News conference following Russian-Bulgarian talks

Wednesday, 30 May 2018 15:00

President of Russia Vladimir Putin: Mr Prime Minister, ladies and gentlemen,

Prime Minister of Bulgaria Boyko Borisov and I have just concluded talks. They were held in a business-like and constructive atmosphere and were fairly productive.

Bulgaria is an important partner in Europe and on the Balkans. Our relations rest on centuries-old traditions of friendship and neighbourliness, as well as the cultural and spiritual kinship of our peoples.

This year we celebrate the anniversary of a landmark date in our relations – 140 years since Bulgaria’s liberation from the Ottoman yoke. As is known, Russia made a major contribution to the victory of the Bulgarian people in the struggle for independence and did much to restore Bulgarian statehood.

It is important for us that the durable, diverse ties that have historically existed between Russia and Bulgaria continue developing on a mutually beneficial and equitable basis.

During today’s narrow and expanded format meetings, the Prime Minister and I discussed in detail the current situation, priorities and the most promising areas of joint work in the most diverse areas.

Naturally, we paid special attention to expanding economic cooperation. Last year our trade increased by 24 percent to reach $3.5 billion. The total amount of Russian investment exceeded $3.3 billion.

Russian companies are actively investing in the Bulgarian economy, primarily in oil processing, agriculture, construction, and real estate.

Russia is a reliable energy supplier for Bulgaria. We meet all Bulgaria’s natural gas needs, for instance. About three billion cubic metres is supplied annually.

I would like to note that transit flows of Russian hydrocarbons to South Eastern European countries pass through Bulgarian territory. We can further develop cooperation in this vital area, thereby making an even bigger contribution to ensuring European energy security.

We discussed in detail cooperation in the nuclear power industry. The Rosatom State Corporation will continue supplying nuclear fuel to the Bulgarian Kozloduy Nuclear Power Plant. It will also help Bulgarians to upgrade this plant and extend the term of service of its sixth energy unit.

In addition, Russia is ready to return to the idea of carrying out the project to build Belene Nuclear Power Plant – if, of course, the Bulgarian leadership decides to. Based on the market, of course.

The Prime Minister and I were pleased to note the consolidation of interregional ties. Over 80 regions of the Russian Federation are developing partnerships with Bulgarian regions.

Last year, Varna hosted the Forum of Sister Cities that was attended by almost 30 cities of the two countries. In autumn, the Days of Moscow festival is scheduled to be held in Sofia.

One more important subject of our talks was cooperation in culture. As we have just recalled, guest performances of the Sofia Opera and Ballet Theatre were held with great success in the Bolshoi for the first time in 40 years.

We are maintaining close ties in education. This year over 200 state scholarships have been allocated for Bulgarian students and we are planning to increase this quota.

Importantly, Bulgarian citizens have remained steadily interested in studying the Russian language. I have thanked the Prime Minister for the Bulgarian Government’s efforts to maintain this interest.

We intend to continue encouraging tourism contacts. Bulgarian resorts are traditionally highly popular in Russia. Last year half a million Russian tourists visited Bulgaria.

About 300,000 Russians own housing on the Bulgarian Black Sea coast. Their investment in Bulgarian real estate amounts to $5 billion.

I expressed my gratitude to the Prime Minister for showing care for our military memorials on Bulgarian soil where tens of thousands of Russian soldiers who perished fighting to liberate Bulgaria are buried.

We agreed to draft a special agreement on cooperation on maintaining and protecting burial grounds.

Mr Borisov and I also exchanged views on pressing international and European issues.

In conclusion, I would like to thank the Prime Minister and all our Bulgarian colleagues for the open and substantive discussion.

Thank you for your attention.

