Russia's Gazprom takes control of Siberian oil monopoly

Russia added Serbia's oil monopoly to its recent string of energy acquisitions in a deal that will also allow Moscow to send more natural gas to Europe through its South Stream pipeline, it was announced Tuesday. Four days after signing a major pipeline deal with Bulgaria, the Russian state-owned energy giant Gazprom agreed to take a 51 percent stake in NIS, the Serbian state-owned oil company. The purchase was announced in a statement by the Serbian government. The deal is yet another blow to the European Union's ambitions to build its own 2,000-mile pipline to bring gas to Europe from Iran and Azerbaijan via Turkey, said analysts. The E.U.’s Nabucco pipeline project was conceived to allow Europe to reduce its dependence on Russia, which already supplies a quarter of the bloc’s natural gas. Nabucco has been dogged by logistical delays, lack of political will and disputes over financing, said the analysts.

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“As regards the deal between Russia and Serbia, we can blame the E.U. for some of this,” said Borut Grgic, an energy expert and director of the Institute for Strategic Studies in Ljubljana, Slovenia. “In all its negotiations with Serbia when dealing with the future status of Kosovo, the E.U. never brought up with Serbia the issue of energy security and how Serbia could play an important role for Europe,” he added. Gazprom has taken advantage of the disarray inside the European Union by forging ahead with its own contracts with Italy, Bulgaria, Hungary and now Serbia, as it consolidates its presence in southeastern Europe. Under terms of the provisional agreement, approved Tuesday by Serbia’s cabinet, Gazprom has offered to pay $600 million for a 51 percent stake in NIS, with pledges to turn Serbia into a hub for Russian energy. The contract is to be signed Friday in Moscow. Gazprom will also commit investments of around $725 million toward modernizing Serbia’s energy infrastructure. In addition, a spur from the South Stream pipeline under the Black Sea will be directed into Serbia, enhancing its role as a transit point for Russian gas. The Russian deal coincides with a fiercely contested presidential election that has focused on plans by the United States and the European Union to recognize the independence of the province of Kosovo despite opposition from most Serbian political parties and Russia, Serbia’s closest ally on the issue. The ultranationalist candidate, Tomislav Nikolic, won the most votes during the first round of voting last Sunday but not enough to secure outright victory. His pro-Western challenger, Boris Tadic, also opposes Kosovo’s independence but has refused to support sanctions against countries that recognize Kosovo’s statehood. The two candidates face a run-off in two weeks. Given the political context, said analysts, there is a linkage between the energy deal and the presidential elections. “If a pro-Western candidate were to win the election, the deal with Russia might not be signed,” said an E.U. energy expert who requested anonymity because of the sensitivity of the issue. “There was no need to rush through the NIS deal, but the cabinet did it Tuesday.” Intellpuke: You can read this article by New York Time