The agreement gives Germany's BASF the right to take part in the development of a large gas field in Western Siberia with Russia's Gazprom.
The Yuzhno-Russkoye gas field will feed a new gas pipeline that will deliver Russian gas to Germany under the Baltic Sea.
Energy was high on the agenda of Putin's talks with Merkel in the Siberian city of Tomsk on April 26-27.
Earlier on April 27, Putin called Europe "a natural and the most convenient partner" for Russia.
However, Putin said that Russia is beginning to look for new partners because it is hearing "the same thing every day," about Europe's "excessive dependence on Russia" and the need to restrict "Russia's delivery of energy resources to European markets."
Putin stressed that this search does not mean Russia will limit supplies to Europe.
(compiled from agency reports)