Post by Beach Police on Jan 2, 2008 13:20:00 GMT -5
Gazprom may buy majority stake in Serbia's NIS outside tender
Wednesday, January 2, 2008 01:15:00 PM
Gazprom, the Russian state-controlled gas giant, is willing to pay EUR 400-500 million for a 51% stake in Serbias petroleum company Naftna Industrija Srbije (NIS), different sources reported, adding that the company would pump an additional EUR 500 million into the company in 2008-2012.
The offer has divided the Serbian government and sounded alarm bells about the cost of Moscow's political support. Hungary's oil and gas group MOL and its Austrian rival OMV are also in the tender invited for NIS that operates the largest filling station network and two refineries in Serbia.
Details that have so far surfaced about the deal hint that Russia may devour Serbia's entire oil and gas market for the next five years.
Moscow has made the deal even more appealing by promising Serbia that it will be integrated into Russia's South Stream gas pipeline construction project, which will link Russia to the European Union via the Black Sea.
This branch of the South Stream would “ensure lucrative transport fees and lower gas prices for Serbia for decades to come", the Financial Times noted. It cited critics saying, however, that the branch's limited capacity of 10 billion 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".
The Serbian government confirmed that negotiations were underway about the terms of the offer, with PM Vojislav Kostunica saying in his New Year address on Monday that the cabinet was “working to reach a strategic energy agreement with Russia."
Serbian news agency Tanjug reported on Tuesday, citing government sources, that “Russia and Serbia may sign an inter-governmental agreement on co-operation in oil and gas sphere in Sofia January 18 in the format of ratification of other documents pertaining to the South Stream gas pipeline".
Moscow also pledged to enhance Serbian "energy stability" by activating a gas storage site, the FT said, adding that 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".
Serbia's Minister of Economic Affairs, Mladjan Dinkic, publicly denounced Gazprom's offer (which is less than half of NIS's USD 1.2 bn book value), labelling it "humiliating", despite the promised EUR 500 m investment by 2012. He was consequently asked to step down as member of a team set up to negotiate the deal on behalf of the government.
Meanwhile, a few members of the government, including the nationalist-leaning PM, Vojislav Kostunica, “would welcome stronger economic ties to Russia", the FT said, noting that Moscow was Serbia's main ally in the dispute over the future of Kosovo, the ethnic Albanian-dominated breakaway province demanding independence.
But others would be reluctant to let a valuable state asset go except for the best possible price.
President Boris Tadiæ said on Monday that Serbia “cannot sell NIS for nothing, nor can the company be handed over to any partner for political reasons".
Daily Dnevnik cited him as saying that the talks were “not simple", but they offered “great opportunities".
He added that if the negotiations were to be concluded successfully, “Gazprom could become a strategic partner for NIS", otherwise Serbia would need to look for a partner elsewhere.
Tadiæ also said he would not support the deal unless Russia does provide firm guarantees “of a stable gas supply in the next 30 years," and unless the interests of NIS, its employees, and the country's public finances “are all honoured".
NIS holds about 60% domestic market share for natural gas, and more for heating oil, petrol and diesel. It is to be privatised with an initial 25% stake to the winner of a bidding process early this year, after repeated delays resulting from Serbian elections.
“By avoiding the tender process, the Russians could prevent higher bids from central European oil companies such as Hungary's MOL or Austria's OMV, both of which have expressed interest in NIS," the FT said.
According to press reports a few weeks ago, Serbia hoped to receive an offer of USD 300 m for the package and a promise to invest further USD 250 m. The price per equity offered by Gazprom is smaller than this, but its investment would be bigger.
MOL is investing three times as much as the proposed investment in NIS in INA, a comparable refining company in neighbouring Croatia, after buying a 25% stake for USD 500 m in 2003.
www.portfolio.hu/en/cikkek.tdp?cCheck=1&k=2&i=13789
Wednesday, January 2, 2008 01:15:00 PM
Gazprom, the Russian state-controlled gas giant, is willing to pay EUR 400-500 million for a 51% stake in Serbias petroleum company Naftna Industrija Srbije (NIS), different sources reported, adding that the company would pump an additional EUR 500 million into the company in 2008-2012.
The offer has divided the Serbian government and sounded alarm bells about the cost of Moscow's political support. Hungary's oil and gas group MOL and its Austrian rival OMV are also in the tender invited for NIS that operates the largest filling station network and two refineries in Serbia.
Details that have so far surfaced about the deal hint that Russia may devour Serbia's entire oil and gas market for the next five years.
Moscow has made the deal even more appealing by promising Serbia that it will be integrated into Russia's South Stream gas pipeline construction project, which will link Russia to the European Union via the Black Sea.
This branch of the South Stream would “ensure lucrative transport fees and lower gas prices for Serbia for decades to come", the Financial Times noted. It cited critics saying, however, that the branch's limited capacity of 10 billion 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".
The Serbian government confirmed that negotiations were underway about the terms of the offer, with PM Vojislav Kostunica saying in his New Year address on Monday that the cabinet was “working to reach a strategic energy agreement with Russia."
Serbian news agency Tanjug reported on Tuesday, citing government sources, that “Russia and Serbia may sign an inter-governmental agreement on co-operation in oil and gas sphere in Sofia January 18 in the format of ratification of other documents pertaining to the South Stream gas pipeline".
Moscow also pledged to enhance Serbian "energy stability" by activating a gas storage site, the FT said, adding that 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".
Serbia's Minister of Economic Affairs, Mladjan Dinkic, publicly denounced Gazprom's offer (which is less than half of NIS's USD 1.2 bn book value), labelling it "humiliating", despite the promised EUR 500 m investment by 2012. He was consequently asked to step down as member of a team set up to negotiate the deal on behalf of the government.
Meanwhile, a few members of the government, including the nationalist-leaning PM, Vojislav Kostunica, “would welcome stronger economic ties to Russia", the FT said, noting that Moscow was Serbia's main ally in the dispute over the future of Kosovo, the ethnic Albanian-dominated breakaway province demanding independence.
But others would be reluctant to let a valuable state asset go except for the best possible price.
President Boris Tadiæ said on Monday that Serbia “cannot sell NIS for nothing, nor can the company be handed over to any partner for political reasons".
Daily Dnevnik cited him as saying that the talks were “not simple", but they offered “great opportunities".
He added that if the negotiations were to be concluded successfully, “Gazprom could become a strategic partner for NIS", otherwise Serbia would need to look for a partner elsewhere.
Tadiæ also said he would not support the deal unless Russia does provide firm guarantees “of a stable gas supply in the next 30 years," and unless the interests of NIS, its employees, and the country's public finances “are all honoured".
NIS holds about 60% domestic market share for natural gas, and more for heating oil, petrol and diesel. It is to be privatised with an initial 25% stake to the winner of a bidding process early this year, after repeated delays resulting from Serbian elections.
“By avoiding the tender process, the Russians could prevent higher bids from central European oil companies such as Hungary's MOL or Austria's OMV, both of which have expressed interest in NIS," the FT said.
According to press reports a few weeks ago, Serbia hoped to receive an offer of USD 300 m for the package and a promise to invest further USD 250 m. The price per equity offered by Gazprom is smaller than this, but its investment would be bigger.
MOL is investing three times as much as the proposed investment in NIS in INA, a comparable refining company in neighbouring Croatia, after buying a 25% stake for USD 500 m in 2003.
www.portfolio.hu/en/cikkek.tdp?cCheck=1&k=2&i=13789