Prime Minister of Bulgaria Boyko Borisov (retranslated): Mr President, colleagues,

I think we have had a very important and pragmatic conversation. I subscribe to everything said by President Putin about our cultural, historical and religious affinity. I do not want to repeat these words for Bulgarian journalists. Bulgaria is in for the major developments that will become clear today – whether a second step will be taken in the effort to supply Russian gas via the Turkish Stream pipeline to Bulgaria. This is what we discussed. President Putin told us that yesterday they spoke with the Turkish President and there are no objections to the extension of the Turkish Stream gas pipeline towards Bulgaria.

In the past there was a different project. Now we are returning to the gas distribution pattern on the Balkans. It was possible to carry out a different project but it is now a thing of the past. You know what the situation was like at that time. Now we are absolutely certain that Mr Miller, our ministers will find a pattern for redistributing gas under contract with other countries, selling it and transporting it to other countries in our region.

Naturally, considering the large amounts of Russian gas coming from Ukrainian territory and via Turkish Stream, it is necessary to find a formula for establishing a gas distribution hub.

As for the Belene Nuclear Power Plant, I know that many Bulgarians would like to hear about this. As we discussed with President Putin in Sofia, the units have been paid for and Russia refused interest payment. Bulgaria has two reactors and a certified site in Belene.

Now that we have learned our lesson and are using the property we have – the reactors and the site – we are trying to find an investor to carry out the project on a market basis. We want this project not only to generate profits but also to provide for the reliable operation of the plant in the future, after a ten year period.

We thanked our partners for extending the service life of the nuclear units at the Kozloduy Nuclear Power Plant. However, this plant is not eternal and we will have to build another one. So we are ready to welcome all candidates that offer the best conditions for this site.

With regards to culture, I would like to mention that a wonderful exhibition of medieval icons will open in Moscow on June 27. This is a unique event and I invite all of you to come. These are miracle-working icons. We also jointly celebrated May 24 and are carrying out a number of cultural events. We hope this practice will continue and similar events will be held.

Russian helicopters that are used in Afghanistan, MiG fighters the Bulgarian armed forces are equipped with and Su attack aircraft – before we buy any new hardware we will work on servicing and repairing them. The helicopters are already under repair and the fighters are waiting their turn.

We have good prospects. The issues that we discussed on gas and other subjects have been approved by the European Commission. I conveyed greetings from Jean-Claude Juncker. We have invited President Putin to pay a reciprocal visit to Bulgaria and will be pleased to receive him. President Radev also said this.

Building infrastructure on our part of the Balkan Peninsula has been a long-standing tradition since the Russian-Turkish war. We urge all representatives of this region to maintain peaceful relations, renounce armed conflicts, develop their industry and infrastructure, and increase GDP.

We talked about ending the conflict in Syria to stop the flood of migrants to Europe. We are striving for peace, dialogue and compromise.

There is no point in talking about the traditionally good relations between Bulgaria and Russia. In conclusion, I would like to wish you success in hosting the FIFA World Cup. You will be in the focus of attention.

I would like to mention the good work that our respective special services did in terms of countering money laundering, terrorism and migration. I hope this will continued.

I wish you success in holding the World Cup and wish the best in trying to win it.

Thank you.

Question (retranslated): As we understand it, Bulgaria plans to build a gas distribution centre. Did you talk about gas volumes and prices?

And, if you will, I would like to ask Mr Putin an additional question. You noted that the meeting with Mr Borisov is taking place after a fairly long time. Did you discuss the Skripal case?

Vladimir Putin: No, we did not talk about the Skripal case. I hope that at some point we will conduct a substantive discussion with our British colleagues on this issue.

As for the meeting with Mr Borisov, I talked about this. We discussed the issues in detail, including energy cooperation. I believe people in Bulgaria know that our company LUKOIL alone has invested over $3 billion in Bulgaria. The activities of this Russian company amount to 9 percent of Bulgaria’s GDP; a quarter of the Bulgarian budget revenue is generated from the activities of just this one Russian company. I think these are telling facts.

