Russia, Serbia sign controversial energy deal

MOSCOW (AP) -- Russia and Serbia signed a controversial energy deal Wednesday for Russian state gas monopoly Gazprom to acquire Serbia's oil monopoly in exchange for building a gas pipeline through Serbia.

The deal for Gazprom's oil arm, Gazprom Neft, to take 51 percent of Serbia's NIS - was signed in the Kremlin following the talks between Russia's President Dmitry Medvedev and his Serbian counterpart Boris Tadic.

"We are signing very important documents on Russian-Serbian energy co-operation," Medvedev said at the signing ceremony. "These documents ... will ensure energy security of our nations and other European countries."

Gazprom Neft president Alexander Dyukov said Wednesday that his company would need to seek approval of Serbia's anti-monopoly agency for the deal to buy NIS, the Interfax news agency reported. Dyukov said the Serbian agency has 130 days to consider the request, meaning the deal will be completed by May.

While the deal - extending Russia's influence in Eastern Europe - was welcomed in the Kremlin, it has divided lawmakers in Serbia, even triggering the resignation of Economy Minister Mladjan Dinkic.

Critics say Russia has given no firm guarantees that it will build the natural gas pipeline - called South Stream - by 2015. The $13 billion pipeline under the Black Sea would carry Russian natural gas to Bulgaria and Serbia before branching out to points in Western Europe.

Dinkic and other pro-Western politicians fear that Russia's takeover of Serbia's energy sector will dramatically increase Moscow's political influence in the small country.

They also say the $550 million price for NIS is too low and that the deal is a payback for Russia's support of Serbia's bid to retain its claim to the breakaway province of Kosovo, which declared independence in February.

Russian Deputy Prime Minister Igor Sechin rejected that Wednesday, saying the deal involved a "market price."

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