LUKoil Release Eases Libyan Talks

ria-novostiPutin and his Libyan counterpart, al-Baghdadi Ali al-Mahmoudi, on Thursday
Libya released a LUKoil executive from prison on Thursday, paving the way for smooth talks between Prime Minister Vladimir Putin and his visiting counterpart on booming trade ties.

Before and after the meeting, both Putin and Libyan Prime Minister al-Baghdadi Ali al-Mahmoudi talked up the flourishing economic ties between their countries and said further deals involving arms, gas, and atomic energy were on the horizon.

"We would like to achieve bigger volumes in investment cooperation between Russia and Libya in the oil and gas sector," al-Mahmoudi said in televised comments. He later said the two sides had also discussed the possibility of Russia helping to build an atomic power station in Libya.

In response, Putin said Russia would facilitate Libyan investment in the country and cooperate to develop oil and gas projects both in Libya and "third countries."

Putin also indicated that more arms deals could be on the way, as Libya becomes an increasingly important partner for Russian weapons makers.

"We intend to continue cooperation in the military-technical sphere," Putin said. "The Libyan leadership has confirmed its interest in buying high-quality products from Russia."

Since Libya stepped back into the international fold in 2003, after years of United Nations sanctions, it has been courted assiduously by Russia.

During a visit to Tripoli in April, then-President Putin told Libyan leader Muammar Gadhafi that Russia would forgive $4.5 billion of Libya's Soviet-era debt in return for a raft of multibillion-dollar contracts for Russian state-run companies.

The deals included a Gazprom joint venture with Libya's state oil company and a 2.2 billion euro ($3.4 billion) contract for Russian Railways to build a rail link there.

Reports at the time also said Russia sealed an agreement worth hundreds of millions of dollars to modernize Libya's weaponry and was looking to sell $2.5 billion of defense systems, jets and warships.

At Thursday's meeting, Al-Mahmoudi invited Putin to visit Libya in late August to celebrate the start of construction of the Russian Railways link.

In another gesture of goodwill, a LUKoil executive arrested in Libya in November was released at the personal request of Gadhafi and flown back to Moscow on the same plane as the Libyan delegation.

Alexander Tsygankov, the head of development at LUKoil's Libyan office, was held without any official reason, LUKoil said in a statement Thursday.

"Alexander [Tsygankov] is already back home and feels fine," the statement said.

Accompanying Putin on his trip to Libya, Gazprom CEO Alexei Miller in April offered to buy all of the country's uncontracted oil and gas and said the company could start selling Libyan energy by the end of this year.

Gazprom also expressed interest in working on the construction of a pipeline between Libya and Europe — a move raising concern in the European Union, which has been seeking to diversify away from Russian energy supplies.

Russia's gas export monopoly already has an asset-swap agreement with Italian oil giant Eni, including part-ownership of an existing pipeline in Libya.

The BP Statistical Review for 2008 estimates Libyan gas reserves at 1.5 trillion cubic meters, although Libyan officials put the volume much higher. The country produced 13.7 million tons of gas last year, the review said.