Russia’s ambassador to Serbia, Alexander Botsan-Kharchenko, a respected and experienced diplomat and undoubtedly a great connoisseur of Serbia and the Balkans, reacted critically to last week’s column here entitled “Overdraft of Serbian-Russian Friendship”. I am sorry that this ambassador’s reaction, in the form of an open letter sent to me, did not interest the Serbian media (it was published only on the Russian embassy’s website and on the Sputnik portal), but the ambassador’s high reputation and the importance of the country he represent oblige us to offer some clarifications.
The statement from last week’s column that the NIS account was blocked on June 30 for about two million euros may seem to be the reason for the reaction of Ambassador Botsan-Kharchenko. The esteemed ambassador confirms this, although underestimates, by saying that the blockade “lasted less than 24 hours”, after which the company “continued to fulfill all its obligations without endangering its liquidity”. It is quite understandable that the ambassador is defending the interests of Russian companies in Serbia, but I do not believe that NIS’s business was the reason for his public reaction. There was no such reaction many times before, when the Serbian media wrote much sharper about the Russian-Serbian oil giant, under the headlines “How much more Russian brothers? Petty thieves from NIS destroyed us” (Alo) or “Exploitation: Russians pay less and pump out more oil” (Kurir), or “Oilfield affair: Russians could devastate Serbian reserves by 2021 and then return NIS to us for one dollar” (Blic) or “Unclear: Police are investigating the sale of NIS to the Russians” (Kurir)…
That is why we will not deal with NIS too much here either, it was not the intention in the last week’s column either, because I was not hired by the management or shareholders as an auditor of the company’s business, but it is still important to say a few facts. First of all, due to the insistence of the esteemed ambassador on the success of this company’s business, thanks to its “professional management”.
As a reminder, according to the Interstate Agreement between Russia and Serbia and the Purchase Agreement between Gazprom Neft and the RS Government, all Serbian oil stocks and future exploration rights were handed over to the Russian management with a state fee of 3% (in Russia the fee is 25%!). From then until today, the main effort, skill and “genius” of the Russian management is to extract and process domestic (Serbian) oil as much as possible! The secret is in the difference in price between domestic and imported crude oil. In the period of the most intensive exploitation, the cost price of domestic (Serbian) crude oil is 10 times lower than the price of imported oil. Russian management, therefore, has an “ingenious” strategy: it forms the prices of petroleum products on the basis of the price of imported oil, and pushes into refining maximum quantities of domestic oil. The rate of extra profit is directly related to the percentage of refined domestic oil. The peak was 7-8 years ago, when over 50% of domestic oil was processed.
Prior to “privatization”, that share did not exceed 20% because serious and responsible people keep domestic oil reserves as state reserves. In this way, until today, NIS has earned around 5 billion euros on the basis of the difference in the price of domestic and imported oil! So, NIS’s profit was based exclusively on the mass exploitation of domestic oil, and not on the ingenious Russian management. The management of NIS could have done that even before the privatization, if they had not taken into account the interests of Serbia and the citizens.
NIS is currently over-indebted. Its debt amounts to several hundred million euros, and the company takes liquidity loans from commercial banks. The Russian management, in addition to huge salaries (which are a secret), has annual bonuses in the amount of 100% of the gross annual salary, although the current loss of NIS is higher than several tens of millions of euros.
Ambassador Botsan-Kharchenko’s public reactions to the press are not frequent, but, like this, they leave room for reality and arguments to challenge them. Not so long ago, in early June, the ambassador requested apology from “Blic” for an article entitled “Putin appoints Primakov to separate Serbia from the EU”, announcing the arrival of Yevgeny Primakov (grandson) as head of the state agency for international cooperation “Russian Cooperation”. Ambassador, certainly, did not deny that the grandson of the former Russian prime minister would come to this position, because that soon came true. President Putin appointed him to the position of director of the agency on June 25, with his decree number 416. In the reaction, however, it was disputed that Russia, through this agency, influences the events in those countries where its interests are endangered.
Primakov’s appointment was in focus because of his meeting with President Vučić last year, when a Russian guest suggested that he forms a transitional government, along with the leaders of the then street protests in Serbia, Dragan Đilas, Boško Obradović and others. Confirming that he spoke with Primakov at the time, President Vučić did not personally link him to the initiative on a technical government, but said that anyone who offered it to him would be “rejected”. The Serbian president respects diplomatic decency, but the informed bazaar has no dilemma that it was Primakov who brought such an initiative to Belgrade and that he received the answer in the form of an immediate interruption of talks with the president. Since at that time he was “only” a member of the ruling United Russia in the Duma, and not yet the director of “Russian Cooperation”, we can leave the possibility that Primakov worked on his own.
Non-interference in the affairs of other countries, which official Russia constantly emphasizes as a principle of its foreign policy, cannot pass without a reminder of last year’s revelation of the intelligence “cooperation” of retired lieutenant colonel of the Serbian Army Z.K. and Russian intelligence officer Georgy Kleban, a collaboration from which a Serbian officer came out richer for money and a Russian for information. And then it was confirmed that large countries, like Russia, have their interests in Serbia, which is completely legitimate, but also that it is legitimate and understandable that Serbia must also look after its own interests.
Finally, Ambassador Botsan-Kharchenko’s remark that my column last week was aimed at “imposing a Russophobic agenda” may impress me, because the ambassador has such a high opinion of my influence. But that is still excessive, because I often fail to impose my own agenda in my family, among children, let alone the “Russophobic agenda” in Serbia, in a country where Russia is considered fraternal and Russians are considered brothers. Precisely because of that “consideration”, I was obliged to clarify just a little bit what Russian interests are and what Serbian emotions are.