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16 Apr, 2008 16:30

Putin to clinch trade deals in Libya

Vladimir Putin has met Libya’s leader, Muammar Gaddafi, in the capital Tripoli. It's the first visit of a Russian head of state to the oil-rich country. The two sides have already agreed on the amount of debt Libya owes Russia dating back from the Soviet

Putin’s visit to Libya is also expected to yield a declaration of friendship and co-operation. Some other documents may also be signed, including commercial agreements.

The two countries look set to boost their ties, but there are some issues that have been delaying the process. The main obstacle is the debt dating back to the 1970-1980s when the Soviet Union was supplying Libya with military hardware. The negotiations over the amount of the debt have been going on for years. However, now it seems that the issue can be resolved.

Russia’s Finance Minister Aleksey Kudrin, who’s accompanying Putin, said that the Libyan side has confirmed the $US 4.6 billion debt.

The news has been welcomed by Russian businessmen.

“Libya indeed owes debts to Russia. I think that this issue could have been settled long ago. It was a long-standing issue that the two sides could not agree on, but now, thank God, it has finally been settled,” said Ara Abramyan, the Co-Chairman of the Russian-Libyan Business Council.

Libya was diplomatically isolated for many years, accused of involvement in terrorism and developing weapons of mass destruction.

But since UN sanctions were lifted in 2003, the north African country has once again entered the international fold.

Aleksey Podtserob, Russia’s Ambassador to Libya from 1992 to1996, says Russia and Libya consider each other business partners with good prospects for trade.

“This country is rich in oil. Another sphere of co-operation between Russia and Libya is nuclear power engineering,” he said.

Libya’s huge oil and gas reserves have already attracted companies from all around the world. There’s now fierce competition to develop the resources. And for TatNeft, one of two Russian energy producers in Libya, the rewards are worth the effort.

“Libya is a very interesting market for the international oil companies, first of all because oil production cost is very low here, in some places it is approximately $US 1.50 per barrel,” said Nail Habibulin, TatNeft Director in Libya.