Posted on 05/09/2008 11:22:38 AM PDT by joan
BELGRADE, May 9 (Itar-Tass) -- The Serbian government has unanimously approved the oil and gas agreement with Russia and recommended the parliament to ratify it, the government press office said on Friday.
The agreement will now be submitted for ratification to the new parliament, as the current parliament is dismissed to order of the national president.
A protocol to the Serbian-Russian Intergovernmental Agreement on Oil and Gas Cooperation says that the agreement must be ratified by May 25. Russia has done that, and the delayed ratification in Serbia, which was caused by the breakdown of the ruling coalition, is immaterial.
The new parliament will be elected on May 11 and have its first meeting in June. The leading political parties promise to ratify the deal without delay.
Once that is done, Gazprom and Srbijagas will form a joint venture and design the Serbian segment of the South Stream gas pipeline. In addition, the Russian concern will have an access to the controlling stake in the Naftna Industrija Srbije (NIS).
There is an agreement to reduce the export and tax duties levied on Russian crude, which will be supplied to two NIS refineries. That agreement may enter into force after the ratification of the energy deal, Serbian Infrastructure Minister Velimir Ilic said. In his words, Serbia expected energy prices to drop by 20%. Currently, Serbia pays $380 per 1,000 cubic meters of Russian gas and the exchange price for Urals crude.
The beginning of the implementation of the bilateral framework document will send a message to Russian large companies, which are considering investments in Serbia. These include Aeroflot – Russian Airlines, Bank of Moscow and Inter RAO UES. The latter signed a cooperation protocol with the state company Elektroprivreda in Belgrade on April 14 and voiced the readiness to invest two billion euros in the Serbian energy industry.
The Russian-Serbian agreement on oil and gas cooperation implies the laying of a 400-kilometer segment of the South Stream pipeline through Serbia, the Gazprom Neft purchase of 51% stake in the NIS company for 400 million euros without a tender, and the construction of the Banatski Dvor gas storage facility with the capacity of about 300 million cubic meters.
The February agreement between Gazprom and Srbijagas says that a joint venture will be formed before May 25 for drafting the feasibility study of the South Stream’s Serbian segment and building the line.
The segment of the South Stream gas pipeline will go from Bulgaria through Serbia to the Bosnian Serb Republic, Croatia and Italy.
Meanwhile, GazpromNeft is ready to invest 500 million euros in the modernization of the Serbian largest oil and gas company, Naftna Industrija Srbije (NIS), by 2012.
A statement to that effect was made in the protocol on general terms of the GazpromNeft acquisition of a stake in NIS. The protocol was signed in Moscow in late January between GazpromNeft CEO Alexander Dyukov and Ilic.
GazpromNeft will modernize the NIS facilities and invest no less than 500 million euros in 2008-2012, the protocol says.
The modernization is bound to enlarge the amount of refining and upgrade the refined crude quality to European standards, Dyukov said.
GazpromNeft will start the investments as soon as the sides sign the acquisition agreement. That may happen by the end of this year.
“As GazpromNeft plans to enlarge the annual production to 80 million tonnes of crude and its existent refineries are unable to handle the produce, it is buying refineries and selling facilities inside and outside Europe as a token of the company’s successful development,” he said.
The protocol says that GazpromNeft will acquire a 51% stake in NIS without a tender for 400 million euros. The company will not borrow money for buying the Serbian company, modernizing Serbian refineries and implementing other projects in that country, Gazprom CEO Alexei Miller said.
Investments in joint Serbian energy programs with Gazprom may near 1.5 billion euros. NIS annually produces one million tonnes of crude, refines seven million tonnes, and has a network of selling facilities.
Finally it looks like the Serbian economy will get decent investments and be able to rebuild after all the NATO destruction and sanctions.
Good luck, Serbia.
They’ll probably have cheaper gas than we will. And if by chance it turns out there’s oil on Serbian land, you know what they’ll probably do? DRILL!
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