Non-Subscriber Extract
Russian companies gain access to Algerian oil and gas under equipment contracts
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| 17 March 2006 |
By Guy Anderson Editor, Jane’s Defence Industry
Moscow’s agreement to supply military equipment valued at USD7.5 billion to Algeria includes arrangements under which Russian oil producer LUKoil and gas group Gazprom will gain access to the North African states' oil and gas reserves.
It is likely that the proceeds from exploiting the energy fields will be split between the Russian producers and Algeria, giving Algiers a revenue stream with which to pay the remaining cash element of the deal.
In addition, it was revealed that Russia will write-off Algeria's USD4 billion Soviet-era debt (as widely anticipated). This will account for a quarter of Algeria's total foreign debt.
Under the deal, which was concluded following three months of negotiations, Russia will deliver 36 MiG 29SMT fighters, 28 Su-30MK interdiction aircraft and 16 Yak-130 Mitten combat trainers, plus the upgrade of 36 older MiG-29s, supplies of ground-based radars, and pilot and technical training.
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