"Bulgaria in Russia gas supply row"
Article written by BBC NEWS
Summarized by Cool Walrus
On January 6, 2006, BBC NEWS published an article on a dispute between the Russian state-run energy firm Gazprom1 and Bulgaria, about the price of Russian gas. “The Russian side demanded that we renegotiate the scheme of payment for transiting Russian gas through Bulgaria to Turkey, Greece, and Macedonia,” said Bulgarian Energy Minister, Rumen Ovcharov, to the Bulgarian TV station bTV. Currently, Bulgaria is getting a discount on the Russian gas imports, in exchange for letting Russia use some of its land for delivering Russian gas to other nations. In one current contract between a Bulgarian state-owned energy firm, Bulgargaz, and Gazprom, Bulgaria pays $258 per 1,000 cubic meters of gas delivered straight to their country. But Russia also pays transit fees for its gas directed to other nations by reducing the price of Russian gas from $258 to $83 per 1,000 cubic meters for only some of its gas. Mr. Ovcharov said that Gazprom offered to pay in cash for the delivery of its gas over Bulgaria, but raise the price of the second contract from $83 to $258. Mr. Ovcharov said, “We will answer this offer is unacceptable. There are no review possibility clauses in our contract signed in 1998 to run until 2010.” This happened after, January 1, 2006, when Russia stopped its gas supplies to Ukraine after Kiev refused a price increase that would have gone up from $50 to $230. Bulgaria is very dependent on Russia for oil, but it also uses nuclear and coal-fired power stations for energy.
This impacts the Bulgarian government and people because the government might have to pay more money or let Russia use some of its territory for transiting gas to other countries, and the people maybe will have to pay for higher priced Russian gas. This issue also impacts Gazprom and Russia because Gazprom might not agree to what the Bulgarians want, which will affect the amount of money they make. It impacts Russia because the amount Gazprom makes will affect their national GDP and GDP per capita.The outcome of this dispute can also affect the countries that Gazprom delivers to through Bulgaria. I think a possible compromise would be to make one contract that takes into account the real price of the gas with the dicount for letting the Russians use some of their
territory.♣
1. Gazprom supplies almost all the gas needs of Central Europe, Eastern Europe, and the former Soviet Union. (Wikipedia)
Summarized by Cool Walrus
On January 6, 2006, BBC NEWS published an article on a dispute between the Russian state-run energy firm Gazprom1 and Bulgaria, about the price of Russian gas. “The Russian side demanded that we renegotiate the scheme of payment for transiting Russian gas through Bulgaria to Turkey, Greece, and Macedonia,” said Bulgarian Energy Minister, Rumen Ovcharov, to the Bulgarian TV station bTV. Currently, Bulgaria is getting a discount on the Russian gas imports, in exchange for letting Russia use some of its land for delivering Russian gas to other nations. In one current contract between a Bulgarian state-owned energy firm, Bulgargaz, and Gazprom, Bulgaria pays $258 per 1,000 cubic meters of gas delivered straight to their country. But Russia also pays transit fees for its gas directed to other nations by reducing the price of Russian gas from $258 to $83 per 1,000 cubic meters for only some of its gas. Mr. Ovcharov said that Gazprom offered to pay in cash for the delivery of its gas over Bulgaria, but raise the price of the second contract from $83 to $258. Mr. Ovcharov said, “We will answer this offer is unacceptable. There are no review possibility clauses in our contract signed in 1998 to run until 2010.” This happened after, January 1, 2006, when Russia stopped its gas supplies to Ukraine after Kiev refused a price increase that would have gone up from $50 to $230. Bulgaria is very dependent on Russia for oil, but it also uses nuclear and coal-fired power stations for energy.
This impacts the Bulgarian government and people because the government might have to pay more money or let Russia use some of its territory for transiting gas to other countries, and the people maybe will have to pay for higher priced Russian gas. This issue also impacts Gazprom and Russia because Gazprom might not agree to what the Bulgarians want, which will affect the amount of money they make. It impacts Russia because the amount Gazprom makes will affect their national GDP and GDP per capita.The outcome of this dispute can also affect the countries that Gazprom delivers to through Bulgaria. I think a possible compromise would be to make one contract that takes into account the real price of the gas with the dicount for letting the Russians use some of their
territory.♣
1. Gazprom supplies almost all the gas needs of Central Europe, Eastern Europe, and the former Soviet Union. (Wikipedia)
posted by The Prophecy @ 3:13 PM
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