Russia-Serbia energy cooperation rises to new level
04.02.2009, 01.45 http://www.itar-tass.com/eng/images/spacer.gifhttp://www.itar-tass.com/eng/images/spacer.gif MOSCOW, February 4 (Itar-Tass) -- Oil and gas agreements between Russia and Serbia that place in Gazpromneft’s hands a controlling stake in the Serbian state oil company and pave the way for the Serbian branch of the South Stream gas pipeline are propelling bilateral cooperation to a new level. This is of particular importance at a time when after the disruptions in Russian gas supplies to Europe during the conflict between Moscow and Kiev early this year ever more European countries have been pressing for diversification of energy sources. The agreement that has been concluded, say analysts, means that Belgrade has made the political choice in favor of strategic partnership with Russia. The sum raised by the sale to Russia’s Gazpromneft of a 51-percent stake in the state-owned enterprise Naftna Industrija Srbije (NIS) – 400 million euros – has been transferred to Serbia’s budget, Serbian Energy Minister Petar Skundric said. “The money from the sale of 51 percent of NIS in an amount of 400 million euros has been entered to the country’s account,” he said. Russia and Serbia concluded the transaction on December 24, 2008. Apart from the 400 million euros Gazpromneft agreed to pay for the share package the Russian company also pledged to invest another 547 million euros in development by the end of 2012. The Russian side also undertook to lay the Serbian section of the South Stream gas pipeline and build the underground gas storage facility at Banatski Dvor. Naftna Industrija Srbije – one of the largest oil companies in Central Europe – refines crude oil and markets oil products and extracts hydrocarbons in Serbia and Angola. Its annual production of crude stands at 1 million tonnes. The company owns oil refineries in the cities of Pancevo and Novi Sad, with an overall capacity of 7.3 million tonnes a year. NIS also runs its own sales and distribution network of about 500 filling stations and is the leading provider of oil products on the Serbian market, meeting 85 percent of the domestic demand. NIS will become Gazpromneft’s first asset in a non-CIS country. Analysts say that as it gains control of NIS, Gazpromneft in fact gets access to the entire Serbian market of oil products. Also, the deal allows Gazpromneft to enhance the refining segment of its business. Gazpromneft CEO Alexander Dyukov is quoted by Finam.ru as saying “Gazpromneft’s acquisition of 51 percent of NIS is part and parcel of wider agreements between Serbia and Russia in the field of energy. For Gazpromneft control of a stake in NIS will be a natural basis for business development in Southeastern Europe.” Serbia, too, has said that it plans to invite Gazprom to use its territory for creating commercial reserves of natural gas. The head of Serbijagas, Dusan Bajatovic, came out with such a proposal at the end of January. The way he sees it, the country has exhausted oil fields that are used as underground gasholders. Their capacity ranges 5 billion cubic meters to 7 billion cubic meters. In his opinion, Gazprom might use these reservoirs for its own needs as an owner or a co-owner. Of particular importance to bilateral energy cooperation are plans for laying the Serbian branch of the South Stream gas pipeline. This Gazprom-initiated pipeline is to link Russia with Italy. Part of the pipeline is to be laid on the bed of the Black Sea to Bulgaria’s coast. This will be a new route of delivering Russian gas - not through Turkey, Ukraine or Belarus, but directly to the European Union. Under Gazprom’s plans the new pipeline is to link Russia and Central Europe via the Black Sea and a number of South European states, including Serbia. The construction of the South Stream pipeline is scheduled to begin in 2010, provided the participants in the project will not question its profitability in the context of the financial crisis. Serbia is to derive the greatest benefits from the pipeline. According to some calculations, it will be able to earn an annual 300 million euros on transiting gas alone, says the Deutsche Welle radio station. This is precisely what analysts point to as the reason why Gazprom has paid such a low price for the controlling stake in NIS. The Serbian stretch of the pipeline is to run from Dimitrovgrad to Nis, and then towards Croatia and Bosnia. Its estimated throughput is 20 billion cubic meters of gas a year. According to Serbia’s former energy minister, Radomir Naumov, the pipeline will provide a complete solution of the problem of gas supplies to Serbia and guarantee stable gas supplies to consumers in Western Europe. Russian analysts say the economic agreements with Moscow are important to Belgrade from the political standpoint as well. “The agreements signed confirm the political vector of the Serbian policy towards wider relations with Russia, in defiance of certain pressures from the European Union,” says the government-published daily Rossiiskaya Gazeta. “The agreements are political first and foremost,” agrees Kommersant. “The Serbian leadership has made a choice in favor of strategic partnership with Russia, having overcome firm resistance by opponents of that policy inside Serbia itself." The daily recalls that immediately after the disruption of gas traffic to Serbia due to Russia’s gas dispute with Ukraine the opponents of energy cooperation with Moscow grew increasingly vocal. The very stability of the Serbian government was under threat, because one of the coalition partners (Mladjan Dinkic’s Group of 17) opposes to energy cooperation with Moscow. President Boris Tadic had to issue a special statement to explain to the nation that laying a branch of the South Stream pipeline through Serbia was a solution that would help prevent any such problems in the future. “This sort of cooperation with Russia will certainly make Serbia one of the main regional transiters of gas in the Balkans, and Russia, despite its firm stance on the issue of Kosovo, will become a strategic partner and provider,” says Rossiiskaya Gazeta. “The pro-European Boris Tadic government is perfectly aware of this, and it is in no mood of losing such an excellent trump card. The Serbian president himself has demonstrated remarkable managerial qualities in conducting a skillful and well-charted policy of balancing between western and eastern neighbors." When the pipeline goes operational, Serbia will take a leading position in the region, says the Russian government daily. “Belgrade will be using its energy leverage and a balanced foreign policy in pressing for such goals as admission to the European Union and, possibly, securing the return of Kosovo.” http://www.itar-tass.com/eng/level2.html?NewsID=13544929&PageNum=0
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