The Srbijagas restructuring report, false alarm or serious plan from Serbian government

25. April 2013. / News Serbia Energy

Information that turned up in certain media that Ministry of Energy asks for termination of Public Company Srbijagas is tendentious and untrue. This is classical extraction from the context which does not represent things in a right way. The thing which is true is that Ministry of Energy suggested to Serbian Government transformation, not termination of Srbijagas- stated Petar Stanojevic, Deputy Minister of Energy, Environmental Development and Protection.

According to his words, this means that Srbijagas will continue to exist after this project but transport and underground gas warehouses would be separated from it.

-Separation of certain activities from Srbijagas and obligations that Serbia took over by signing international contracts from energy areas, orders for it are included in our law so transformation is not only something necessary, but also something planned- Stanojevic explains.

The reason for transformation of Srbijagas is also the bad financial situation of this company. Minus of 35 billion dinars is recorded last year and total debt amounts around 1,2 billion EUR at the moment.

-If we look closer the structure of the losses of this company, 225 million EUR is spent on the inadequate gas price i.e. import prices are higher than sale prices. Around 600 million EUR is spent on consumers’ indebtedness toward Srbijagas. The problem is that 35 percent of the market is held by domestic private company and it is not Jugorosgas- our interlocutor stresses.

-Big problem for Srbijagas is that it took over direction in many companies that are not in bad financial situation. Taking over these companies would have sense only in the case that they are fast and successfully reconstructed and privatized after a year and that they mark great business results which is not the case. Instead of that, we came to the situation that these companies transferred its losses to Srbijagas which is in debts itself and so make its position more difficult. Therefore, Ministry of Energy suggested that these non-core activities should be separate from Srbijagas. Simply, its debts need to be paid and our goal is to put this burden on back of taxpayers as little as possible- Stanojevic stresses.

He emphasizes that the first phase of Srbijagas’s transformation consider separating all dependent societies except for MSK Kikinda, which is traditionally connected to Srbijagas and HIP Petrohemija Pancevo where exist some unregulated debts between Oil Industry and Srbijagas.

Expert population is also agreed that transformation of Srbija gas is necessary.

-The Energy Law predicts separation of transport, underground warehouses and distribution from the Srbijagas’s structure. This is prescribed and it should be performed and it is completely right and in accordance with law that Ministry of Energy suggest. These activities are separated all over the world so there is no reason for exception of Serbia. When it comes to releasing from an obligation of Srbijagas to direct loser companies, we should be honest and confess that previous government put this burden to the company’s back and that the direction of Srbijagas with Dusan Bajatovic as a leader was guilty for this problem in any way- Vojislav Vuletic, Main Secretary of Serbian Gas Association, stresses.

Source; Serbia Energy/Agencies

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