“No Pipeline, No Deal’, Serbia Tells Russia

04 December 2008 Belgrade _ Belgrade says it will not sell its state-owned NIS oil company to Russia’s Gazprom if Moscow does not guarantee that it will build a gas pipeline through Serbia.

Belgrade daily Blic reports that Russian negotiators have only mentioned the sale of Serbian oil giant NIS in their new drafts related to the energy agreement with Serbia, leaving out other key projects Serbia sees as major priorities.

Blic states that the Russian’s have sent a twelve-point draft stunning the Serbian government, as it makes no mention of the South Stream gas pipeline to be built through Serbia or the construction of the Banatski Dvor underground storage facility, both of which Belgrade insists on.

Judging by these latest events, the signing of the agreement between Serbia and Russia for the entire project is unlikely any time soon, despite the fact that a Russian delegation will be in Belgrade on Friday to continue negotiations.

The initial agreement for energy cooperation was signed between the two countries in January, but none of the details have yet to be confirmed.

Russian energy giant Gazprom wants to buy Serbia’s NIS for a sum of € 400 million, which Serbia would agree to under the conditions that large investments in the company geared towards its modernisation would be realised, and that the pipeline and storage facility would also come as part of the deal.

Russia has verbally agreed to have the €10.3 billion pipeline – which is to run through Bulgaria and Serbia before heading out to Western European countries – built by 2015, despite the current international economic crisis, though nothing has been signed to confirm the promise.

“Taking the commercial side into consideration, there is no sense in selling NIS if we do not have clear guarantees that the pipeline will be built,” Serbian Prime Minister Mirko Cvetkovic told local daily, Vecernje Novosti.

Wary of Russia’s quest to dominate the European fuel market, the European Commission warned Serbia in January of selling NIS to Gazprom, stating that the price Russia is offering is extremely low, and recommending that NIS be privatised through an auction that would allow other interested European oil companies to make a bid for the Serbian monopoly.

European officials also voiced concern that the sale to Russia could be politically motivated, taking into consideration Russia’s strong support of Serbia’s bid to retain sovereignty over Kosovo, which declared independence from Belgrade in February and has been recognised by over 50 countries worldwide.
Contributed by Balkaninsight

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Posted by admin on Dec 4 2008. Filed under Economy, General News, Region. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry