Energy deal signed, sealed

A contract for the sale of a 51% stake in NIS to Gazprom has been signed today in Moscow, as have deals on the construction of a pipeline and gas reservoir. At the same time, Russian and Serbian Presidents Dmitry Medvedev and Boris Tadic will pen an umbrella agreement providing political guarantees that Serbia will receive a stretch of the South Stream gas pipeline and that the underground gas storage facility in Banatski Dvor will be finalized. Energy deal signed, sealed The two presidents said, ahead of the signing of the agreement in the Kremlin, that the arrangement would constitute a basis for the two countries' energetic stability. In the part of the meeting open to the public, Medvedev said that agreements on economic cooperation were very important for both countries and that they provided grounds for future cooperation between Russia and Serbia. At the same time, energy cooperation laid the foundation for ensuring energetic stability in Serbia, as well as in the region as a whole, the Russian president underlined. Medvedev assessed that relations between Belgrade and Moscow were developing successfully and expressed his hope that economic cooperation between the two countries would intensify. Tadic pointed out that the energy arrangement would constitute a strong economic bond between Russia and Serbia, and that it would contribute to economic and energy stability in both countries. The Serbian president said that Serbia wanted to become a member of the European Union, but also to have friendly relations with Russia. Tadic and Medvedev, together with their associates, then continued closed-door talks on the energy deal. Boris Tadic, Dmitry Medvedev sign the contracts (Tanjug) "Defense of vital interests" Ahead of his journey to Moscow, Tadic said that Serbia had achieved a lot in its talks with Russia on the energy agreement and that it had safeguarded vital national interests. “I’m certain that we have a good agreement that should ultimately result in the construction of the South Stream pipeline, and we have a certain confirmation or guarantee that the pipeline will come to this neck of the woods,” the president said. “The guarantees are at the level of a document the Russian president, Mr. Medvedev, and I, as president, will sign, where our states will stand behind the implementation of these agreements,” he said. Tadic stated that “one other guarantee, maybe even bigger than all the others, is the fact that Europe requires 200 billion cubic meters of gas over the next five years.” The president said that Serbia had secured the highest possible level of guarantees that all three parts of the deal would be honored. “We also have guarantees when it comes to the Serbian Oil Industry (NIS). We’ve extracted a pension plan to protect our people working in NIS, that was also a subject of the talks,” he underlined. “We’ve also won assurances for the environment, we’ve extracted guarantees linked to investment. That way, over EUR 500mn will be pumped into NIS in the coming years,” said Tadic. The contract for the NIS sale is due to be signed by Mining and Energy Minister Petar Skundric, while Srbijagas CEO Dusan Bajatovic will sign the agreement for Banatski Dvor and the pipeline. Under the contract for the sale of NIS, Gazprom will purchase a 51 percent stake in the company for EUR 400mn, and invest a further EUR 547mn in restructuring. The contract, adopted during a government conference call, states that the buyer will secure a loan of EUR 500mn, repayable over 14 years, in order to implement the investment. Although Gazprom’s commitments depend on the current assessments, the contract can be terminated should the company fail to meet its investment obligations. Should the buyer fail to meet the agreed investment obligations, the agreement will be canceled, whereupon Gazpromneft - a daughter company of Gazprom - would pay the total purchase price and give to the seller, the Republic of Serbia, "the right to its shares" and the obligations deriving from that. The document does not specify which guarantees are being given by the buyer for meeting certain investment obligations in the planned time frame.

Energy deal signed, sealed

The two presidents said, ahead of the signing of the agreement in the Kremlin, that the arrangement would constitute a basis for the two countries' energetic stability.

In the part of the meeting open to the public, Medvedev said that agreements on economic cooperation were very important for both countries and that they provided grounds for future cooperation between Russia and Serbia.

At the same time, energy cooperation laid the foundation for ensuring energetic stability in Serbia, as well as in the region as a whole, the Russian president underlined.

Medvedev assessed that relations between Belgrade and Moscow were developing successfully and expressed his hope that economic cooperation between the two countries would intensify.

Tadić pointed out that the energy arrangement would constitute a strong economic bond between Russia and Serbia, and that it would contribute to economic and energy stability in both countries.

The Serbian president said that Serbia wanted to become a member of the European Union, but also to have friendly relations with Russia.

Tadić and Medvedev, together with their associates, then continued closed-door talks on the energy deal.

"Defense of vital interests"

Ahead of his journey to Moscow, Tadić said that Serbia had achieved a lot in its talks with Russia on the energy agreement and that it had safeguarded vital national interests.

“I’m certain that we have a good agreement that should ultimately result in the construction of the South Stream pipeline, and we have a certain confirmation or guarantee that the pipeline will come to this neck of the woods,” the president said.

“The guarantees are at the level of a document the Russian president, Mr. Medvedev, and I, as president, will sign, where our states will stand behind the implementation of these agreements,” he said.

Tadić stated that “one other guarantee, maybe even bigger than all the others, is the fact that Europe requires 200 billion cubic meters of gas over the next five years.”

The president said that Serbia had secured the highest possible level of guarantees that all three parts of the deal would be honored.

“We also have guarantees when it comes to the Serbian Oil Industry (NIS). We’ve extracted a pension plan to protect our people working in NIS, that was also a subject of the talks,” he underlined.

“We’ve also won assurances for the environment, we’ve extracted guarantees linked to investment. That way, over EUR 500mn will be pumped into NIS in the coming years,” said Tadić.

The contract for the NIS sale is due to be signed by Mining and Energy Minister Petar Škundrić, while Srbijagas CEO Dušan Bajatović will sign the agreement for Banatski Dvor and the pipeline.

Under the contract for the sale of NIS, Gazprom will purchase a 51 percent stake in the company for EUR 400mn, and invest a further EUR 547mn in restructuring.

The contract, adopted during a government conference call, states that the buyer will secure a loan of EUR 500mn, repayable over 14 years, in order to implement the investment.

Although Gazprom’s commitments depend on the current assessments, the contract can be terminated should the company fail to meet its investment obligations.

Should the buyer fail to meet the agreed investment obligations, the agreement will be canceled, whereupon Gazpromneft - a daughter company of Gazprom - would pay the total purchase price and give to the seller, the Republic of Serbia, "the right to its shares" and the obligations deriving from that.

The document does not specify which guarantees are being given by the buyer for meeting certain investment obligations in the planned time frame.