Putin signs nuclear energy deal with Argentina

BUENOS AIRES Sat Jul 12, 2014 5:19pm EDT

1 of 2. Argentina's President Cristina Fernandez de Kirchner (R) shakes hands with her Russian counterpart Vladimir Putin at the Casa Rosada presidential palace in Buenos Aires July 12, 2014.

Credit: Reuters/Enrique Marcarian

BUENOS AIRES (Reuters) - Russian President Vladimir Putin signed a nuclear energy cooperation deal with Argentina on Saturday on a trip to bolster trade ties and strengthen Russia's influence in Latin America.

Putin's energy minister, Alexander Novak, told reporters in the Argentine capital that the Russian state atomic energy corporation, Rosatom, had made an offer to tender for the construction of two new nuclear power units in Argentina.

Novak said Rosatom could offer "comfortable" financial terms to Latin America's No. 3 economy, which has struggled to advance its nuclear energy program and lure foreign investors deterred by a raft of punishing capital and import controls.

"Rosatom is actively working here... and has already handed over its technical and commercial offer to our (Argentine) colleagues," Novak told reporters after talks between Putin and his Argentine counterpart, President Cristina Fernandez.

"There will be a tender this fall. Rosatom... is also ready to provide comfortable financial conditions (to Argentina)."

Fernandez said a Russian delegation would visit the so-called Vaca Muerta shale fields in the south of the country, adding that she hoped relations between the two countries would deepen further.

The Vaca Muerta field is thought to be one of the biggest shale reserves in the Western Hemisphere and could double Argentina's energy output within a decade. But it is in the early stage of development.

Putin made an unannounced stopover in Nicaragua after meeting Cuban President Raul Castro in Havana on Friday, the Kremlin said. He travels next to Brazil for bilateral talks and a summit of the emerging BRICS economies - Brazil, Russia, India, China and South Africa - on Tuesday and Wednesday.

DEBT CRISIS

Putin's visit comes as Argentina stares down the barrel of another debt crisis. The government has until July 30 to settle with "holdout" investors suing the government for full repayment of sovereign bonds on which Argentina defaulted in 2002.

Failure to do so risks prolonging Argentina's banishment from global capital markets at a time it needs financing to exploit huge shale gas and oil resources, develop its power grid and build new roads and ports to bolster grains exports.

Argentine officials and the New York hedge funds it has battled for years met separately with a court-appointed mediator on Friday, but the two sides appeared no closer to a deal.

Argentina portrays the holdouts as vultures who are willing to cripple the country's economy for the sake of profit.

Fernandez said on Saturday a lack of global regulation on capital flows had "practically turned the world into a casino".

Putin has called Argentina one of Russia's most strategically important allies in Latin America. The Russian leader, who is under pressure from the West to help restrain pro-Russian separatists in Ukraine, told reporters in Buenos Aires that the two nations "cooperated in all areas".

Argentina abstained in March in a U.N. vote calling on member states not to recognize Russia's annexation of Crimea. Russia has been supportive of Argentina's claim over the Falkland Islands, a British overseas territory lying off Argentina's coast.

"Argentina often has its own opinion ... but it is always one of its own, and is a sovereign one, which is utterly important and cannot be often seen in the modern world. And we highly appreciate that," Putin said.

(Additional reporting by Alejandro Lifschitz adnd Walter Bianchi; Writing by Richard Lough; Editing by Dan Grebler)