Serbia Adopts Russian Energy Deal

[Crvena zvezda]

Serbia Adopts Russian Energy Deal

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22 January 2008 Belgrade _ Serbia’s government has approved a crucial energy deal with Russia, involving the sale of a majority stake in Serbia’s top oil and gas company, NIS, in exchange for the building of a gas pipeline and storage unit.

The controversial deal, endorsed by the government on Tuesday, will involve the sale of a 51% stake in state-owned NIS, Naftna Industrija Srbije to Russia's energy giant, OAO Gazprom.
“The agreement will be a basis for more talks between the Srbijagas gas provider and Gazprom and a basis for further talks over an agreement between the Serbian government and Gazpromneft about the sale of Naftna Idustrija Srbije,” a statement from the office of the Prime Minister Vojislav Kostunica said.
The statement added that the cabinet had authorized Velimir Ilic, the Infrastructure Minister, to sign the deal on January 25 in Moscow.
Ilic told reporters that the details of the deal were not adopted, but that he was “honoured to sign Serbia’s most important strategic deal.”
It is not clear from reports how much Gazprom would pay for its 51% stake in NIS.
Earlier this month Gazprom said it would invest €500 million and build a part of the South Stream gas pipeline through Serbia to carry Russian gas to several European countries on the way to its final destination in Italy.
Last week Russia and Bulgaria signed a deal for the construction of a stretch of South Stream on Bulgarian territory.
A Serbian government official said that Serbia's section of “the gas pipeline will either be the main South Stream pipeline or a major side pipeline”.
“All the details will be hammered out in talks with the Russians,” he said.
Late on Monday Prime Minister Vojislav Kostunica said that “the agreement will secure stable and regular energy supplies for people in Serbia for the next few decades.”
The signing of the deal comes after the first round of Serbia’s presidential elections, and amidst talks over crucial backing from Ilic and Kostunica that incumbent President Boris Tadic needs if he is to win the February 3 run-off.
In Sunday’s ballot Tomislav Nikolic, acting leader of the opposition Serbian Radical Party, won some 39.46% of the vote, with Tadic, leader of the governing Democratic Party, in second place on 35.4%.
Political analysts say that the government’s agreement came as a part of a political trade-off with Tadic trying to secure the support of Kostunica and Ilic, both of whom have backed the deal with Moscow in the face of concerns that it would make Serbia excessively dependent on Russian energy.
Meanwhile, the G17 Plus Party, led by Economy Minister Mladjan Dinkic, said in a statement that its ministers in the government have refused to vote on the deal as "the agreement remains incomplete and can be improved."
G17 Plus, which has strongly opposed the Russian side’s initial offer, said in the statement: "As the deal is negotiable, the G17 Plus will present its position only after the agreement appears before the parliament for ratification with all its elements defined