Gazprom: Energy deal delay will cost Serbia

Gazpromneft Deputy CEO Dmitry Malishev says any delays in ratification of the energy agreement will cost Serbia dear. Malishev pointed out that it was already five months since the deal had been signed in Moscow, stressing that much could have been done for the Serbian Oil Industry’s (NIS) reconstruction in that time. Gazprom: Energy deal delay will cost Serbia “We’ve never been in a better position, oil prices are rising every day on the international market, our revenue is constantly increasing, but for Serbia, every day means more losses,” Malishev told journalists and economic editors in Belgrade. He stressed that Gazpromneft would adhere to what had been negotiated and stated in the energy agreement, adding that this meant that the company would buy a 51 percent stake in NIS for EUR 400mn, and invest a further EUR 500mn in its reconstruction and modernization. The deputy CEO said that the Russian oil giants’ own experts, as well as independent auditors, had carried out an assessment of the value of NIS’s assets. By taking a controlling stake in NIS, Gazpromneft would assume control over the output, refinement, and sale of oil derivatives on the market, explained Malishev. “We’re ready to begin NIS’s construction and modernization immediately after ratification,” the deputy CEO underlined, adding that reconstruction of NIS could be complete in the next three to four years, and that the NIS refinery could be profitable and competitive by 2010. He said that the government, in signing the agreement, had committed to liberalizing the crude market by no later than mid-2010, explaining that by then, Gazpromneft was due to reconstruct NIS, so that it could produce high-quality derivatives at competitive prices, all of which meant that the only ones to lose out from any further delays in ratification would be Serbia, not the Russian company. Reconstruction of NIS would increase the company’s capital, boosting the value of shares held by the Serbian state, Malishev explained. The energy agreement was signed in Moscow on January 26, 2008 in the presence of then Russian President Vladimir Putin, President Boris Tadic, and then Prime Minister Vojislav Kostunica. The agreement provided for cooperation in building a major pipeline artery, an underground gas reservoir in Banatski Dvor, and modernization of NIS. The deal is due to be ratified by the new parliament,and was one of the pre-election pledges of the Democratic Party-led coalition that has formed a ruling majority in parliament.

Gazprom: Energy deal delay will cost Serbia

“We’ve never been in a better position, oil prices are rising every day on the international market, our revenue is constantly increasing, but for Serbia, every day means more losses,” Malishev told journalists and economic editors in Belgrade.

He stressed that Gazpromneft would adhere to what had been negotiated and stated in the energy agreement, adding that this meant that the company would buy a 51 percent stake in NIS for EUR 400mn, and invest a further EUR 500mn in its reconstruction and modernization.

The deputy CEO said that the Russian oil giants’ own experts, as well as independent auditors, had carried out an assessment of the value of NIS’s assets.

By taking a controlling stake in NIS, Gazpromneft would assume control over the output, refinement, and sale of oil derivatives on the market, explained Malishev.

“We’re ready to begin NIS’s construction and modernization immediately after ratification,” the deputy CEO underlined, adding that reconstruction of NIS could be complete in the next three to four years, and that the NIS refinery could be profitable and competitive by 2010.

He said that the government, in signing the agreement, had committed to liberalizing the crude market by no later than mid-2010, explaining that by then, Gazpromneft was due to reconstruct NIS, so that it could produce high-quality derivatives at competitive prices, all of which meant that the only ones to lose out from any further delays in ratification would be Serbia, not the Russian company.

Reconstruction of NIS would increase the company’s capital, boosting the value of shares held by the Serbian state, Malishev explained.

The energy agreement was signed in Moscow on January 26, 2008 in the presence of then Russian President Vladimir Putin, President Boris Tadić, and then Prime Minister Vojislav Koštunica.

The agreement provided for cooperation in building a major pipeline artery, an underground gas reservoir in Banatski Dvor, and modernization of NIS.

The deal is due to be ratified by the new parliament,and was one of the pre-election pledges of the Democratic Party-led coalition that has formed a ruling majority in parliament.