France and Russia conclude "modernization partnership" (1st Lead)

Nov 27, 2009, 11:36 GMT

Paris - France and Russia agreed Friday on a broad 'modernization partnership' for the energy and automobile industries, Russian Prime Minister Vladimir Putin said in Rambouillet, some 50 kilometres south-west of Paris.

'We have achieved a breakthrough,' Putin told journalists at the site of the 14th session of the French-Russian commission for bilateral cooperation.

'We have achieved palpable results in all business areas,' including energy, pharmceuticals and car production, he added.

However, discussions over nuclear energy were 'difficult,' Putin said.

At the conference, which included numerous ministers from both sides, French car maker Renault and Russian auto producer Avtovaz signed an agreement calling for the modernization of the Lada auto works in the Russian city Togliatti with French technology.

In addition, French utility EDF signed an agreement with Gazprom to join the South Stream gas pipeline project currently underway and which is expected to increase and secure gas deliveries to Europe.

The South Stream gas pipeline is intended to transport Russian natural gas via the Black Sea to Greece, Italy and Austria and is scheduled to be completed by the year 2015.

Putin and his French counterpart, Francois Fillon, also vowed to work closely together on the fight against global warming.

To that end, the French bank BNP Paribas signed an agreement with the Russian-British oil producer TKN-BP that permits the use of the Kyoto Protocol on global warming in Russia for the first time.

In the agreement, BNP Paribas would finance the construction of equipment for the Samotlor oilfield that would recycle waste gases that are currently simply being burned off.

One issue that was apparently not discussed at the bilateral meeting was the possible purchase by Russia of French Mistral helicopter carriers.

The announced sale has rung alarm bells in former Soviet-member nations such as Georgia, because of fears that the warship could be used to further Russian interests in the region.

However, the two men may have discussed the controversial deal during a meeting late Thursday, after Putin arrived in Paris. No details on these informal talks were provided.