Putin, Angolan Pres Sign Energy, Minerals Pacts

MOSCOW, Oct 31, 2006 (AP)

Russian President Vladimir Putin hosted his Angolan counterpart in the Kremlin Tuesday, and officials signed agreements on energy and minerals exploration, military-technical cooperation, legal assistance and joint efforts in combating drugs.

"We have talked about widening our commercial and economic relations - in the diamond extraction sector, energy, mining, oil and gas, transport and communications," Putin said.

After the Kremlin talks, Russia's OAO Lukoil (LKOH.RS) and Angola's state oil company Sonangol signed a memorandum of understanding on joint exploration of Angola's offshore oil fields.

Russia's state diamond monopoly Alrosa also signed agreements on cooperation in diamond and energy industries with Angolan partners. Alrosa earlier had announced plans to explore oil fields in Angola in partnership with Russian state oil company Zarubezhneft.

OAO Gazprom (GSPBEX.RS), Russia's state-controlled natural gas giant, also signed a memorandum of cooperation with Sonangol.

Alrosa already owns stock in two major diamond fields in Angola, which is the world's sixth-largest diamond producer. Alrosa also has announced plans to tap Angola's oil fields.

Alrosa has grown into Angola's biggest foreign investor in the diamond sector, stepping in after relations between De Beers and Angola's state diamond company Endiama cooled over losses stemming from the country's renewed civil war.

Alrosa now accounts for some 60% of Angola's diamond production, compared with around 30% for De Beers. Angola currently produces almost $1 billion worth of diamonds annually and aims to double production over the next year.

"We didn't come here to seek help," dos Santos told Putin Tuesday. "Angola has great economic potential and can offer something in exchange for cooperation. We want to cooperate on the basis of equality and want a partnership beneficial for both sides."

The Soviet Union backed dos Santos' party, the Marxist Popular Movement for the Liberation of Angola, or MPLA, providing it with aircraft, tanks and other weapons in its prolonged civil war against the UNITA rebels.

"We know and remember the close ties which we had in the past," Putin told dos Santos, who has ruled his nation since 1979. After the talks, Putin presented dos Santos with the Russian Order for Friendship.

When the Soviet Union collapsed, the MPLA dropped its Marxist policies and looked for support elsewhere. The southwest African nation's two-decade civil war ended in 2002 when the army killed UNITA rebel leader Jonas Savimbi.

Angola is sub-Saharan Africa's second-largest oil producer after Nigeria, most of it pumped from offshore rigs operated by foreign companies. Its output is projected to surpass 2 million barrels a day next year.

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