Russia's Economic Development and Trade Minister German Gref seconded this, saying he hopes that for another thirty or forty years and more no one will have reason to say Russia has become less reliable as a supplier. Putin spoke of diversification in the energy sector, saying that Russia would like to be more than a mere supplier of energy resources and that Russian companies are interested in gaining direct access to energy markets in other countries.

 

A deal has been struck between BASF and Gazprom that brings German and Russian interests together. BASF subsidiary Wintershall and the Russian energy giant have agreed on a quid pro quo equity swap. BASF will receive holdings giving it a more than one-third share in gas production in the Yuzhno-Russkoye field. In return, Gazprom's holdings in Wingas will give it direct access to the natural gas market in Germany.

 

Merkel called the agreement a substantive advance in the cooperative relationship between the two countries.

 

Russia a key energy supplier

 

Germany satisfies a large part of its energy needs with resources imported from Russia. Over 41 percent of German natural gas imports come from there. Merkel noted that Russia has been a reliable supplier for more than forty years now.

 

Siberia accounts for 70 percent of Russia's oil and coal production as well as 90 percent of the natural gas it produces. During their meeting in Tomsk the two governments agreed to engage in economic cooperation in Siberia. Á joint conference is to be held here next year to work out the details. The two sides also discussed renewables in the context of their cooperation in the energy sector. Putin and Merkel agreed to address this subject at a joint energy forum to be held later this year.

Energy supplies will be a focus of this year's meeting of the G8 under Russian presidency in July. Putin announced that nuclear energy will be among the items on the agenda.

The German government is currently working on a long-term energy supply strategy. It aims to finish working out the details of an overall energy strategy by the middle of next year for the period extending up to 2020. The objective is to guarantee affordable, secure, and environmentally friendly energy supplies. The German energy sector has promised to invest more than 30 billion euros in new power plants and infrastructures by 2012.   >> Billions to be invested in energy security for the future

Coordinated response to Iran

The two governments continue to hope for a diplomatic solution in the dispute with Iran. Merkel noted the interest of both sides in seeing unity of action on the part of the international community.

 

The trip to Tomsk is Merkel's second visit to Russia. She met with Putin in Moscow in January, at which time they agreed to coordinate their positions on Iran.

 

Political and economic delegation

 

Intergovernmental consultations also involve talks between ministers. Merkel was accompanied on this trip by ten members of her cabinet, an indication of the importance attributed to the interchange. Thirteen cabinet ministers were involved in the consultations on the Russian side.

 

Merkel was also accompanied by a twenty-man economic delegation, including representatives of Deutsche Bank, Siemens, E.on, BASF, Deutsche Bahn, as well as a number of SMEs.

 

Expansion of trade relations

 

Merkel noted that trade between the two countries is by no means limited to the energy sector.

 

She and Putin jointly attended an economic forum at which focal areas were defined for future development: vehicle manufacturing, the aerospace industry, transport/logistics, health care/medical technology. Russia is planning major investments in these areas, resulting in attractive opportunities for German industry. Putin pledged government support for German investors.

 

The following were among the agreements signed in Tomsk:

 

• Deutsche Bahn and Russian Railways founded a joint logistics company.

   

• EADS and Airbus concluded a cooperation agreement.

   

• Volkswagen is planning a production site in the Moscow area.

   

• A German-Russian Chamber of Commerce is to be established in Moscow, something that will be of particular benefit to smaller companies. Merkel would like to see this happen before the end of this year.

   

The volume of trade with Russia grew by 24 percent last year to 38.9 billion euros. Imports from Russia amounted to 21.6 billion euros, while exports to Russia totaled 17.3 billion euros. Russia was the fastest growing market for German products last year. Germany is Russia's most important trading partner, accounting for 9.7 percent of its foreign trade.

Merkel also made use of her trip to Tomsk to meet with representatives of the German minority in the region.