Morning Star

2nd March, 2009

Russia and Spain will sign a broad energy cooperation agreement Tuesday, Spanish Prime Minister Jose Luis Rodriguez Zapatero said Monday on the first day of a visit by Russia’s president.

“We will tomorrow sign a broad energy cooperation agreement in the areas of prospecting, exploration, transportation and the sale of hydrocarbons,” Zapatero said.

The agreement will cover electricity production from renewable sources as well as liquid fossil fuels, the improvement of energy efficiency and the use of clean technology in the transportation of energy, the prime minister said.

Zapatero, who spoke at a civil society forum in Madrid with President Dmitry Medvedev at his side, did not provide further details.

Russia is the world’s biggest gas exporter and second-largest oil supplier, while Spain is home to several global leaders in renewable energy. It is also one of Europe’s biggest producers of wind power.

Medvedev arrived in Madrid Sunday with a business delegation in tow for two days of talks expected to culminate in the signing of a transit deal giving Spain the right to ship goods to Afghanistan through Russia.

Igor Sechin, Russia’s deputy prime minister in charge of oil and gas, is in Madrid as part of the Russian delegation, a Kremlin spokesman told AFP.

Zapatero said he would work to improve relations between Russia and the European Union when Spain holds the rotating six-month E.U. presidency during the first half of 2010.

“Russia is a priority nation for Spain,” he said.

Spain is not a Russian gas customer and was not affected by Russia’s dispute with Ukraine in January which left over a dozen European countries cut off from Russian gas supplies in the midst of winter.

Late last year, Lukoil Holdings (LUKOY) said it was interested in buying a 20% stake in Repsol YPF (REP) but the Russian energy giant dropped the bid after the deal met resistance from Spain’s opposition conservative party.

In an interview published Sunday in El Pais, Medvedev called opposition to Lukoil’s bid to buy the stake “idiotic,” and said he would like to see greater investments between Russia and Europe.

“The greater the amount of investment, the greater the level of security in Europe, because if countries are linked by common businesses, there is no reason for conflicts,” he said.