Alarm at Gazprom’s Serbia move

Gazprom’s offer to take control of Serbia’s state-owned petroleum monopoly has divided the Serbian government and sounded alarm bells about the cost of Moscow’s political support.

The Russian state-run gas group aims to pay €400m ($590m, £290m) for 51 per cent of Petroleum Industry of Serbia, or NIS, without facing rival bidders.

The terms of the offer, which the government has confirmed is under negotiation, would be sweetened by Gazprom’s promise of a branch of the South Stream gas pipeline running through Serbia, ensuring lucrative transport fees and lower gas prices for the country for decades to come. But the branch’s limited capacity of 10bn cubic metres would just cover local needs, while larger-scale gas shipments to Hungary and western Europe – which earn substantial revenues – would not go via Serbia, critics said.

The Russians have also promised to boost Serbian “energy stability” by activating a gas storage site. In return, Gazprom, its subsidiary Gazpromneft, and NIS would retain a monopoly on refining and a protective ban on private-sector oil and gas imports for five years.

NIS holds nearly 60 per cent domestic market share for natural gas, and more for heating oil, petrol and diesel. It is to be privatised with an initial 25 per cent stake to the winner of a bidding process involving Russia’s Lukoil and several central European oil companies early next year, after repeated delays resulting from Serbian elections.

It comes as no surprise that Russia’s defense of Serbia has a price tag.

Pay off the Russians or allow NATO to support the Muslims rape of Kosovo.

Hell of a choice Clinton’s true master has given the Christian Serbs.

It's just money. It comes and goes... The Russians are only interested in money, whereas the West has an axe to grind and is blatantly anti-Serb and has been for a long time (with some honourable exceptions).

However, NIS is probably the most important asset Serbia has, or will ever have. I'm no economist but if the NIS is worth $2.9 billion (as per Finance Minister Dinkich) and has a fantastic potential for expanding and thus increasing its market value and making both the state/taxpayers and citizen-shareholders richer, then the Russian offer ought to be rejected out of hand. There's a plan to give each and every Serbian citizen (18 and over) a stake in the company, which would amount to 1000+ euros per citizen (NIS employees would average about 4,000 euros in windfall).

On the other hand, the West has had plenty of chances of striking similar deals with Belgrade (see U.S. Steel-Sartid for a rare example). They chose the path of aggression, bullying and sabre-rattling (not to mention stealing 15% of Serbia's sovereign territory for the benefit of an irredentist minority with ties to Al-Qaida!).

The EUrocrats are the worst. They're berating Serbia over its close ties with Russia, while simultaneously kissing the Kremlin's ass over energy supplies.

NATO caused some $60B damage in Serbia in 1999 and has no intention to pay the damage. That's why they lie through the teeth all these years.

At conservative 3% annual return,Serbia's loss is $2B lost each year on interest alone plus principal.

NIS is a petty cash compared to that.

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