ECONOMY

Russian bid stirs concern

BELGRADE (AP) – A senior Serbian official blasted his colleagues for considering a Russian offer to buy Serbia’s state oil monopoly as part of a project that also includes running a European pipeline through the Balkan country. Economy and Privatization Minister Mladjan Dinkic was quoted in Monday’s edition of Politika daily as saying the Russian offer was «humiliating» for Serbia, and criticized the rest of the government for agreeing to consider its terms. «I am not angry at the Russians; they are great negotiators,» Dinkic was quoted as saying. «I am angry at our (people)… who are downgrading Serbia’s national resources.» According to Dinkic, Russia has offered to pay -400 million ($588 million) for 51 percent of Serbia’s state-run oil monopoly, NIS – half the initial estimated value of the company. The Russians, Dinkic said, also want to buy the company without facing any other bidders, and in return the European pipeline would pass through Serbia by 2013. It remains unclear, Dinkic said, what the capacity of the pipeline would be. «I am very worried,» he told Politika. «I was told it was ‘indecent’ to ask the Russians for a market price.» He said international bidding for the company would secure a several times higher price than that offered by Moscow. There was no immediate comment from the government to Dinkic’s criticism. Earlier this week, the government said it would continue negotiating with Russia, but revealed no details of the reported offer. In a New Year message Monday, Prime Minister Vojislav Kostunica said the government was «working to reach a strategic energy agreement with Russia,» which he said would boost Serbia’s economy and provide energy supplies in future decades. He did not elaborate. Energy Minister Aleksandar Popovic has said that a gas and oil deal with Russia would provide «stability in energy supplies.» Serbian media have reported that the Russians also promised to invest an additional -500 million ($735 million) in NIS. Serbia has recently turned to Russia for political support in its bid to prevent the secession of the separatist Kosovo province, shifting politically from the West toward Moscow. Such a political shift by Belgrade allows Russia to make significant gains in controlling the Balkan energy networks, which Russia sees as a crucial corridor to providing natural gas and oil to Western Europe. NIS is one of several major state companies that are to be sold next year as part of economic transition.