June 24, 2015 / 5:01 PM / 5 years ago

UPDATE 1-France, Saudi Arabia inch closer to civil nuclear deal

* France pushes for major nuclear reactor deal

* Improved Saudi-French relations lift commercial ties

* France says seals $12 bln of deals from Saudi Arabia (Recasts with EPR details, French diplomat comment, background)

By John Irish

PARIS, June 24 (Reuters) - France and Saudi Arabia agreed on Wednesday to press ahead with feasibility studies to build two flagship Areva-designed EPR nuclear reactors as the two allies firm up business ties amid tensions across the region.

The countries set up a joint committee in May to finalise some 20 projects across sectors ranging from defence to transport infrastructure and civil aviation over the coming months worth billions of euros.

“We are about to sign deals worth $12 billion,” French Foreign Minister Laurent Fabius told a news conference ahead of a ceremony between President Francois Hollande and Saudi Deputy Crown Prince Mohammed bin Salman.

France has been able to nurture new links with the Gulf Arab region due to its tough stance on Iran, similar positions on conflicts across the Middle East and in the face of what some Gulf countries perceive as disengagement on the part of traditional ally the United States.

Few new contracts were announced on Wednesday, with the core deal being the reiteration of a firm Airbus order made at the Paris air show last week by Saudi Arabian Airlines worth $8 billion at list prices.

The reactor feasibility studies could signal an opening of the Saudi market for French nuclear group Areva, which has struggled to win export contracts. It lost a key tender in the Middle East in late 2009 when the United Arab Emirates picked a consortium of Korean companies to build the Gulf Arab region’s first nuclear power station.

“We have enabled our partnership to take a significant step forward,” a senior French diplomat said, adding that France was the first country to sign such an agreement with the kingdom.

The Saudis also signed a nuclear waste disposal contract and a nuclear safety accord on Wednesday.

Like other Middle Eastern oil producing countries, Saudi Arabia is looking to nuclear and solar energy in order to minimise domestic oil and gas consumption.

Contracts agreed on Wednesday also included 23 light twin-engined Airbus H145 helicopters worth $500 million, Fabius said.

Saudi Foreign Minister Adel al-Jubeir said talks were ongoing on price for a contract for French naval patrol boats built by DCNS, partly owned by Thales. The two sides are aiming to finalise the majority of deals under discussion in October.

“Our ties are excellent, historic and strategic,” Jubeir said. “We are trying to take them even higher.”

France has already won about $15 billion of defence contracts in the region over the last year. (Reporting by John Irish and Geert De Clercq; Editing by Mark John and James Regan)

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