BRUSSELS (Reuters) - Algeria and the European Union signed a draft agreement on closer energy cooperation on Sunday during an official visit by European Commission President Jose Manuel Barroso.

The EU executive said the memorandum of understanding would set up a framework for the EU and Algeria to work together on gas and oil issues.

"This memorandum, I would emphasise, therefore reflects our strong common interests," Mr Barroso said in a statement.

The EU is keen to diversify its energy supplies.

It already imports natural gas from Algeria, but has ambitions to develop the country's solar resources and use them to help meet EU demand.

Desertec, a German consortium set up in 2009, projects that Europe will import up to a fifth of its electricity from solar and wind parks in North Africa and the Middle East by 2050.

Its executive arm is the Desertec Industrial Initiative, which brings together companies including Siemens AG.