"Gas Affair" shakes Serbia

The energy minister has suggested to the Srbijagas board of directors not to make any decisions to confirm a contentious annex to a contract to buy natural gas. Skundric, SPS, said at a meeting of parliament’s industry committee that his ministry and the government have agreed to look into the all the controversial questions, including the forming new natural gas prices and the signing of the annex agreement for the purchase of gas by Srbijagas Director Sasa Ilic. "Gas Affair" shakes Serbia Earlier, G17 Plus party officials called on the Energy Ministry to find out why Ilic was allowed to sign the agreement with Jugorosgas worth EUR 700mn, without the approval of his company’s board of directors. Skundric said that the government is ready to determine responsibility in all actions that were illegal or any possible abuse of official position. He said that the annex agreement "in a material sense" did not violate any regulations related to the normal practice of putting together such deals, and that at issue is “a statement of reserving necessary supplies of gas for 2009”. The minister added that the controversial contract is a commercial agreement between two companies, but that the government needs to make a decision on the method of purchase and to guarantee the stability of gas supplies. Skundric also explained that the annex in question cannot take power until it is adopted by the public gas company's board of director, and that, prior to this move, the government will reach its decision on the issue. Also today, Economy Minister Mladjan Dinkic said that the annex of the gas import agreement with Jugorosgas is undermining Serbia’s position in negotiations with Gazprom. “We are negotiating a new agreement for the Serbian Oil Industry (NIS), the construction of the gas pipeline and the Banatski Dvor reservoir. Our aim in these negotiations is to ask for the middle man to be cut out,” Dinkic said. He said that an agreement had been signed with Jugorosgas in 2006 because Russia’s condition at the time had been: “either have Jugorosgas as the go-between, or no gas.” Dinkic claims that the annex of the gas import agreement, which Srbijagas Director Sasa Ilic signed with Jugorosgas, has compromised Serbia’s position in the talks with Gazprom. Ilic should not done that without the approval of the government and Srbijagas’ Board of Directors, the minister underlined. Speaker: Govt. to consider dodgy gas deal Speaker Slavica Djukic Dejanovic says that the divisive annex of the gas agreement will not enter force until the government has considered it thoroughly. G17 Plus and Liberal Democratic Party MPs insisted that the government answer why Acting Srbijagas CEO Sasa Ilic signed an annex to the agreement with Jugorosgas worth EUR 700mn without the knowledge of the Srbijagas Board of Directors. The adoption of that agreement's annex, signed by Ilic last week, effectively extends the partnership with Jugorosgas, which, as a broker, was due to be excluded from the job once implementation of the Serbia-Russia energy agreement began. Ilic informed B92 yesterday that the document in question was only of a preparatory nature. B92 understands that Ilic, who was appointed as a director of Srbijagas as a Democratic Party of Serbia (DSS) member, will be relieved of his duties tomorrow. Interior Minister Ivica Dacic echoed the speaker’s words.“The contract won’t enter force with the government’s approval and agreement,“ said Dacic. “Our anti-organized crime department has begun collecting information on all the allegations that have been heard these last few days concerning the gas situation, and if any of the questionable issues contain any criminal elements, MUP will take all the necessary steps,“ the minister assured. The government was asked the question by G17 Plus MP Suzana Grubjesic. “Acting Srbijagas CEO Sasa Ilic was in Moscow on October 14 to sign an annex to the contract worth EUR 700mn, for 2.3 million cc, for which Jugorosgas took a commission of EUR 35mn,“ said Grubjesic. Meanwhile, Liberal Democratic Party (LDP) MPs have insisted on a meeting of the parliamentary Industry Committee. The committee convened last night, but as there was no support for a declaration, which the LDP is insisting on, the meeting will continue today. Mining and Energy Minister Petar Skundric is also due to attend that meeting. The LDP is insisting on a declaration stating that the government orders the Srbijagas Board of Directors not to endorse the contract or annex to the contract on the purchase of natural gas until a final government decision. The LDP’s Ivan Andric said that the party was recommending that the committee call on the government to take a decision to reduce the price of gas at its next cabinet meeting, to draw up a program of subsidy measures for homes and natural gas users, and to carry out an inquiry into Srbijagas and Jugorosgas’ business activities. Adoption of any declaration by the Industry Committee is, in any case, restricted by time as Srbijagas’s Board of Directors are due to meet this afternoon at 14:00 CET.

