France signs major energy, economic deals with Russia, with possible military sales in the works

Russian Prime Minister Vladimir Putin (left) and French Prime Minister Francois Fillion exchange documents on Friday Nov. 28. Photo by Alexei Druzhinin, pulled from NYtimes.com

This is a little late, I’ve been busy with stealing the limelight on the stage of the Nodar Dumbaze Theatre as Gertrude, Cinderella’s ugly sister (pictured here), and haven’t had time to post some of the interesting news of the weekend.

But anywho, there have been several interesting developments between the governments of Russia and France that deserve real notice and a closer look.

First and foremost, controversy has swarmed over reports that Russia intends to buy a $750 million French Mistral-class warship. The 24,000 ton warship docked in St. Petersburg, Russia last week as part of a sales pitch to the Russian government.

The Russian navy is now currently lacking in navy vessels that can effectively deploy ground troops. In Russia’s five-day war with Georgia in August 2008, it deployed commandos in the Georgian break-away republic of Abkahzia after Georgia attacked it’s other rebel region, South Ossetia.

Vladimir S. Vysotsky [not the genius Soviet Russian folk singer], commander of the Russian Navy, noted this fall that if he had access to such a ship during the 2008 war with Georgia, it “would have allowed the Black Sea Fleet to complete its mission within 40 minutes, not 26 hours.”

Although that potential naval deal garnered the most attention, it was the other deals that he French government actually inked with Russia that could hold the most significance.

French energy company Gaz de France (GDF) agreed on Friday to buy a 10 percent stake in the Russian-proposed South Stream pipeline, which would transport natural gas from Russia under the Black Sea to the Balkans and Southern Europe.

On a parallel level, another French gas utility announced that it was in talks to participate in Russia’s Nord Stream pipeline project, which would run under the Baltic Sea to Northern and Central Europe.

Both pipelines would compete with Nabucco, a proposed pipeline backed by the United States and the European Union.

“It looks like pretty good time to be positioning yourself to enter Russia,” said François Heisbourg, special adviser of the Foundation for Strategic Research in Paris. “Gas prices are down, the Russians are desperate for customers and their infrastructure needs are great.”

He said the French involvement in the pipelines would give Paris strategic options in the country’s natural gas supply, potentially a wise move in light of Russia’s decision to curb exports via Ukraine.

This is a big deal considering Russia hopped over its last political obstacle by signing a deal with Slovenia last week allowing the pipeline to be built over its territory. Now all Gazprom needs is investors in order to begin construction of the South Stream pipeline, which would essentially render Nabucco — and with it: European hopes of no longer being dependent on Russia for energy — useless.

In addition to these major natural gas deals, French auto-maker, Renault, announced that it would participate in a buyout of a Russian autoplant that produces Lada cars.

Good luck making those clunkers into competitive consumer products.