Serbian President Boris Tadic (right) has assured Russian presidential representative for the Central Federal District Georgy Poltavchenko (left) that the energy agreement between the two countries will be signed.
Photo: AP
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Serbia Lets the Gas In
// Energy agreement ready for signing in Moscow
Russia and Serbia agree on natural gas
Russia and Serbia did not sign an agreement on the purchase of the Serbian oil heavyweight NIS by Gazprom last week as expected. However, the sides succeeded, perhaps, in attaining something even greater at their negotiations in Belgrade. A package of energy agreements was agreed upon that, in addition to the NIS deal, includes the construction of a line of the Southern Stream gas pipeline into Serbia and an underground gas reservoir. “Everything has been agreed on and the political decision has been made,” a Serbian source close to the negotiations told Kommersant, which has also discovered that the agreements will be signed on December 17 or 18 in Moscow during the visit of Serbian President Boris Tadic.
A Word Is Not a Guarantee
Information emerged a week ago that an agreement on the purchase of 51 percent of the shares in the giant Serbian oil company NIS would be signed in Belgrade on December 5. An impressive Russian delegation arrived in the Serbian capital on that day for the opening of the Russian-Serbian business dialog. The delegation was headed by Russian presidential representative for the Central Federal District Georgy Poltavchenko and included Gazprom head Alexey Miller. The Serbian side consisted of practically the entirety of the country’s upper high leadership, including President Boris Tadic, Prime Minister Mirko Cvetkovic and Foreign Minister Vuk Jeremic.
A few days before the scheduled signing, alarming signals began to come from Belgrade. Information appeared in the Serbian media that the Russian draft agreement applied to the purchase of NIS alone (which Belgrade was adamantly opposed to) and that it “shocked the government in Serbia.” That leak was officially confirmed. Serbian Economic Minister Mladan Dinkic stated openly that, since Gazprom will complete the equipping of South Stream only in 2010, that was when they would talk about NIS. “No pipeline and no NIS,” he warned. Cvetkovic was also skeptical. “There are no guarantees that the agreement will be signed,” he said.
After that, it was clear that the seemingly done deal could become undone and not all the sticking points had been cleared up by the Russian-Serbian intergovernmental commission that met in Moscow in late November. (That was supposed to be the concluding step in the preparation of the energy agreements.) Serbian First Deputy Prime Minister Ivic Dacic, who headed his country’s delegation, was clear about its goals: “to receive firm guarantees that the energy agreement with Russia will be concluded and implemented in a package that includes the sale of NIS and the construction of a line of South Stream and an underground reservoir at Banatski-Dvor.”
Negotiations with the Russian cochairman of the commission Sergey Shoigu were not reassuring to the Serbs. “We are asking for written guarantees that the gas pipeline will be build by the deadline, and in response we are hearing ‘I give my word,’” one of the Serbians involved in the negotiations told Kommersant. “That is not a guarantee.”
Then the Serbian delegation met with Deputy Prime Minister Igor Sechin, who repeated that “the energy agreement will be fully implemented,” that Gazprom would implement all three projects and that would be specified in the protocol of the commission agenda. But that did not exhaust the Serbs’ concerns either.
Kommersant has obtained a copy of the working protocol with amendments added by hand by members of the delegations. It can be seen from it that the Russian side struck out all mentions of a guarantee. In particular, the phrase “a protocol will be signed by which Gazprom will guarantee all three projects of the agreement” was marked out.
Nonetheless, the protocol contains the first mention of the date (even approximately) of the implementation of the South Stream project: December 31, 2015. In addition, a schedule was specified for the implementation of the projects for the construction of the pipeline and modernization of the gas reservoir at Banatski Dvor. All of that is evidence of real progress in the preparation of the energy agreement and the nearing of the signing of an agreement on the purchase of NIS by Gazprom.
Avoid Losing an Ally
The skeptical statements by Serbian politicians just before the expected signing of the deal shows once again that there are influential opponents of the energy agreement with Russia in Serbia. And in the highest places.
Dinkic is named as the first among them. First he claimed that Serbia’s largest oil company was being almost given away (Gazprom Neft is to pay ˆ400 million for 51 percent of NIS and enter into obligations to invest another ˆ500 million). Dinkic claimed, citing auditors hired by the Serbian government, that NIS is worth no less than ˆ2.2 billion. Recently the Serbian Economics Minister has been insisting on guarantees of the building of a Serbian line of South Stream, threatening to block the sale of NIS to Gazprom if they are absent.
Before the Russian delegation arrived in Belgrade, Dacic rather severely criticized the opponents of the agreement with Russia. He told them to keep in mind that “Serbia could lose a major political ally by advancing new conditions.” He warned, “It has to be made clear that someone could question the agreement in order to protect Serbian interests, or to revise political relations with Russia, or maybe someone simply wants to sell NIS to a different company.”
Thus it became clear that the sale of NIS was a political matter. That was confirmed at the negotiations on December 5. The key agreements were reached during a personal meeting between Tadic and Miller that preceded negotiations broader talks.
Kommersant sources close to the negotiations say that both Millar and Tadic were explicit from the very start about the issues they were willing to compromise on and those that were nonnegotiable. After that, the agreement took shape rather quickly.
“The agreements on the construction of the South Stream pipeline and the reservoir at Banatski Dvor are 100-percent ready for signing. There are several technical questions remaining about NIS, but there is decisiveness on both sides to settle them quickly,” Miller reported when he left the Serbian president’s office, clearly in an upbeat mood. He refused to talk about the disputed “details.” Serbian sources say they are mainly the nature and volume of Russian investment in NIS. The Serbian side wants to increase it to ˆ700 million, which Gazprom will not agree to. Gazprom would prefer to make investments in the form of loans to NIS. Another issue is whether NIS will retain some of the benefits enjoyed by Serbian national companies after it is transferred to Gazprom.
Several knowledgeable sources told Kommersant, however, that “the remaining unsettled details cannot threaten the conclusion of the agreement in any way.” One source said that “All key moments have been agreed upon and the political decision has been made.” The source said that Serbia has received the Russian guarantees of the implementation of all three projects necessary for it. In addition, the volume of natural gas Gazprom will deliver to Serbia through the Serbian branch of the pipeline will be enough not only for Serbian needs, but for delivery to the Serbian Republic, where a distribution center for all of Bosnia may be established in time. That is important to Belgrade.
Kommersant has learned that Serbian President Boris Tadic will spend December 17 and 18 in Moscow for meetings with Russian President Dmitry Medvedev. The three energy agreements between Russia and Serbia, which Tadic has termed “strategic,” will be signed at that time.
Gennady Sysoev, Belgrade – Moscow
All the Article in Russian as of Dec. 08, 2008
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