The signing of the contract on the establishment of a joint Serbian-Hungarian gas trading company represents only a segment of Budapest’s „offensive“ on the Serbian energy market, and concretely it may mean that the otherwise very lucrative segment of trade in „blue energy“ Belgrade will leave to the Hungarian energy company MVM, says Danas dobro informed source. Something like that is definitely represented by the „back door“ entry of foreign capital into the state gas sector of Serbia.
As a reminder, on Tuesday in Palić, as part of the first session of the Strategic Council for Cooperation between Serbia and Hungary, a contract was signed on the establishment of a joint Serbian-Hungarian gas trading company, Serbhungas. No other details regarding that engagement have been announced except that it is a company for “joint performance on the Serbian market when it comes to gas trade”.
At the closing of the winter 30th Kopaonik Business Forum, the Prime Minister of Serbia, Ana Brnabić, stated that the reform of the public sector cannot be stopped and that, in addition to Elektroprivreda Srbije, Srbijagas is the first company that will face this process. She then pointed out that the action plan for the separation of the gas sector, which is awaiting full liberalization and the “opening of Horgoš”, was adopted. In practice, this means that the monopoly that Srbijagas has when it comes to supplying consumers with “blue energy” in Serbia will be terminated, and that company will face competition after the separation of activities within the gas sector.
The separation of the gas sector, which Prime Minister Brnabić spoke about, means that the activities that are currently united within the public company “Srbijagas” are divided into separate units, such as, for example, trade, transport and distribution of “blue energy”.
By the way, “Srbijagas” is not the only gas distributor in Serbia because there are a large number of companies that deal with it at the local level. Transport should be formed as a separate company owned by the state, through the infrastructure of which the supply of gas would be carried out, owned by wholesalers who want to sell it to distributors. The wholesale gas trade would be separated as a third entity, and that segment could be taken over by Serbhungas. Given that the retail price of gas in Serbia is still a social category, it is not worthwhile for foreign traders to enter the retail segment, given the low prices that would not allow them to generate the desired amount of profit. Accordingly, it is quite clear that the joint SerbianHungarian company would deal with the purchase and sale of gas in bulk.
At the moment, information about the formation of a joint enterprise for gas trade is very scarce, so it is difficult to say whether the gas sector of Serbia would have any benefits from such an association. A logical question is being asked, to which there is no answer yet, who would manage the company, how the profit would be shared, as well as what quantities of gas and under what conditions Srbijagas would have the right of access. Would he pay it to the Hungarian Serbhungas: lucrative project or being under monopoly partner and if the answer is yes, at what price – says our interlocutor.
He adds that the signing of the contract on the establishment of a joint Serbian-Hungarian gas trading company represents a kind of compensation from Belgrade to Budapest, considering that, at least at this moment, the government in Serbia has not approved the allocation of 11 hydroelectric power plants owned by EPS to a joint a Serbian-Hungarian company in which the company MVM would have management rights. Our interlocutor points out that Hungary wants expansion in the energy market of Serbia, so MVM once came into the ownership of the Serbian companies Energotehnika – Južna Bačka and Elektromontaza, as if the Memorandum of Understanding on the construction of the oil pipeline Hungary – Serbia was signed in Palić. Belgrade also leases capacities in Hungarian gas storage facilities, while our northern neighbor is supplied with “blue energy” by the “Balkan Stream” from the direction of Bulgaria and Turkey, which crosses Serbia. Energy expert Velimir Gavrilović tells Danas that it is problematic that very little information has been released about the contract for the creation of a joint venture for gas trade and that there are a lot of unknowns, even though it shouldn’t be like that. It is a contract about the content of which the public should be informed in detail. However, this is not the case and it is shrouded in secrecy. What is known is that it is a gas trading company in the territory of Serbia.
Why is that company not simultaneously registered for gas trade on the territory of Hungary, so that the Serbian side can earn from it just as the Hungarian side will earn from the sale of gas in Serbia? Also, why form a gas trading company when Srbijagas is already doing that business in our country? What does that gain? And finally, if the goal of reforms in the gas sector is to open the market, it would be logical to give a chance to private companies that trade gas in order to create the best price from the competition, and instead go for the creation of a joint venture of two state companies – says our interlocutor.
Energy expert Miodrag Kapor said that contrary to the aspirations of the European Union to free itself from dependence on Russian gas and to trade this energy by forming joint offers of European companies for its purchase, in order to obtain the most favourable prices, Hungary and Serbia by creating the joint venture is aiming for the exact opposite, which is to prolong dependence on Moscow in the area of gas supply and not to act jointly with other energy companies on the “Old Continent” when it comes to the purchase of “blue energy”. The cooperation of Orbán’s Hungary with the so-called Serbian world is at work, the good relations of Budapest with the Republic of Srpska should also be taken into account, which implies the penetration of energy companies from that country into the Serbian market and, at the same time, Budapest’s lobbying for Serbia’s interests in the European Union and NATO.
Consequently, the signing of the contract on the formation of a joint enterprise for gas trade between Serbia and Hungary can be viewed from a political angle Serbhungas: lucrative project or being under monopoly with every right – emphasized Kapor.
The General Secretary of the Serbian Gas Association, Vojislav Vuletić, tells Danas that it is the European Union that insists on the division of the gas sector in Serbia, that is, the separation of activities within Srbijagas. Accordingly, a joint venture between Bzudimpešta and Belgrade could deal with gas trade.
In this specific case, this means that both parties, both Hungarian and Serbian, would benefit from it. In this way, the business interests of Srbijagas would not be threatened, but on the contrary, they would be significantly improved. It is certainly a good move – emphasizes Vuletić. He adds that the gas that could be counted on would be mainly Russian, but there are possibilities that certain quantities of gas could be obtained from Azerbaijan.