Algeria, Russia set to strengthen energy cooperation

Algeria, Russia set to strengthen energy cooperation

	Published : Fri, 19 Jan 2007 14:50 By : Agencies Print this Story

ALGIERS (AFX) - Algeria and Russia are set to strengthen their cooperation in the energy sector as Russian Industry and Energy Minister Viktor Kristenko travels to Algiers today to sign an agreement on energy with his Algerian counterpart Chakib Khelil.

Algerian daily Liberte said Russia wished to take advantage of hesitancy on the part of the US, following the Algerian government's acquisition of majority stakes in the country's oilfields through state-controlled oil and gas company Sonatrach. There has been speculation that Anadarko and Conoco-Philips could withdraw from the country, although this has been denied.

Kristenko will be joined on the trip by Alexander Medvedev, deputy CEO of Russian gas giant Gazprom, and other top-level managers from Rosneft and Lukoil.

The deepening cooperation between Algeria and Russia has prompted fears within the European Union of an OPEC-style 'gas cartel' that could affect prices and supplies, particularly in light of the recent disputes over gas between Russia and its former satellite states -- Ukraine, Georgia and Belarus.

However, Sonatrach president Mohammed Mezian said at end-December that there had been 'neither an agreement on prices, nor the creation of an OPEC of gas' with Gazprom.

'The debate over the 'gas cartel' demonstrates the European fear of a return to power of Putin's Russia, which has made the retaking of control of its oil resources a key strategy', the Quotidien d'Oran daily said.

Together with Norway -- Algeria and Russia are the main suppliers of gas to the EU, respectively delivering 160 bln cubic metres and 60 bln cubic metres a year to the bloc.

Sonatrach in August signed a memorandum of understanding with Gazprom for joint gas exploration, production and distribution in Russia, Algeria and third countries. The agreement, in which oil company Lukoil is also involved, also included options for a share swap between the two groups, and for Sonatrach's participation in a Baltic gas project worth 1 bln usd with PetroCanada and BP.

Lukoil said it has made Algeria 'one of its priority countries' in its international oil and gas expansion.

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