UPDATE 2-Putin signs energy, car deals on visit to France

Reuters

Published Nov 27, 2009 11:57AM ET

* Putin brings major business delegation to France

* Deals involve Renault, AvtoVAZ, EDF, Gazprom

* France open to Mistral warship sale

(Recasts after news conference, adds detail of agreements)

By Darya Korsunskaya and Helen Massy-Beresford

RAMBOUILLET, France, Nov 27 (Reuters) - Russian Prime Minister Vladimir Putin hailed a breakthrough in economic ties with France on Friday as he offered EDF a role in a major energy project and won help for indebted Soviet-era car giant AvtoVAZ.

Accompanied by a large delegation of company executives and government ministers, Putin met his French counterpart Francois Fillon in the picturesque setting of the Rambouillet chateau outside Paris to sign a series of business deals.

"We are on the way to achieving this goal to transform our good, high-level political relations in the sphere of the real economy," the Russian premier told a news conference.

"I think it is a real breakthrough in the economic cooperation sphere."

France already ranks with Germany and Italy as one of Russia's top energy investors because of Gazprom's partnership with French company Total in the $15 billion Shtokman gas field, one of the world's largest.

Since that deal, Russia has regularly offered French firms a bigger role in new energy projects and praised the growing volume of trade with France under President Nicolas Sarkozy.

Sarkozy was absent from Friday's meeting as he is on a trip to Brazil and Trinidad and Tobago as part of preparations for the Copenhagen climate summit.

ENERGY, CAR DEALS

Among the flurry of deals and memorandums of understanding signed on Friday, there was an agreement for French power firm EDF to take a stake in the South Stream pipeline that will pump gas from Russian fields to Europe.

Putin also won French support for AvtoVAZ, the heavily indebted maker of Lada cars in which Renault has a 25 percent stake, under which the French carmaker will provide technology and production help as part of a deal in which Russia will put in 50 billion roubles ($1.73 billion).

French direct investment in Russia amounts to $10 billion, including $1 billion made by Renault, which committed to buy a stake in AvtoVAZ in 2008.

The two government leaders also discussed Russia's request to buy a Mistral-type warship, which can be used in amphibious assaults and to carry tanks.

Fillon said France was considering the Russian request and was in principle favourable, despite the concern of some of Russia's neighbours, including Georgia, which fought a brief war with Moscow last year.

"We cannot at the same time say that we want an economic and human space between Russia and the European Union ... and at the same time have reflexes that no longer have anything to do with reality of the situation," he said.

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The meeting took place against a backdrop of financial turmoil in Dubai, which has created global worries of a renewed slide into crisis, but both Putin and Fillon expressed cautious optimism that the impact could be limited.

"(The Dubai problems) had an impact on the Russian economy -- the stock market has gone down slightly and the dollar has strengthened versus the rouble," said Putin.

"But all in all, I think the tendency toward an exit from the crisis will prevail," he said. (Additional reporting by Muriel Boselli, Anna Willard) ($1=28.87 Rouble) (Writing by James Mackenzie, editing by Tim Pearce) ((Reuters Messaging james.mackenzie.reuters.com@reuters.net, Paris Newsroom +33 1 4949 5339; james.mackenzie@reuters.com))

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