Bulgaria, Russia sign South Stream agreement18 January 2008 | 16:21 | FOCUS News Agency
Intensive talks were held between Bulgaria and Russia on the South Stream gas pipeline over the last couple of days until late yesterday evening. Bulgaria’s Council of Ministers approved the parameters on the agreement today at an extraordinary session.
Russia had insisted on a majority stake in the project till the very last moment.
A joint company would be established between Bulgaria and Russia for the stretch of the gas pipeline that would pass through the territory of Bulgaria, Bulgaria’s Prime Minister Sergey Stanishev told a special news conference after the extraordinary session of the Council of Ministers.
The two countries will hold 50% each in the company. It will be registered in Bulgaria.
Stanishev stressed that Bulgaria would have real influence in the company due to its 50% share.
Bulgargaz would be invited to participate with equitable interest in the Black Sea stretch of the project, Bulgarian Minister of Economy and Energy Petar Dimitrov stated.
“I think that the negotiations ended successfully for both parties. Bulgaria's interests have been protected,” Stanishev said.
An agreement has been reached at between Bulgaria and Russia that besides the bilateral agreements for the gas pipeline, there would also be a general agreement, which would be a multilateral and would enhance the whole project – from the Russian cost on the Black Sea to the countries from the European Union. We had persisted that we should have a concrete sizing up of the profit, which would meet Bulgarian interests, and this has also been accepted by the Russian side.
Regarding ownership, Russia had persisted to retain full ownership till the very last moment.
The most important result from the talks was Bulgaria’s access to gas, since according to all the forecasts the consumption of natural gas in Bulgaria will grow double, Minister Dimitrov says.
As far as profitability is concerned, Dimitorv stressed that Bulgargaz, though its participation, would invest about EUR 200 million, and the capitalization of these funds is expected to reach about EUR 700 million.
The investment is expected to return in 15 years, Petar Dimitorv said. This issue was discussed till late in the evening yesterday. The economy minister further stated that the volume of transit fees would be defined with the equitable interest of Bulgargaz.
Sergey Stanishev informed that the total amount of investments is expected to reach about EUR 1,4 billion. This, according to him, depends also on the route of the gas pipeline. About EUR 220 million is expected to enter the state’s budget from value added tax only with the construction of the facility. This would also open new job positions.
Bulgarian MPs Ivan Ivanov (from the Democrats for String Bulgaria – DSB) and Petar Kanev (from the Coalition for Bulgaria) started an argument in front of media representatives in the corridors of the parliament over the advantages and the losses for Bulgaria from the South Stream agreement. After both of them expressed their opinions and views on the issue, they appeared together behind the microphones.
“ A day or two ago the Minister of Foreign Affairs Ivaylo Kalfin informed that Bulgaria would insist on a majority stake in South Stream stretch that goes through the territory of Bulgaria. I am quoting him word by word and I dare state that a majority stake could be guaranteed with a percentage higher than 50%,” Ivan Ivanov said.
Petar kanev, in his turn, insisted that the talks were held for 50% stake for each of the sides.
“Let Kalfin defend himself”, Kanev responded but did not leave the argument.
Gazprom appears to be both a gas producing company and gas transporting company. According to a European directive for third states (non-EU states) – one and the same company cannot hold both the production and transit of energy products.
Gazprom would arrange that by splitting, Ivanov commented.
Kanev in his turn answered: “Mr. Ivanov, you have just left Germany and Italy without gas”.
“Germany and Italy, in contrast to Bulgaria, comply with the European directive. The national betrayal was made with the fact that Russia could not launch the South Stream pipe if it does not pass through our territory – that is why Bulgaria should hold the majority stake for the stretch that goes through its territory. I will tell you – one day Bulgaria will be forced to sell part of its 50% stake and to take a minor stake. And 50/50 or minor stake have no decisive role for something that passes through the territory of Bulgaria,” Ivanov was positive.
There was no decision about the signing of South Stream agreement till 09.30 pm yesterday. I cannot tell exactly when the Russian side had receded its demands, Petar Kanev told journalists.
He stated that yesterday evening, during the official dinner that was given for Russia’s President Vladimir Putin by Bulgaria’s Prime Minister Sergey Stanishev, the Minister of Economy and Energy Petar Dimitrov had informed that Russia accepted Bulgaria’s conditions. One of the conditions accepted by Russia was the 50/50 stake.
“The merits for that go to the whole Bulgarian negotiation team, who worked till the last moment”, Kanev stressed.
