Putin Stresses Energy in Algeria Talks

APNeither Putin nor Boutelfika commented Tuesday on the sale of MiG fighters.
President Vladimir Putin and his Algerian counterpart, Abdelaziz Boutelfika, pledged greater cooperation on energy and railroads at a Kremlin meeting Tuesday, but kept mum about the fate of a controversial arms deal to supply Algeria with MiG fighter jets.

Against a background of continued speculation about the creation of an OPEC-style gas cartel, the leaders of the two major gas-producing countries pledged to work closely on energy issues.

"It is vital for us to remain in contact over questions and problems of energy, especially because Algeria is currently heading OPEC," Putin said at the meeting.

In an interview with Itar-Tass published ahead of Tuesday's meeting, Boutelfika called for the two countries to "coordinate" their energy policies.

Boutelfika was accompanied on his two-day Moscow visit by Algerian Energy Minister Chakib Khelil. Khelil is currently serving as president of the Organization of Petroleum Exporting Countries.

European authorities have recently become concerned over improved energy links between Russia and Algeria, which together account for over 65 percent of the Europe Union's gas imports.

As concrete proof of the good energy relations, Industry and Energy Minister Viktor Khristenko said that state companies Gazprom and Sonatrach could rekindle a cooperation agreement that fell apart late last year.

"Gazprom and Sonatrach are now working on options to swap assets and take part in extracting and transporting gas," Khristenko said.

Khristenko also said Rosneft could start pumping oil in Algeria by 2011.

"Literally one week ago, Rosneft in cooperation with Stroitransgaz confirmed a commercial find at two oil fields in Algeria and two gas fields," Khristenko said, Interfax reported.

Rosneft and engineering firm Stroitransgaz could eventually produce 3.5 million tons of oil per year in Algeria, Khristenko said.

He also said that Russian firm Itera, in cooperation with Finnish and Canadian companies, stood a good chance of winning a tender to develop a new petrochemicals plant in Algeria, Interfax reported.

Boutelfika, who was on his first official visit to Moscow, told reporters that Russian companies had won a tender to build railroads in Algeria. He added that the details of the deal were still to be worked out.

In reply, Putin said he had spoken directly with the head of state-owned Russian Railways, Vladimir Yakunin.

"He is determined to continue current cooperation and certain that the Russian proposals for the projects are the most competitive," Putin said, referring to Yakunin.

Tuesday's meeting came amid controversy over the sale of MiG jets to Algeria, part of $8 billion in arms deals signed when Putin visited the country in March 2006. The deal saw about $4.7 billion of Algeria's Soviet-era debt wiped out.

"We have many questions for discussion and debate, including military-technical cooperation," Putin said. He did not elaborate.

The Algerian Air Force signed an agreement last week to return 15 MiG-29 jets, delivered to the country in 2006 and 2007, because of technical concerns over the aircraft, Kommersant reported Monday. The planes were part of a larger $1.5 billion consignment of 36 MiGs to be delivered.

A spokeswoman for MiG, however, denied on Monday that the original deal had been torn up.

State arms trader Rosoboronexport and the Federal Service for Military and Technical Cooperation refused to comment on the results of the Kremlin meeting Tuesday.

Analysts have tended to link Algerian attempts to return the jets to internal struggles within the North African state's governing elite or to aggressive moves from other arms suppliers, rather than problems with the quality of the Russian jets.