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Kremlin chief to court Algeria on Vimpelcom deal

(repeats piece issued on Oct 5)

* Russian President Medvedev to visit Algeria

* Kremlin to seek Algeria’s help on Vimpelcom purchase

* Russia’s TNK-BP seeking to buy BP assets in Algeria

By John Bowker

MOSCOW, Oct 5 (Reuters) - Russian President Dmitry Medvedev faces an uphill battle on Wednesday when he tries to convince Algeria to approve the sale of its biggest mobile telephone operator and BP’s Algerian assets to Russian companies.

Medvedev’s ability to clinch mega deals for Russian business that are the hallmark of his patron, Vladimir Putin, will be put to the test on the complex transactions that depend on Algerian President Abdelaziz Bouteflika.

Medvedev makes a one-day official visit to Algeria on Oct 6.

Russia's Vimpelcom's VIP.N bid to become the world's fifth largest mobile phone operator by buying control of Egyptian tycoon Naguib Sawiris's main telecoms assets for $6.6 billion is on the line. [ID:nLDE6930OI]

The jewel in the crown of the proposed deal is Orascom Telecom's ORTE.CA local Algerian unit Djezzy, its biggest revenue earner, which Algeria's government says it wants to nationalise after a dispute over tax bills.

“The presence of Medvedev is not exactly a coincidence,” said Elena Mills, a senior analyst at Alfa Bank in Moscow.

“Now a deal has been announced he can raise the issue of Djezzy. That Russia and Algeria both have oil and gas assets is helpful -- a common ground could be found.”

Algerian law gives the government the right to block any sale of the Algerian unit and it has already rejected approaches from Egyptian President Hosni Mubarak and South African President Jacob Zuma to sanction the sale of Djezzy.

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When asked whether Medvedev’s trip to Algiers would improve things for Djezzy, Sawiris said: “Yes, definitely”

“I’m sure he’s (Medvedev) going to raise the subject and he’s going to try and help improve the circumstances under which Djezzy operates,” Sawiris said in a phone interview. He also said that the deal had a 90 percent chance of going through.

Vimpelcom CEO Alexander Izosimov, who will travel to Algiers in Medvedev’s delegation, said the timing of the acquisition announcement was linked to anticipated talks in Algeria.

Russian billionaire Mikhail Fridman, whose industrial group controls a 40 percent stake in Vimpelcom, will also travel with Medvedev’s delegation.

Algeria has given no indication if it will allow a sale to Vimpelcom and on Tuesday said Vimpelcom’s plans did not affect the government’s plan to buy Djezzy. [ID:nAHM542024]

Medvedev also faces tough talks on getting Russian oil and gas majors more access to Algeria’s energy sector.

Algeria says it is considering a request from BP BP.L to approve the sale of its Algerian assets to TNK-BP TNBPI.RTS, BP's Russian joint venture.

Russia also wants state-controlled gas giant Gazprom GAZP.MM to increase cooperation with Algeria's Sonatrach and arms sales to Algeria, Russia's biggest purchaser of arms in 2009, will be also be discussed, the Kremlin said.

“The large gas reserves in Algeria underscore the importance of cooperation between Gazprom and Sonatrach,” Medvedev’s top foreign policy aide, Sergei Prikhodko, told reporters in Moscow. “We are interested in developing cooperation.”

Gazprom CEO Alexei Miller will accompany Medvedev to Algeria and though the gas giant did not acquire any fresh acreage in the last oil and gas bid round, it may try to pick up a concession in a licensing round now underway. [ID:nLDE681213] (Additional reporting by Dina Zayed and Alexander Dziadosz in Cairo, Melissa Akin in Moscow and Christian Lowe in London; writing by Guy Faulconbridge; editing by Myra MacDonald)

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