[...]Gazprom in Serbia: How’s that working out? | afoe | A Fistful of Euros | European Opinion[...]…

[...]Gazprom in Serbia: How’s that working out? | afoe | A Fistful of Euros | European Opinion[...]…

In 2007 NIS had a profit of approximately 9 billion RSD (US$ 170 million) and 262 billion RSD (US$ 5 billion) of revenues.

It has 13900 employees, 500 gas stations across Serbia, Bosnia and Herzegovina and Montenegro. 1600 internally serviced gas stations, 8 large terminals, 44 warehouses and air fuel pumping facility at Belgrade Nikola Tesla Airport, more then 20 hotels 3-4-5 stars, more then 50 buildings all over the country.

Pančevo Oil Refinery (yearly refines of 4.8m tones of crude oil) and Novi Sad Oil Refinery (yearly refines of 2.6m tones of crude oil) are owned by NIS and gas Refinery in Elemir, near Novi Sad.

In 2007 NIS contributed to Serbian budget with approximately US$1.2 billion.

This year revenue is 3,7 billion USD?

2 billon makes you laugh? Ok, whatever…

But since you ask, it would make it almost impossible to cut off natural gas supplies. Cutting off petroleum would be just as easy (or difficult) as it ever was. In the 1990s Serbia got most of its petroleum along the Danube, so with Austrian, Hungarian and Romanian cooperation it was easy to turn off the tap. That’s still the case today, so no change.

Of course, smugglers promptly took up the slack, helping to create the klepto-capitalist class that still dominates much of Serbia’s economy today. Presumably if Serbia ever came under sanctions again — which is about as likely as Poland being invaded by Germany, but let’s go with it — this would once again be the case.

(Trivia: for several years in the 1990s there was so much smuggling through Albania that they actually built a pipeline across the border. A little one, but still.)

Doug M.

Another data point: after the audit, Minister Dinkic originally said he didn’t want any bids lower than 2 billion euros — at that time, between $2.5 and $2.6 billion. Two major oil companies promptly announced that they “intended” to bid.

So.

– The northern branch of South Stream is small (the Italian branch will carry four or five times as much gas) and is intended to feed the smaller economies of Central Europe — Hungary, Austria, Bosnia, the Czech Republic. It’ll feed into existing pipeline networks, so it will be able to reach much of Germany too.

Pipeline politics can get very speculative. Still, you’ll notice that (1) this gives every country in the region (except Romania!) an alternative gas supply that doesn’t go through Ukraine, thereby drastically reducing Ukraine’s leverage against Russia; and (2) it removes the incentive to support Nabucco.

Doug M.

Consider on the other hand:

a) Though Ukraine pissed the EU off, today it was announced that the EBRD, EIB, and World Bank are considering about $1.4 billion in loans to Ukraine so it might pay for the nat gas in transit.

b) Yes, Hungary and Bulgaria look ready to put storage hubs as well … currently the only one near Europe is in Ukraine. The presence of one is part of what makes Ukraine’s position so critical just now. Hungary’s of course is closest to most of the big consumers.

c) I suspect if you were Serbian you would be less sanguine about Europe’s benevolent and amicable future relations than you are.

d) Just because Italy is not the end point of the branch of South Stream passing through Serbia, does not mean that it does not tie its interests to it. The growing ties between Italy’s energy community and Russia’s may be seen as important.

From the perspective of Russia, there is no need to have a branch going through Serbia at all … it works, but so would expanding the throughput of Nord Stream and expanding the South Stream pipe to Italy.

Further: The “market value” of NIS in 2007 is just slightly distorted by the run up in the price of oil, but even so, I am curious on how you arrive at $2.8 billion? That said, you may be right that they could have held out for more.