Russia's Medvedev heads to Nigeria

Wednesday, June 24, 2009

ABUJA, Nigeria – Russia's president said Wednesday his nation's investment in Nigeria could stretch into the billions of dollars, as the two nations signed deals on nuclear energy, gas and oil exploration in Africa largest oil producer.
Russian leader Dmitry Medvedev was on his first trip to the West African nation. The deals pave the way for Russia to build power plants, pipelines to export gas, and explore energy deposits, officials said. "If we carry out all our plans, Russian investment in Nigeria can reach billions of dollars," Medvedev said.

Medvedev began his tour in Egypt Tuesday and left Nigeria's capital, Abuja for the southern African nations of Namibia and Angola, both rich in uranium and diamonds.
Under one of the deals, Russia's state natural gas supplier Gazprom and Nigeria's main oil company agreed to create a joint venture to explore and produce oil and gas in Africa's most populous country. Gazprom's chief in Nigeria has said the Russian firm would invest $2.5 billion in the new venture.

Sergei Novikov, a spokesman for Russia's state-run civil nuclear energy agency, Rosatom, said earlier that agreements signed Wednesday will also pave the way for the construction of nuclear power reactors in Nigeria.
Nigeria presidential spokesman Olusegun Adeniyi said the nuclear deal was aimed at the "the peaceful use of nuclear energy, especially for the purpose of electricity."

Nigeria has frequently said it would like to build a nuclear power plant to address its chronic power shortages, partially caused by poor management and maintenance of its electricity infrastructure.

Nigeria has nuclear materials for research and medical purposes, including in a reactor, that are regularly inspected by the International Atomic Energy Agency, the Vienna-based nuclear watchdog for the United Nations. The United States signed an accord with Nigeria's nuclear agency in 2005 agreeing to pay for tighter security at sites where radioactive materials are kept.
Russia is a major builder of nuclear power plants and producer of nuclear fuel.
"Nigeria believes there is much to gain from close ties with Russia given its oil and gas industry," Adeniyi said.

Russia is also expected to push forward the construction of a trans-African pipeline that would send Nigerian gas to Europe. Should the deal go through, Gazprom could gain control over Nigeria's gas resources, which would strip European consumers of a possible alternative to Russian gas supplies.

The deal comes at a difficult time for Gazprom as production is declining and the severe financial crisis is forcing it to delay the launch of major new gas fields that would supply Europe with energy. The Nigeria agreement, however, would be likely to give Gazprom plenty of time to line up the funds.

Russian mining and oil companies have been active in Africa in recent years. But the Russian business presence has not been matched by the Kremlin's recognition of Africa as a key business partner.

"Russia has a number of goals (to pursue in Africa), one of which would be to take part in a growing competition for resources and markets on the continent — mainly with China," said Yaroslav Lissovolik, chief economist with Deutsche Bank in Moscow.

Medvedev's visit will be the second Russian presidential visit to sub-Saharan Africa and the first one in more than three years.

A major battlefield in the Cold War, Africa lost importance for Russia after the Soviet Union collapsed and the current volume of trade is paltry. But a newly assertive Russian leadership has been trying to reclaim a global role.

In Namibia, Russia is expected to seek supply deals for uranium.
The head of Russian diamond monopoly Alrosa, which has operated in Angola since 1990, also is joining Medvedev on his trip.

Others, such as the struggling Russian carmaker GAZ, will be looking for new markets for their products.

"Ties with Africa were utterly destroyed after the fall of the Soviet Union," said Sergei Mikheyev, an analyst at the Moscow-based Center for Political Technologies. "It is laughable to say that Russia will conquer Africa and its markets in one visit, squeezing out the Chinese or Americans from there. But this is a start."

Russia's Medvedev heads to Nigeria

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