Energy deals take center stage in Putin’s trip to Bulgaria

Posted by Oil Tycoon

January 21, 2008

Energy deals will take centre stage on the second day Friday of the visit to Bulgaria of Russian President Vladimir Putin amid criticism that while seeking to profit from the contracts, Bulgaria seals its total dependence on Russia for its energy sources.

Putin arrived Thursday evening on his second trip to Bulgaria that will most probably be his last major push for Russia’s energy interests abroad before stepping down.

Symbolically accompanied by the man he favours to succeed him in the Kremlin, First Deputy Prime Minister Dmitry Medvedev, Putin will oversee Friday in Sofia the signing of several long-delayed energy agreements.

Russia’s company Atomstroyexport will ink a four-billion-euro (5.9-billion-dollar) contract to build a new nuclear plant at Belene on the Danube.

After 14 years of talks, the two countries will also finally set up a joint company for building the Burgas-Alexandrupolis pipeline to channel Russian oil from the Black Sea to the Aegean, hailed as a vital alternative route bypassing the tanker-congested Bosphorus Straits.

Putin will also try to convince Bulgaria to take a stake in the South Stream gas pipeline proposed by Russian giant Gazprom and Italy’s ENI, which will transport gas from Russia under the Black Sea to Bulgaria and then to central and southern Europe.

Bulgaria, which receives alsmost all of its oil and gas from Russia, already pledged support for the rival European Union flagship Nabucco pipeline, which aims to diversify Europe’s energy sources by bypassing Russia and feeding gas from the Caspian basin. And Bulgarian Foreign Minister Ivaylo Kalfin announced Thursday that no agreement will be signed this week.

But it is also eager to profit from hefty transit taxes paid by Russia for oil and gas transit through its territory.

And while Bulgarian President Georgy Parvanov rejected Thursday suggestions that his country was having to choose between Europe and Russia, critics accused the government in the former staunchest Soviet ally of becoming a pawn in Moscow’s game for greater power in Europe.

For the first time the visit of a Russian leader also sparked protests as about 650 demonstrators braved the cold in the Bulgarian capital Thursday evening and gathered to shout anti-Putin slogans and boo the presidential cortege as it came downtown from the airport.

Economic ties between the former Cold War allies suffered a setback following the fall of Communism in 1989 but Bulgaria is still grateful to imperial Russia for liberating it from five centuries of Ottoman domination in the Russo-Turkish War of 1877-1878.

Putin’s energy push in Sofia was also officially organised to mark the 130th anniversary of the war this year by launching a “Year of Russia” in Bulgaria.

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