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. Last Updated: 07/27/2016

Putin Courts Mideast Rulers

Itar-TassSaudi King Abdullah presenting Vladimir Putin with a medal on Monday.
While sampling Oriental candies and walking on rose petals, President Vladimir Putin courted Saudi businessmen with talk of lucrative oil, banking and satellite deals during a visit to Riyadh that ended Monday.

After leaving the Saudi capital, Putin flew on to neighboring Qatar, which has the world's third-biggest gas reserves. Putin and his hosts there discussed recent talk of a gas cartel, with Putin refusing to rule one out while his Qatari counterpart said merely that gas-producing countries should coordinate their policies.

The visits were the first by a Russian leader to these countries, which in recent years have traditionally been U.S. allies.

Addressing Saudi businessmen, Putin said Russia and Saudi Arabia, the world's leading oil producers, had to supply an ever-growing international market. "It means that we are not competitors, but allies and partners," he said.

LUKoil is planning to invest $2 billion in its first joint venture in Saudi Arabia -- a new gas field, Putin said. LUKoil, whose president Vagit Alekperov was a member of the Russian delegation, found the deposit jointly with Saudi Aramco at Block A last year. Their joint venture, LUKoil Saudi Arabia Energy, should begin supplying the field's gas and gas condensate commercially in 2014, Grigory Volchek, a spokesman for LUKoil Overseas, said from Moscow, Interfax reported.

"I'm sure politics played some role in giving LUKoil the concession," said Alexander Kliment, a Middle East expert at Eurasia Group in Washington. "LUKoil holds 80 percent in the joint venture, which is unusual, but the field is relatively small."

Putin said it was also worth considering importing Saudi oil and gas equipment, Interfax reported.

At the same meeting, Putin welcomed a Saudi proposal to create a Saudi-Russian bank that would foster mutual investments and regulate financial flows, but urged the Saudis to go farther. "It is possible to open subsidiary banks [in Russia] with 100 percent Saudi capital," Putin said. "I think the interest will be high because our financial-services market is developing."

Russia, which has already launched seven Saudi satellites into space, is planning to launch six more, Putin said. Another possible area for cooperation, Putin said, would be for Saudi Arabia to connect to the Russian global navigation system, Glonass, currently under development.

Russian Railways chief Vladimir Yakunin joined Putin on his trip to talk about the company's bid to construct a 5,000-kilometer railway in Saudi Arabia, NTV reported. It was not clear when a winner of the contract would be announced, but Yakunin said his company's main rival was a cheaper bid by the Bin Laden family. Russia would build a more reliable railway, Yakunin said, adding that he had asked the Saudis to consider the Russian saying, "We are not as rich as to buy cheap things," NTV television reported.

Dmitry Astakhov / Itar-Tass
President Vladimir Putin shaking hands with Saudi delegates ahead of talks on Monday in Riyadh, Saudi Arabia.
Putin's Saudi royal host, King Abdullah, literally rolled out the red carpet for the Russian president in Riyadh. As Putin walked with the king's brother, Prince Salman bin Abdul Aziz, into the palace of the kingdom's founder, King Ibn Saud, children tossed handfuls of rose petals in front of the two men and Bedouins danced for Putin as if for a victorious warlord. At one point Putin awkwardly joined the dance, holding a large saber that one of the Bedouins had given to him. When the dance was over, the same Bedouin presented Putin with a traditional Arabian dagger, prompting the president to promise that a Russian dagger would arrive in return.

Inside, Prince Salman treated Putin to oriental candies. Putin commented that although he had grown up in a simple family, his favorite store was one that sold such candies in the city center of Leningrad. "When I came to the guest palace yesterday and saw these oriental delights, I asked my security guards to help me so that I didn't eat them all by myself," he said.

Saudi Arabia's relations with Moscow were severely damaged by the Soviet invasion of Afghanistan in 1979, but in recent years they have warmed considerably, with then-Prince Abdullah making his first official visit to Moscow in 2003.

Tatarstan President Mintimer Shaimiyev, accompanying Putin in Riyadh, on Monday received a gold medal and $200,000 from the Saudi authorities for strengthening Islamic values in his region.

Saudi Arabia's relations with Washington have come under pressure since the Sept. 11, 2001, terrorist attacks on the United States. Fifteen of the attackers named by U.S. authorities were Saudi citizens.

The Saudis are increasingly reaching out to Russia and China as they regard U.S. policy in the Middle East as a failure, Kliment said.

"The Saudis are exploring a more assertive international and regional role and that [coincides] with a similar Russian policy," he said.

But the Saudis do not want to push aside the United States altogether, said Yevgeny Satanovsky, president of the Moscow-based Institute for Middle East Studies.

Russia could mediate between Saudi Arabia and Iran, which compete for influence in the Persian Gulf, he said. As a traditional partner of the Palestinians, Russia can also help to settle the Middle East crisis, he said.

In Qatar, LUKoil chief Alekperov signed an agreement with state-owned Qatar Petroleum to explore and develop oil and gas fields in the country.

On the subject of a gas OPEC, Putin said he was not against "the idea of a cartel. But this initiative requires more study."

The Qatari leader, Emir Sheikh Hamad bin Khalifa Al Thani, said he supported discussions about a gas OPEC but said he was not sure it would have the same influence on prices as its oil equivalent..