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Putin in Libya to Talk Gas Cooperation
04-17-2008
President
Vladmir Putin of Russia arrived in Libya on Wednesday at the invitation of
President Moammar Gadhafi to talk gas strategy and cooperation.
The two
leaders are also expected to discuss debt negotiations and potential arms deal.
The Kremlin did not give details of Putin's agenda, but last month he told State
Duma deputies that a possible visit to Libya was in the pipeline to iron out a
"financial problem" with the country.
Last week Gazprom said it was in talks with its Italian partner, Eni, about a
potential asset swap involving projects in Libya. The announcement followed a
meeting between Eni chief executive Paolo Scaroni and Gazprom head Alexei Miller
with Putin in Moscow and heightened EU fears over its increasing dependency on
Russian gas supplies.
A spokesman for Gazprom could not say whether Putin would be discussing further
involvement for the state-run company in Libya. Gazprom officials are already in
Libya.
Until 2003 Libya was an international pariah, following 11 years of United
Nations sanctions, imposed partly in connection with the 1988 bombing of a Pan
American airliner over Lockerbie in Scotland. Ties with the international
community have been gradually renewed since then, following Gadhafi's agreement
to end the country's nuclear arms program.
Recent moves by Libya to open up to foreign investment have made the country
very attractive for Russian energy firms and heightened international
competition for the country's natural resources, said Valery Nesterov, an oil
and gas analyst at Troika Dialog.
Following an auction late last year, Libya handed Gazprom the much-coveted
rights to explore in a prospective gas block in the southwest of the country.
The diplomatic overtures toward Libya also fit in with broader Russian attempts
to forge closer ties with North African states, including Egypt and Algeria,
Nesterov said.
Putin's visit comes just after Ukraine announced on Sunday that state energy
firm Naftogaz Ukrainy had won an agreement to start pumping oil in Libya,
following a visit by Ukrainian President Viktor Yushchenko to the country last
week.
Naftogaz has won back the rights to a Libyan field that it previously held in
2003, Yushchenko said in an interview with Ukrainian television Sunday.
Yushchenko said he would discuss the potential construction of an oil refinery
in Libya when Gadhafi pays a return visit to Ukraine later this year.
Despite recent talk of the creation of an OPEC-style cartel for the world's gas
producers, Nesterov said Russia would first need the cooperation of the bigger
producers such as Iran and Algeria.
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