Concerning the opposition’s statements that this project would give Russia the chance to blackmail Serbia, the MP from the Coalition for Bulgaria stated: “You could understand yourself that this pipe must somehow reach Italy. The pipe, starting from Russia and going under the Black Sea, cannot stop at Sofia or Yambol. It should go somewhere. And to make that possible, it should pass through Serbia or Macedonia. Very hard talks are to follow, but it the Russian side should solve the problems”.
Petar Kanev added further that Bulgaria would have great profits from the construction of the South Stream are big, but stressed that we should not hurry since currently talks are held at the President’s office and the signing would start at 12.30 pm. He was firm that South Stream does not stultify EU’s Nabucco project.
“It does not stultify it because Nabucco is a project for which a lot of countries have already signed it and Bulgaria is also part of that project. The sooner the Nabucco pipe passes through Bulgaria, the better”, Petar Kanev stressed. According to him, South Stream would solve a huge problem for Bulgaria.
South Stream is a pipe and there is not danger from spill. A different strategy is implied there – Bulgaria ought to fight for a bigger profit, the leader of the Attack party Volen Siderov said in parliament. According to him Bulgaria should demand concessions of oil and gas fields in Russia due to the fact that the gas pipeline would go through the territory of our country. Thus, in his words, we would be able to check Russia’s loyalty.
“We, as nationalists, consider that it is Bulgaria’s interest that must be protected most not matter whether it comes to the USA, Russia, and friendly relations”, Attack’s leader added.
In his words, his party is now against Russia on this issue, just as it was against the USA regarding the deployment of US military bases.
“With all my respect to Russia, we think that it is a daughter state of Bulgaria because it was founded by Bulgarians. We have friendly feelings for it but Bulgaria’s interest must be protected from those that re ruling at the moment”, Siderov added.
According to him, however, the current Bulgarian rule is not protecting Bulgaria’s interests and is subjected to the power of Russia and the USA.
As far as Burgas-Alexandroupolis is concerned, Siderov thinks that it threatens Bulgarian interests and poses a huge danger from ecological catastrophes. That is why the local organization of the Attack party in Burgas and other parts of the country are joining today’s protests in front of the national Palace of Culture in Sofia because they want the Bulgarian government to shed more light on the pipeline project.
“We are not economically protected and Bulgaria is seen only as a territory. I think that there is a huge danger from a spill in the Black Sea, which is a closed sea, and this would lead to 10 years lack of tourism”, Volen Siderov pointed out. In his words, neither the prime Minister, nor someone else from the government have cleared out these issues to calm citizens down.
South Stream is another serious betrayal of the current Bulgarian government. Thus Bulgarian government put Bulgaria in full dependency on Russian energy supplies and Russian mega-projects, MP from DSB Ivan Ivanov said.
“Naturally, Vladimir Putin is following its imperial policy so that to be able to monopolize all the energy supplies to the European Union aiming to make political benefits later”, Ivanov commented.
According to him, Bulgaria, being an EU and NATO member state should make much more efforts than the rest to provide that oil and gas supplies for the EU are diversified.
“By South Stream Russia has penetrated into the weakest unit of the EU – unfortunately, this is our Bulgaria with this rule,” DSB MP said.
In his words, the EU partners, by including Nabucco projects as a priority, shows that they really want to diversify gas supplies for Europe by it. This was the reason why the EU funded a great deal of the researches related to Nabucco and to try to a great extent to motivate the member states through which the pipe would run.
“With its decision today for South Stream pipe Bulgaria gives Russia the chance to make undermine the Nabucco project”, Ivanov said further. According to him Bulgaria must hold a majority stake for the stretch of the pipe that goes through its territory. He was firm that Bulgaria is the key country regarding the South Stream project.
According to him the European Union would not allow the South Stream because in his words it was inadmissible that such a pipeline – of a country monopolist, could go through a member state.
I am not enchanted with the fact that the Council of Ministers had so hurriedly decided to sign the South Stream agreement. The hurried decision with the signing of this agreement is a mistake, former prime minister and present MP from the United Democratic Forces (UtDF) Filip Dimitrov said after the requiem in memory of the killed Russian journalist Anna Politikovskaya and the victims of the communist regime.
“Bulgaria is an EU and NATO member states and should defend freedom”, Filip Dimitrov said. He added that Bulgaria could have economic relations with Russia, but Putin’s regime has proved to be violating human rights, and this is inadmissible. The victims of the communist regime are 100 million a report by the Swedish MP and Vice President of PACE Goran Lindblad, cited by Lachezar Toshev from the Union of Democratic Forces (UDF), who also attended the memorial service.
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