London (Platts)--9Sep2008

Serbia's Parliament on Tuesday adopted a wide-reaching energy agreement
with Russia that Serbia hopes will cement its energy supply for decades to
come.

In early May, the outgoing Serbian government adopted the agreement with
Russia that would see Russia's Gazprom Neft buy a 51% stake in Serbia's
state-owned oil and gas company NIS for Eur400 million ($588 million) and give
Gazprom a stake in a gas storage facility in Serbia.

In exchange, Serbia is to become a transit country for the South Stream
gas pipeline to Europe from Russia.

At a parliamentary sitting Tuesday, Serbian MPs approved the agreement
with a large majority.

A total of 214 MPs voted in favor of approving the deal, with only 22
against and one abstention.

At the same sitting, the Parliament also approved a stabilization and
association agreement with the EU, that paves the way for Serbia joining the
bloc.

What remains unclear, however, on the energy deal is whether the
originally agreed price that Gazprom Neft would pay for the stake in NIS will
remain valid.

On Monday, consultants Deloitte & Touche valued the whole of NIS at some
Eur2.2 billion ($3.1 billion), considerably higher than the previous
agreement, which valued a 51% stake in the company at only Eur400 million.

Serbia's Economy Minister Mladjan Dinkic has said the purchase price for
NIS is too low and the previous government agreed to the price without having
undertaken an evaluation of the company's market value.

However, Gazprom Neft President Alexander Dyukov has said the company
sees no reason to raise the price it has agreed to pay.