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The Government of the Republic of Serbia

In the service of citizens

Energy agreement with Russia important for stable energy supply in Serbia

Belgrade, 22 January 2008

Serbian Prime Minister Vojislav Kostunica said today that the draft agreement between Serbia and Russia on cooperation in the oil and gas industries is important for a stable energy supply in Serbia and will boost employment.

Vojislav Kostunica

Kostunica said at a press conference on the agreement, adopted by the Serbian government today, that the agreement will be signed on January 25 in Moscow. He added that without it Serbia would become isolated when energy is in question.

He stressed that the Serbian economy and people will benefit from the agreement and that the building industry will indirectly gain benefit as well.

He said that this agreement provides Serbia with a stable and secure gas supply, and the gas pipeline which according to it, should be constructed through Serbia will be of major transit importance , making the country an important factor in energy and a regional leader in the energy sector.

The text of the agreement will be made public after it is signed in Moscow, said Kostunica. He added that negotiations on the agreement are still underway and its final version will be harmonised and signed on January 25 in Moscow.

According to Kostunica, the agreement is a framework and it is important that other associated agreements accompany it, such as the one between Gazprom and Srbijagas.

Kostunica stressed that it is important that a consensus prevailed within the Serbian government on this issue.

He said that Russian support for Serbia’s stance on the issue of the future status of Kosovo-Metohija and the interstate agreement on cooperation in energy are two separate matters.

According to Kostunica, Russia’s motives and reasons for being in favour of upholding international law should not be made subject to speculation.

Commenting on the possibility of signing the Stabilisation and Association Agreement (SAA), Kostunica stressed that the agreement initialed by Serbia guarantees its territorial integrity and sovereignty just as it does so for any another EU country.

He recalled that at the summit held on December 14, the EU discussed the possibility of signing the SAA with Serbia, as well as sending a mission to Kosovo-Metohija.

The decision to send a mission would violate and annul the agreement and this is the fact on which Serbia has based its arguments, explained Kostunica. He reiterated that sending any new mission to Kosovo-Metohija to replace the existing one, would be a violation of the UN Charter and Security Council Resolution 1244, and a first step towards implementing the otherwise rejected plan which Ahtisaari presented.

Aleksandar Popovic

Minister of Energy and Mining Aleksandar Popovic said that the energy agreement between Serbia and Russia will definitely contribute to an increase of foreign direct investment in Serbia. Popovic said that Serbia’s energy security will be strengthened with this agreement as it will provide larger quantities of gas for the country.

According to Popovic, implementation of the agreement will also reduce pressure on the country’s energy system.

He said that according to rough estimates, the investment value of the gas pipe line through Serbia and the underground gas storage facility in Banatski Dvor will amount to nearly €1.5 billion. The Minister said that the final price for NIS will be agreed upon during upcoming talks before the signing of the agreement in Moscow on January 25. Popovic recalled that the initial offer made by the Russians was nearly €400 million for 51% of NIS stocks with an additional €500 million in investments.