* French industry minister, top nuclear CEOs to Riyadh
* France eager to win part of future Saudi nuclear contracts
* Saudi Arabia has not yet launched a tender offer process
* EDF, Areva work together, ending years of acrimony
(Adds quotes, detail, background paragraphs)
By Geert De Clercq
PARIS, Jan 18 A top French minister and the
chief executives of French utility EDF and reactor
builder Areva are visiting Saudi Arabia this weekend
to build a case for selling French nuclear reactors to the
Industry Minister Arnaud Montebourg will meet with Saudi
officials and with representatives of EDF and Areva, who opened
a joint office in Riyadh six months ago to lay the groundwork
for a French nuclear offer.
Montebourg will build on a Nov. 4 visit by French President
Francois Hollande to Saudi Arabia's King Abdullah and a 2011
agreement between France and Saudi Arabia that offered the
Saudis atomic know-how and training for local staff.
The kingdom has not yet launched a formal tender offer but
is widely expected to do so, and nuclear equipment vendors
worldwide are gearing up for when it does.
"We are still in a very early stage of the game in Saudi
Arabia," an EDF spokeswoman told Reuters.
Eager to reduce domestic consumption of oil and diversify
its energy mix, Saudi Arabia is considering building 17
gigawatts of nuclear capacity by 2032, the King Abdullah City
for Atomic and Renewable Energy (KACARE) says on its website.
That is the equivalent of about 17 standard nuclear
reactors, or about 10 of the 1600 megawatt European Pressurised
Reactors (EPR) that Areva sells.
EDF CEO Henri Proglio and Areva CEO Luc Oursel will
accompany Montebourg, putting up a united front despite years of
acrimony between the two state-owned companies.
France plays a strong hand in Saudi Arabia, which has no
nuclear capabilities of its own but has deep pockets and wants
to acquire the most modern technology.
"Saudi Arabia will only deploy the most advanced and
thoroughly tested technologies, paying maximum attention to
safety, security and safeguards of the highest international
standards," KACARE said on its website.
The third-generation EPR is one of the most modern reactors
on the market. Conceived following the 1986 Chernobyl disaster,
it has a double containment wall, a "core catcher" to contain
core meltdown and multiple backup and cooling systems.
Unlike other suppliers, Areva also sells uranium, offering
utilities long-term supply contracts.
EDF positions itself as the only utility company that can
lead the complex civil engineering project involved in building
a nuclear power plant and can also offer help with operating the
This is not an advantage in emerging markets with strong
nuclear capabilities such as China and India but matters a lot
in countries without a nuclear tradition such as Saudi Arabia.
That said, the French will face formidable competition from
U.S., Japanese and South Korean consortia. Westinghouse-Toshiba
has deep ties with the Middle East, and a Korean-led
consortium dealt the French a humiliating blow with its surprise
win of a $40 billion contract in Abu Dhabi three years ago.
"In the end, the Saudis will make the call. They will define
the parameters of a possible partnership," Bernard Bigot, head
of French nuclear research organisation CEA, told daily Les
Echos on Friday.
Hollande's government, despite having decided to cut the
share of nuclear in French electricity generation to 50 percent
in 2025 from the current 75 percent, is keen to export reactors.
One problem the French will not have in the Middle East, at
least not in the next decade, is the soul-searching about how
much technology to share with a customer before that customer
becomes a competitor.
The French finance ministry is currently leading an
investigation into whether a deal between EDF and its Chinese
partner CGNPC put French strategic interests at risk.
News about that inquiry has ruffled feathers in China, and
France last week dispatched its finance minister to assure the
Chinese that they were not the object of the investigation.
As Montebourg returns from Saudi Arabia, French Trade
Minister Nicole Bricq will leave for China, where she will tour
the two EPRs being built there and talk to officials.
She may need more charm than Montebourg. Not only are the
stakes higher, but it is easier to build new relationships than
to repair existing ones.
(Reporting by Geert De Clercq; editing by Jane Baird)