Russians to take over losses of "Petroleum Industry of Serbia" from the end of year 2007 - Serbian company's debt amounts to 250m USD

Serbian Minister of Energy, Petar Škundrić, said that the energy agreement anticipated sale of 51% of NIS for 400m EUR and that the Russian partner had accepted to repay the losses of the company prior to December 31st, 2007.

He pointed out at the Industrial Board of the Parliament of Serbia that Russian had offered 500m EUR worth of investments and if they were realized as planned, the Petroleum Industry of Serbia would be worth twice as much in the following period.

According to some earlier estimates, the debts of Serbian petroleum company at the end of the last year amounted to about 250m USD.

Serbian Minister of Energy said that the agreement had been reached with Russian on development of Južni Tok and Banatski Dvor, but he said that more time was needed for the details regarding the sale of 51% of stocks of NIS to be determined. He also pointed out that the final decision about that sale would be made by the Government of Serbia.

The Minister added that Serbian side had asked for the concrete price for "19% of stocks that belong to the citizens fo Serbia", but Russian side was of the opinion that the price of those stocks should be formed on the stock exchange.

Škundrić said that Serbian side had stepped outside the legal framework of the agreement with the requests and added that the negotiations with Russians about energy arrangement were very complex talks that had not been finished yet.

According to his words, all negotiators from Serbia behave very responsibly and they intend to achieve the best results that both sides find acceptable.

He added that Russians promised to finish the feasibility study for development of gas pipeline "Južni Tok" through Serbia prior to the third quarter of year 2009, and that the whole project should be completed prior to year 2015.

NIS a.d. Novi Sad

Narodna skupština Republike Srbije

Vlada Republike Srbije

Gazprom Moscow

Petar Škundrić

Južni Tok