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Bulgaria: Gas Company Emerges With A New Image

Sofia, 20 November 1997 (RFE/RL) -- "Topenergy" is a joint Bulgarian-Russian company for the transportation of natural gas from Russia to Bulgaria. After the Alliance of Democratic Forces won the April 19 parliamentary elections in Bulgaria and formed the present government under Prime Minister Ivan Kostov, Topenergy became something of a litmus for Bulgarian-Russian relations as a whole.

Months of negotiations between the two sides revealed differences not only on the price level of gas supplies - the Bulgarian side considered it too high -- but also about how the business should be organized -- the Bulgarian side wanted direct shipments, without participation of intermediaries. The fact that for a long time no agreement was reached prompted the press in both countries to speculate that bilateral relations were in crisis.

The picture changed abruptly after the decisions taken by the shareholders assembly of the joint stock company, which ended in Moscow on Nov. 14. After two days of heated discussions the delegation of the Russian gas giant Gazprom, holder of the Russian shares, surprisingly supported the demands of the Bulgarian side for the future structure and activity of Topenergy.

Namely: that in the joint company there should be only two partners -- Gazprom and the Bulgarian state-owned firm Bulgargas -- each with 50 percent the shares;

that the other shareholders, all from Bulgaria -- Multigroup, First Private Bank, Himimport and Bulbank, should sell their shares to Bulgargas at nominal prices;

that future imports of gas from Russia to Bulgaria should exclude commission-taking intermediaries.

Even before the Moscow meeting, the Bulgarian First Private Bank, Himimport, and Bulbank had already sold at nominal prices their shares in Topenergy to Bulgargas. But Multigroup refused, hoping that at the shareholders' assembly Gazprom would take its side. It didn't. What is more, Gazprom's chief Ren Viahirev appeared to go out of his way to demonstrate friendship to the Bulgarian delegation.

He told the leader of the Bulgarian side, Ivan Shiliashki, that Russian gas supplies for Bulgaria will not be terminated, under any circumstances. Shiliashki said at the airport on his delegation's return from Moscow that Viahirev had also given assurances that Russia is ready to accept payment of up to 50 percent for the gas with Bulgarian goods and construction services.

As things stand now, Multigroup has no real choice but to pull out of Topenergy, clearing the way for Bulgargas to take a 50 per cent ownership of the joint company's affairs. The development is not only an important business achievement for the Kostov cabinet. It will also help change the negative attitude of the Bulgarian public towards the joint stock company, which many people suspected had been created as a tool of Mafia interests.

In view of questions about its origin, and also of the status of two of its founders -- Multigroup and First Private Bank -- this hypothesis has sounded quite plausible to many. That's because it's widely known that Multi and the bank were organized by members of the former secret services of the communist regime. The First Private Bank, moreover, went bankrupt with huge losses, stemming from unguaranteed credits, and its affairs are at present under scrutiny of a criminal court.

It's well known that the project for creation of the joint company had from the first the blessing of Gazprom's leadership, and that the Russians wanted to give its management to former Prime Minister Andrei Lukanov. Lukanov, was assassinated last year in a still-unsolved crime. He was one of the so-called reformists in the Communist Party and a key member of the group of high functionaries who toppled communist state and party leader Todor Zhivkov in November 1989.

Lukanov was a critic of the Socialist government of Jan Videnov, which was in power when Topenergy was being formed two years ago. And it is a well known fact that Videnov's government was not pleased with the Russian plans for the installment of Lukanov as head of Topenergy.

The assassination of Lukanov cast a dark shadow over Topenergy, an ugly addition to the heap of unanswered questions about the real purpose of the company and the interests behind it.

Now Topenergy emerges with a new image. A member of the supervisory council of the company, Antoan Nikolov, says that following the latest developments Topenergy will no longer be in effect an intermediary in the supply process, because after the restructuring of the capital it will be a filial of Bulgargas. Nikolov says it will be a useful instrument for supplying Bulgaria with Russian natural gas, and for transiting growing quantities of gas through Greece, Macedonia and Albania to Western Europe.