"Gas Affair" shakes Serbia

Earlier, G17 Plus party officials called on the Energy Ministry to find out why Ilić was allowed to sign the agreement with Jugorosgas worth EUR 700mn, without the approval of his company’s board of directors.

Škundrić said that the government is ready to determine responsibility in all actions that were illegal or any possible abuse of official position.

He said that the annex agreement "in a material sense" did not violate any regulations related to the normal practice of putting together such deals, and that at issue is “a statement of reserving necessary supplies of gas for 2009”.

The minister added that the controversial contract is a commercial agreement between two companies, but that the government needs to make a decision on the method of purchase and to guarantee the stability of gas supplies.

Škundrić also explained that the annex in question cannot take power until it is adopted by the public gas company's board of director, and that, prior to this move, the government will reach its decision on the issue.

Also today, Economy Minister Mlađan Dinkić said that the annex of the gas import agreement with Jugorosgas is undermining Serbia’s position in negotiations with Gazprom.

“We are negotiating a new agreement for the Serbian Oil Industry (NIS), the construction of the gas pipeline and the Banatski Dvor reservoir. Our aim in these negotiations is to ask for the middle man to be cut out,” Dinkić said.

He said that an agreement had been signed with Jugorosgas in 2006 because Russia’s condition at the time had been: “either have Jugorosgas as the go-between, or no gas.”

Dinkić claims that the annex of the gas import agreement, which Srbijagas Director Saša Ilić signed with Jugorosgas, has compromised Serbia’s position in the talks with Gazprom.

Ilić should not done that without the approval of the government and Srbijagas’ Board of Directors, the minister underlined.

Speaker: Govt. to consider dodgy gas deal

Speaker Slavica Đukić Dejanović says that the divisive annex of the gas agreement will not enter force until the government has considered it thoroughly.

G17 Plus and Liberal Democratic Party MPs insisted that the government answer why Acting Srbijagas CEO Saša Ilić signed an annex to the agreement with Jugorosgas worth EUR 700mn without the knowledge of the Srbijagas Board of Directors.

The adoption of that agreement's annex, signed by Ilić last week, effectively extends the partnership with Jugorosgas, which, as a broker, was due to be excluded from the job once implementation of the Serbia-Russia energy agreement began.

Ilić informed B92 yesterday that the document in question was only of a preparatory nature.

B92 understands that Ilić, who was appointed as a director of Srbijagas as a Democratic Party of Serbia (DSS) member, will be relieved of his duties tomorrow.

Interior Minister Ivica Dačić echoed the speaker’s words.“The contract won’t enter force with the government’s approval and agreement,“ said Dačić.

“Our anti-organized crime department has begun collecting information on all the allegations that have been heard these last few days concerning the gas situation, and if any of the questionable issues contain any criminal elements, MUP will take all the necessary steps,“ the minister assured.

The government was asked the question by G17 Plus MP Suzana Grubješić.

“Acting Srbijagas CEO Saša Ilić was in Moscow on October 14 to sign an annex to the contract worth EUR 700mn, for 2.3 million cc, for which Jugorosgas took a commission of EUR 35mn,“ said Grubješić.

Meanwhile, Liberal Democratic Party (LDP) MPs have insisted on a meeting of the parliamentary Industry Committee. The committee convened last night, but as there was no support for a declaration, which the LDP is insisting on, the meeting will continue today.

Mining and Energy Minister Petar Škundrić is also due to attend that meeting.

The LDP is insisting on a declaration stating that the government orders the Srbijagas Board of Directors not to endorse the contract or annex to the contract on the purchase of natural gas until a final government decision.

The LDP’s Ivan Andrić said that the party was recommending that the committee call on the government to take a decision to reduce the price of gas at its next cabinet meeting, to draw up a program of subsidy measures for homes and natural gas users, and to carry out an inquiry into Srbijagas and Jugorosgas’ business activities.

Adoption of any declaration by the Industry Committee is, in any case, restricted by time as Srbijagas’s Board of Directors are due to meet this afternoon at 14:00 CET.