ALTHOUGH Tuesday was slated as the date when Bulgaria, Greece and Russia were to sign a memorandum on the start of construction of a vital fuel artery in the Balkans, a personal reason postponed the motion until a later date.
Russian Deputy Energy Minister Vladimir Stanev, the person authorised to sign the document on behalf of Russia, suffered a loss of a bereavement asked for a postponement for personal reasons.
Late last week, Bulgaria authorised Hassan Hassan, Acting Minister of Regional Development and Public Works, to seal the accord on the country's behalf.
While the signing was delayed, work on setting up the Bulgarian Operation Company (BOP) continues at full speed. At a special meeting at the Ministry of Regional Development and Public Works, Hassan and representatives from all eligible candidates held six-hour talks to decide on the stake allocation and lay the legal groundwork of the future consortium.
Contrary to expectations, Hassan told journalists after the meeting that the state would retain a golden stake to oversee the implementation of the project and, notably, the quality of the materials used. Through its participation, the company would also help in the seizure of land, located on the route of the future facility. Following the construction, it would monitor the environmental, transit and port charges that would be later raised.
As already agreed, the holding is expected to comprise the nine construction and engineering companies that passed the eligibility test of the Bulgarian Ministry of Regional Development and Public Works along with two additions, which joined in after the approval of both the ministry and the remaining stakeholders-to-be. Glavbol-garstroy, Gazstroymontazh, LUK-oil Bulgaria, Magnum 07, Holi-con, Monolit 3, Interneftigaz-montazhi, Chimremontstroy and Minstroy Holding will have a stake in the holding. The new entrants are Kontrolnozavaruchni ustrojstva and Trans-stroy Bourgas.
The meeting also found that the overall stake participation declared by the parties in the future consortium extended 2.5 times the value of the Bulgarian stake of 227 million euro. Regardless that most were supported by state guarantees, this circumstance predicates a new reshuffle of the stake positions. Upon failure to do so, the state will be allowed to act as an arbiter, according to meeting participants. This, along with the final draft of the consortium's rules and regulations, has to be ready by January 15. According to preliminary information circulated by the head of Glavbolgarstroy, Simeon Peshov and later confirmed by Hassan, LUKoil would enjoy the highest stake.
The reasoning behind it is that the move would pay tribute to LUKoil is rising investment in the region. Only in the past year, LUKoil tripled its investment in SouthEast Europe to reach 192 million euro and is the major contributor to the budget, accounting for a quarter of budget revenues, LUKoil officials said last week at an international conference entitled Transit and Supply of Oil and Natural Gas in Central and Eastern Europe and the Balkans.
The draft document at the meeting said that the company could at any moment cover all expenses on the project, including preliminary survey and extraordinary costs. All contractual parties decided that the company would have an initial capital of 500 000 euro, 350 000 of which would be allotted for feasibility studies.
At the meeting, Hassan demanded that the companies prepare a draft budget on the establishment of the BOP, as well as a draft document preparing BOP to join the intra-Balkan company that would merge the operations of the consortiums of all three partnering countries.
At the international conference, which gathered energy sector players from the country and abroad along with the executive companies, Project Manager of the DEP Thraki from Greece, Christos Dimas, said that the Bourgas - Alexandroupolis oil pipeline was the most economically feasible project on the Balkans.
The statement emerged during a debate aimed to find out which of the two competing oil transmission projects, the Bourgas - Alexandroupolis and the Bourgas - Vljora oil pipelines, was the more economically viable and likely to yield a better return on investment and on the opportunities for the two to co-exist as the Government was yet to decide which of the two projects to prioritise.
Dimas voiced a general opinion by saying that the last option would unnecessarily cut transit fees to below $5 a ton and that in all cases there would be just one pipeline.
"Bourgas-Vljora looks more favourable to Bulgaria, because most of the 900km long pipeline is situated in Bulgarian territory and the state would profit from higher transit fees," said Deputy Prime Minister and Economy Minister Nikolai Vassilev.
Ted Ferguson of US power company AMBO, upheld his point of view. "Should the Government prefer the Bourgas-Vljora oil pipeline, Bulgaria would put itself on better competitive grounds as this pipeline would become the natural extension for the Baku-Ceyhan and the Tengiz - Novorossijsk oil pipelines, the construction of which was recently confirmed," Ferguson said.
In this way, there are more chances that the pipeline will be used to capacity through transporting Caspian crude oil via the Albanian port of Vljora to the US.
With the postponement of the trilateral agreement between Bulgaria, Russia and Greece, the dilemma on the two pipelines remains an unsolved, yet a critical issue both to insider parties, Government and future partners of the sites. The issue will increase in importance as all eyes will be set on the energy sector next year, as the Government has to provide ample opportunity to domestic and foreign investors to meet its forecasts. Also last week, the Cabinet projected that more than half of next year's direct investment would be directed to energy projects.
