Serbia Ratifies Energy Pact Giving Oil Firm to Gazprom

BELGRADE -- Serbia's parliament ratified an energy pact with Russia on Tuesday that gives Gazprom control over its oil monopoly in return for Serbia's inclusion in the South Stream gas pipeline project.

In the 250-seat parliament, 214 deputies voted for the pact signed in January 2007, while 22 were against it.

The pact was a rare instance in which both nationalist parties and the pro-Western ruling coalition easily agreed.

Under the deal, Gazprom's oil arm, Gazprom Neft, will get a 51 percent stake in NIS, the last of the state-owned oil firms in the Balkans to be sold.

Some Serbian politicians had said the deal should be renegotiated, as the purchase price of 400 million euros ($565 million) was "insulting."

Gazprom Neft pledged to invest another 500 million euros in modernizing the company as part of the deal.

Some analysts say the deal was politically motivated as a reward for Russia's support of Serbia over the issue of Kosovo, the former province that seceded in February with Western backing.

But those who voted for the agreement say Serbia will benefit from being included in Gazprom's South Stream gas pipeline project to take Russian gas to Europe under the Black Sea.

Belgrade, which gets 90 percent of its gas from Russia, sees the South Stream branch into Serbia as a way to secure cheaper power and faster economic growth.

If other Balkan countries join in to access the gas, Serbia would earn transit fees.

The consultancy group Deloitte said Saturday that the market value of NIS was 2.2 billion euros. The evaluation was based on the assumption that NIS keeps a monopoly until 2012.

NIS was given a refining monopoly until 2010 to allow it to recover from the 1999 NATO bombing that hit its main refinery.