Serbia agrees Gazprom energy deal

Version 0 of 1.

The Serbian government has agreed a major deal with gas giant Gazprom which increases Russia's hold on Europe's energy supply.

Under the draft agreement, Russia's state-run monopoly will buy a majority stake in Belgrade's NIS oil monopoly and run a gas pipeline through Serbia.

Last month, Gazprom offered 400m euros (£298m; $580m) for NIS. The EU urged Serbia to apply "objective" interests.

The financial terms of the deal have not yet been disclosed.

The Serbian government said it had "adopted... the draft agreement with the government of Russia on co-operation in the energy and gas field".

Belgrade accepted the offer in the midst of a presidential election campaign and days after Bulgaria backed Moscow's South Stream pipeline project, which will pump gas across the Balkans to Italy.

Some analysts argued that the NIS sell-off to Moscow might be politically motivated and there has been disagreement within the Serbian government.

Serbia's energy and mining ministry said the motivation was not political, but based purely on a need for a secure supply of gas.

But economy minister Mladjan Dinkic has warned that the price for NIS could have been far higher than the Russian offer.