said CEO Alexei Miller, according to RIA Novosti.

Quoted by Itar-Tass, Miller said Gazprom has already started exploration of the El Assel gas field that will be completed by 2012. The field is located some 500 kilometers south of the Algerian capital — and Gazprom owns 49 per cent of the project, while Sonatrach owns 51 per cent.

Eds: Associated Press Writer Mansur Mirovalev contributed to this report from Moscow.

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