Russian Deputy Energy Minister Vladimir Stanev, the person authorised to sign the document on behalf of Russia, suffered a loss of a bereavement asked for a postponement for personal reasons.
Late last week, Bulgaria authorised Hassan Hassan, Acting Minister of Regional Development and Public Works, to seal the accord on the country's behalf.
While the signing was delayed, work on setting up the Bulgarian Operation Company (BOP) continues at full speed. At a special meeting at the Ministry of Regional Development and Public Works, Hassan and representatives from all eligible candidates held six-hour talks to decide on the stake allocation and lay the legal groundwork of the future consortium.
Contrary to expectations, Hassan told journalists after the meeting that the state would retain a golden stake to oversee the implementation of the project and, notably, the quality of the materials used. Through its participation, the company would also help in the seizure of land, located on the route of the future facility. Following the construction, it would monitor the environmental, transit and port charges that would be later raised.
As already agreed, the holding is expected to comprise the nine construction and engineering companies that passed the eligibility test of the Bulgarian Ministry of Regional Development and Public Works along with two additions, which joined in after the approval of both the ministry and the remaining stakeholders-to-be. Glavbol-garstroy, Gazstroymontazh, LUK-oil Bulgaria, Magnum 07, Holi-con, Monolit 3, Interneftigaz-montazhi, Chimremontstroy and Minstroy Holding will have a stake in the holding. The new entrants are Kontrolnozavaruchni ustrojstva and Trans-stroy Bourgas.
The meeting also found that the overall stake participation declared by the parties in the future consortium extended 2.5 times the value of the Bulgarian stake of 227 million euro. Regardless that most were supported by state guarantees, this circumstance predicates a new reshuffle of the stake positions. Upon failure to do so, the state will be allowed to act as an arbiter, according to meeting participants. This, along with the final draft of the consortium's rules and regulations, has to be ready by January 15. According to preliminary information circulated by the head of Glavbolgarstroy, Simeon Peshov and later confirmed by Hassan, LUKoil would enjoy the highest stake.
The reasoning behind it is that the move would pay tribute to LUKoil is rising investment in the region. Only in the past year, LUKoil tripled its investment in SouthEast Europe to reach 192 million euro and is the major contributor to the budget, accounting for a quarter of budget revenues, LUKoil officials said last week at an international conference entitled Transit and Supply of Oil and Natural Gas in Central and Eastern Europe and the Balkans.
The draft document at the meeting said that the company could at any moment cover all expenses on the project, including preliminary survey and extraordinary costs. All contractual parties decided that the company would have an initial capital of 500 000 euro, 350 000 of which would be allotted for feasibility studies.
At the meeting, Hassan demanded that the companies prepare a draft budget on the establishment of the BOP, as well as a draft document preparing BOP to join the intra-Balkan company that would merge the operations of the consortiums of all three partnering countries.
At the international conference, which gathered energy sector players from the country and abroad along with the executive companies, Project Manager of the DEP Thraki from Greece, Christos Dimas, said that the Bourgas - Alexandroupolis oil pipeline was the most economically feasible project on the Balkans.
The statement emerged during a debate aimed to find out which of the two competing oil transmission projects, the Bourgas - Alexandroupolis and the Bourgas - Vljora oil pipelines, was the more economically viable and likely to yield a better return on investment and on the opportunities for the two to co-exist as the Government was yet to decide which of the two projects to prioritise.
Dimas voiced a general opinion by saying that the last option would unnecessarily cut transit fees to below $5 a ton and that in all cases there would be just one pipeline.
"Bourgas-Vljora looks more favourable to Bulgaria, because most of the 900km long pipeline is situated in Bulgarian territory and the state would profit from higher transit fees," said Deputy Prime Minister and Economy Minister Nikolai Vassilev.
Ted Ferguson of US power company AMBO, upheld his point of view. "Should the Government prefer the Bourgas-Vljora oil pipeline, Bulgaria would put itself on better competitive grounds as this pipeline would become the natural extension for the Baku-Ceyhan and the Tengiz - Novorossijsk oil pipelines, the construction of which was recently confirmed," Ferguson said.
In this way, there are more chances that the pipeline will be used to capacity through transporting Caspian crude oil via the Albanian port of Vljora to the US.
With the postponement of the trilateral agreement between Bulgaria, Russia and Greece, the dilemma on the two pipelines remains an unsolved, yet a critical issue both to insider parties, Government and future partners of the sites. The issue will increase in importance as all eyes will be set on the energy sector next year, as the Government has to provide ample opportunity to domestic and foreign investors to meet its forecasts. Also last week, the Cabinet projected that more than half of next year's direct investment would be directed to energy projects.
