Tripoli: Libyan leader Muammar Gaddafi hailed Russian President Vladimir Putin's official visit as "historic and strategic" during a state dinner at the Bab Azizia palace, state television reported yesterday.
"This is the first visit by a Russian president to Libya. It is a historic, strategic and very important visit," Gaddafi said in a speech late on Wednesday.
"The trip will enable increased cooperation, given that we are both producers of gas and oil," Gaddafi said. "We will work together to defend our interests."
Libya is a non-permanent member of the UN Security Council for 2007 to 2008, and Gaddafi said the world body needed to be reformed in order to face what he called an "imbalance of forces" internationally.
Putin, who spoke in Russian, said: "We must reflect on the project to reform the United Nations" and referred to "a friendly country on the Security Council with which we can work together to resolve problems."
The Russian president said "a large number of agreements" would be signed between the two countries during his 24-hour visit to Libya.
Putin arrived in Tripoli on Wednesday at the head of a large delegation for a visit expected to be dominated by talks over energy contracts and arms sales.
Libya welcomes the idea of creating an OPEC-like group of gas-exporting countries, Gaddafi told Putin, the official Jana news agency reported yesterday.
Turning to oil, Gaddafi added that oil producing countries had a duty "to do something to help countries affected by the price hikes, particularly the African countries."
Some gas exporting countries are exploring the idea of turning an informal club of major gas exporting nations into a more formal organisation with an Opec-like charter.
The United States and the European Union have repeatedly warned that turning the Gas Exporting Countries Forum into an OPEC-style gas group would pose a serious danger to global energy security and create room for price manipulation.
Russia used Putin's visit to announce the scrapping of billions of dollars in Libyan Soviet-era debt in exchange for business contracts.
"Russia has cancelled the debt in exchange for several billions of dollars in contracts for Russian companies," Russian Finance Minister Alexei Kudrin was quoted by Russian news agencies as saying in Tripoli.
"We are satisfied about the way in which we resolved this problem. I am absolutely convinced that the solution we have found will help the Russian and Libyan economies," the agencies quoted Putin as saying.
In Moscow, Russian news agencies are reporting that Moscow will write off $4.5 billion (Dh16.5b) in Libyan debt in exchange for multibillion dollar deals for Russian firms.
During Putin's visit, Russian gas giant Gazprom signed a cooperation deal with Libya's national energy company.
The agreement talks about joint exploration and production projects in Libyan oil and gas reserves, as well as the construction of new power stations and liquefied natural gas (LNG) facilities, Gaz-prom's press service said in Moscow.
Food prices: Cause for worry
Libya is worried by rising world food prices which will result in a "very serious" trend towards monopolies in foodstuffs, Muammar Gaddafi said in remarks published yesterday.
The Libyan leader said his country, concerned with preserving international peace and security, would oppose any development of food monopolies.
The mostly desert north African country is reliant on food imports for about 80 per cent of its needs.
"We are thinking about our peace and security. We are disturbed by the rising prices of food in the world. This will lead to a monopoly of foodstuffs by specific parties and this is very serious and must be confronted," the official Jana news agency quoted him as saying.