Serbia: Russia reduces gas supplies to Serbia due to the 200MEUR dept

12. November 2014. / News Serbia Energy

Russian President Vladimir Putin has decided, after a visit to Serbia, to cut gas deliveries to Serbia by 28 percent. Aleksandar Antic, the Minister of Energy, should write a letter of protest to the Russian company in charge of gas supplies.

Putin made this decision dissatisfied with the outcome of his visit to Belgrade, because the Serbian Prime Minister Aleksandar Vucic refused to sign the protocol which regulates the repayment of debt for Russian gas by March next year, in the amount of approximately 200 million dollars. The Prime Minister refused to sign guarantees that Serbia must return the debt until March, because he believes that Putin’s request is inappropriate and unfair, given the fact that Russia via the Oil Industry of Serbia is already profiting in Serbia.

Unhappy with the prime minister’s refusal to sign protocol on debt return in the next four months, two days after his visit to Serbia, Putin decided to reduce the gas supply for one third of the total agreed amount. As we learn from reliable sources, as a reason for refusing to sign a binding document that Serbia should repay the debt by March next year, Vucic said to Putin that Russia was taking huge profits over NIS, allowing thus the harmful contract for the company’s sale concluded between Russia and Serbia in 2008th .

Aleksandar Vucic informed the Government of Serbia of all this in the last session. According to the writings on Danas newspaper, the Prime Minister was angry because of Putin’s demands that Serbia should repay 200 million dollars by March 2015th. PM Vucic said that he was very disappointed with Putin’s decision to cut gas deliveries to Serbia.

As we found out, Aleksandar Antic, the Minister of Energy, should write a letter of protest to the Russian company in charge of gas supplies.

As a reminder, the Ministry of Interior established a working group for the review of the sale of the Oil Industry of Serbia to the Russian company Gazprom Neft on August 11th this year. NIS was privatized in December 2008th as part of the energy agreement package with Russia, which was concluded a year earlier, at the time of Minister Vojislav Kostunica. The sale agreed then-Prime Ministers of the two countries, Mirko Cvetkovic and Dmitry Medvedev, and the Presidents Boris Tadic and Vladimir Putin signed guarantee that they will complete the job. The negotiating team appointed by the Government, led by Borislav Stefanovic, the current vice president of the Democratic Party, and member Dusan Bajatovic, Director of “Srbijagas” established the transaction details in direct negotiations.

Majority stake in NIS was sold for 400 MEUR. The price for 51 percent of the shares was contested at the time in the public, which was, as many claimed, far below the estimated value of the entire company, which was about two billion EUR. As one of the reasons for the low cost NIS privatization the then leadership also mentioned the Russia supporting policy which Serbia had in relation to the alleged preservation of the territorial integrity and sovereignty of Kosovo.

Less Russian gas also to BiH

The Russian Federation has reduced, two weeks ago, the gas delivery to Bosnia and Herzegovina by 35 percent. As stated “Energoinvest” s. c. Sarajevo as an importer of natural gas from Russia, “Gazprom Export” reduced gas supplies because of larger quantities storage in underground storage facilities in the Russian Federation in order to ensure reliable delivery across the territory of Ukraine, according to European consumers during the winter season. In the statement says that Russian gas supplies fell by 35 percent from contracted volumes and adds to that “BH Gas” tries to find a solution to ensure normal gas supply in the BiH Federation. From “BH Gas” invite the Government institutions in the Federation of BiH, as the founder of the company, and the state to work on the construction of natural gas storage facilities and to provide other routes and sources of gas supply, in addition to Russia.

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