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Last Updated: Thursday, 10 January 2008, 16:43 GMT
EU warns Serbs on Russia gas deal
By Paul Kirby
EU reporter, BBC News

NIS-owned installation (courtesy, NIS archive)
Serbia is being offered a secure gas supply in return for its monopoly
The European Commission has voiced concern about the controversial takeover of Serbia's oil monopoly by the Russian energy giant Gazprom.

Russia's state-run gas company has offered 400m euros (300m) for a majority stake in NIS and Belgrade could agree to the deal this month.

But some estimates suggest NIS's value is far higher and a number of European companies have expressed interest.

The commission says the sale of Gazprom should be open and transparent.

Spokeswoman Krisztina Nagy said: "The commission hopes that the sale of an important asset such as the Serbian oil company will be open and driven by objective, commercial and economic interests."

EU membership bid

The sale of NIS has become caught up in Serbia's progress towards joining the European Union, which could also move forward this month.

We simply have no alternatives - Gazprom's proposal includes security of supply and this is very important to Serbia
Dejan Stojadinovic
Serbian energy ministry

The EU has told Belgrade that a pre-entry agreement, initialled in November 2007, could be signed if Serbia co-operates more fully with the UN war crimes tribunal in The Hague.

But Serbian media reports suggest Prime Minister Vojislav Kostunica will insist on the Gazprom deal going through as a condition for signing.

He has already warned the EU that Belgrade will halt membership talks if Brussels goes ahead with its plans for a civilian mission to Kosovo, whose leaders want independence from Serbia.

'Political motives'

Some analysts have said the NIS sell-off to Moscow might be politically motivated.

In return for Serbia's main oil company, they suggest that Russia would provide support on Kosovo and Belgrade would move away from the EU.

The commission will not speculate on the reason for the deal, although it is keen to stress that Belgrade should be prompted by "objective" interests.

The Serbian energy and mining ministry says the motivation is not political, but based purely on a need for a secure supply of gas.

A dispute between Gazprom and Ukraine in January 2006 led to an interruption in gas supplies to Western and Central Europe, including Serbia.

That crisis highlighted energy security as a pressing issue across Europe, and for Serbia in particular, because it relies on Russia for 91% of its gas.

The EU depends on Gazprom for a quarter of member states' supplies.

Pipeline offer

For Belgrade, the most tempting aspect of the Gazprom offer is the prospect of a reliable source of gas.

Unlike its European competitors, Gazprom has linked its offer for NIS to an extension of its South Stream pipeline into Serbia.

A ministry spokesman, Dejan Stojadinovic, said Belgrade was acting out of necessity.

"We simply have no alternatives," he said.

"Gazprom's proposal includes security of supply and this is very important to Serbia. We have no possible supply from Algeria or Norway, which are supply points for the rest of Europe."

Another Serbian official said the deal with Gazprom could be signed on 28 January, but the energy ministry insisted there was no deadline.



SEE ALSO
EU presidency wants Serbia deal
08 Jan 08 |  Europe
Country profile: Serbia
04 Dec 07 |  Country profiles
New Russia-Ukraine gas row fears
28 Nov 07 |  Business
Ukraine settles Russian gas row
08 Oct 07 |  Business

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