Govt. decides in favor of Russian energy deal

A platform for Serbian-Russian cooperation in the energy industry has been agreed on at today’s government session. According to a statement, talks with the Russian government on cooperation in the oil and gas sector will be resumed “so that agreement can be reached between the two countries by honoring mutual interests.” Govt. decides in favor of Russian energy deal Earlier, Belgrade media reported that Russia had offered EUR 400 to 500mn for a majority holding in the Serbian Oil Company (NIS), together with an investment of EUR 500mn by 2012 in exchange for building the South Stream pipeline through Serbia, though no firm guarantees have been offered for this project. Energy Observer’s website wrote that the government had until January 18 to decide on the offer. Yesterday, the Economy Ministry called on the prime minister to review the draft proposal thoroughly, as “the Russian proposal is exceedingly unfavorable for Serbia and seriously jeopardizes national economic interests.” The ministry announced that the Russian proposal did not offer Serbia any guarantees that the Southern Stream pipeline would pass through Serbia, and sought NIS (the Serbian Oil Company) for a rock-bottom price through a direct deal. Economy Minister Mladjan Dinkic told Reuters that the Russian offer of EUR 400mn for a 51 percent holding in NIS was insulting and unacceptable. According to estimates, NIS’s assets alone are worth EUR 800mn, not including the part of the company on the market, said Dinkic. “We’re expected to immediately hand over our most valuable assets, while the pipeline won’t arrive until 2013 at the earliest,” said the minister. “We want an international tender to establish NIS’s market value,” he added. However, Mining and Energy Minister Aleksandar Popovic said that the energy agreement did not mention any figures. He did not want to go into the details of the agreement until everything had been agreed, though he insisted that it guaranteed Serbia’s energy stability, which was the deal’s basic aim. “The arrival of the Southern Stream pipeline and the modernization of NIS safeguards citizens’ supply of oil and gas in the long term,” said Popovic. Energoportal Info website Director Dragan Nedeljkovic says that the Russian offer of long-term energy supply should cover everything. “Serbia has been offered a package which involves the construction of a major pipeline going towards Europe across Serbia, guaranteeing the country at least 5 billion cubic per year. The other part of the agreement is the construction of the underground reservoir, and the third, modernization of NIS. Energy experts are amazed that anyone opposes such a deal, especially as it’s an international agreement,” said Nedeljkovic. He added that the agreement did not include any figures, rather basic principles of cooperation. “There are no actual figures yet in the proposal, they still need to be discussed. What we’ve got here is a whole package and the proposal to set up three joint energy companies. The idea is for one of Europe’s biggest energy giants to be established in Serbia. In international terms, Gasprom is one of the biggest companies,” Nedeljkovic pointed out. In early December, Russia offered Serbia an agreement on energy cooperation which, under the Russians’ proposal, would include, among other things, the construction of a major pipeline through Serbia, modernization of the Serbian Oil Company, and the creation of an underground natural gas reservoir in Banatski Dvor. At today’s session, the government is due to decide on a government Working Group’s proposal for cooperation between Russia and Serbia in the energy sector. Vojislav Kostunica, right, during the session today (Tanjug)

Govt. decides in favor of Russian energy deal

Earlier, Belgrade media reported that Russia had offered EUR 400 to 500mn for a majority holding in the Serbian Oil Company (NIS), together with an investment of EUR 500mn by 2012 in exchange for building the South Stream pipeline through Serbia, though no firm guarantees have been offered for this project.

Energy Observer’s website wrote that the government had until January 18 to decide on the offer.

Yesterday, the Economy Ministry called on the prime minister to review the draft proposal thoroughly, as “the Russian proposal is exceedingly unfavorable for Serbia and seriously jeopardizes national economic interests.”

The ministry announced that the Russian proposal did not offer Serbia any guarantees that the Southern Stream pipeline would pass through Serbia, and sought NIS (the Serbian Oil Company) for a rock-bottom price through a direct deal.

Economy Minister Mlađan Dinkić told Reuters that the Russian offer of EUR 400mn for a 51 percent holding in NIS was insulting and unacceptable. According to estimates, NIS’s assets alone are worth EUR 800mn, not including the part of the company on the market, said Dinkić.

“We’re expected to immediately hand over our most valuable assets, while the pipeline won’t arrive until 2013 at the earliest,” said the minister. “We want an international tender to establish NIS’s market value,” he added.

However, Mining and Energy Minister Aleksandar Popović said that the energy agreement did not mention any figures. He did not want to go into the details of the agreement until everything had been agreed, though he insisted that it guaranteed Serbia’s energy stability, which was the deal’s basic aim.

“The arrival of the Southern Stream pipeline and the modernization of NIS safeguards citizens’ supply of oil and gas in the long term,” said Popović.

Energoportal Info website Director Dragan Nedeljković says that the Russian offer of long-term energy supply should cover everything.

“Serbia has been offered a package which involves the construction of a major pipeline going towards Europe across Serbia, guaranteeing the country at least 5 billion cubic per year. The other part of the agreement is the construction of the underground reservoir, and the third, modernization of NIS. Energy experts are amazed that anyone opposes such a deal, especially as it’s an international agreement,” said Nedeljković.

He added that the agreement did not include any figures, rather basic principles of cooperation.

“There are no actual figures yet in the proposal, they still need to be discussed. What we’ve got here is a whole package and the proposal to set up three joint energy companies. The idea is for one of Europe’s biggest energy giants to be established in Serbia. In international terms, Gasprom is one of the biggest companies,” Nedeljković pointed out.

In early December, Russia offered Serbia an agreement on energy cooperation which, under the Russians’ proposal, would include, among other things, the construction of a major pipeline through Serbia, modernization of the Serbian Oil Company, and the creation of an underground natural gas reservoir in Banatski Dvor.

At today’s session, the government is due to decide on a government Working Group’s proposal for cooperation between Russia and Serbia in the energy sector.