We have very good experience in cooperating in the hydrocarbon and nuclear power industries. We discussed all these issues today. As Mr Prime Minister said, and I can confirm this, we have always discussed the opportunities for Turkish Stream to reach Europe, including via Bulgaria, with our Turkish partners.

President Erdogan of Turkey confirmed this again during our telephone conversation yesterday. We are working on this in practical terms with our Turkish and Bulgarian friends. I know that Bulgaria is building certain transit capacities on its territory. As for the volume and prices, this is up to the companies involved – there are many purely commercial economic issues that are within their competence.

Boyko Borisov: I can say that the market will determine the prices depending on transit volumes. We have discussed this with our Russian colleagues. Having parted with the planned economy a long time ago, Russia has established a market. For those who offer us the best prices and contract terms, we are striving to become a transit country, receive proper revenue and remain within the gas distribution system that passes through Turkey, Greece, Italy and Albania…

We know about the difficult relations in the past and are grateful to our colleagues for not being vindictive and the fact that Russian-Bulgarian relations do not depend on the extent of guilt of some politicians. We are thinking about the future economic development of our two countries.

As for your question, we talked about this last March. I would like to thank President Putin for his attitude once again. I am to blame for creating certain tensions, but there were meetings in Gdansk and Sofia and we have spoken by telephone. When it came to the worst and I wanted to talk, my calls were always answered. And I really accept part of the guilt for those developments.

As for Skripal, this has nothing to do with us.

Vladimir Putin: I can only add that the issues of supply volumes, transit or hubs need to be resolved in the general context of our energy supplies to the European market.

The construction of Nord Stream 2 is a big topic of discussion right now. How much will we distribute via the new pipeline? This is the question. How much will still be sent through Ukraine, and we are ready to maintain Ukrainian transit, – this is another question. How much do our consumers need now and how much in the short term?

But what we talked about today with the Prime Minister are absolutely realistic points because the work on Turkish Stream is almost complete. We have already finished one line across the bottom of the Black Sea. This section is finished. Now we are beginning the onshore construction in Turkey.

In addition, we signed the necessary agreements and documents with Turkey regarding the construction on Turkish territory. The second line is half-built. This is just over 200 km across the seabed; the entire distance is 400 km or so, I believe. Therefore, everything we are talking about is becoming reality – and very soon.

Boyko Borisov: It is very important to clarify that it is impossible to lay a direct line because the second section of Turkish Stream has already been laid. But if we make sure that Bulgaria is a stable, reliable and predictable gas distribution centre for European countries, the additional pipeline will cost around 9 billion euros.

We can continue these talks and leave the door open if we prove our genuine interest. The Bulgarian public does not know this but Gazprom and Vladimir Putin relieved us from paying around 800 million euros to Italian companies for the platforms that they delivered to the Burgas port.

Vladimir Putin: Gazprom covered the penalty. Gazprom’s total loss due to cancellation of the South Stream accounted for around 800 million euros, which was written off as a loss.

Question: I have a question for Mr President and Mr Prime Minister. You spoke about energy cooperation and mentioned the Nord Stream 2 and South Stream projects. Here is my question: South Stream has not been implemented but Bulgaria has indicated its interest in new projects of this kind. Are there concerns that they could be jeopardised without guarantees from Bulgaria and the other EU countries?

Also, I would like to ask your opinion about Azerbaijan’s Southern Gas Corridor. How does it relate to Turkish Stream, and what do you think about the EU support for Azerbaijan’s project and its exemption from the Third Energy Package?

Vladimir Putin: As for the first part of your question, I believe that Mr Prime Minister and I have already spoken about this in detail. We regret, and, as far as I can see, Bulgaria regrets as well that the South Stream project has not been implemented, because everyone knows that it would have greatly benefited Bulgaria.

We can approach the matter from a different side, in this case via Turkey. I can say once again that we are for it. I have told Mr Prime Minister that we are ready to build this pipeline along the agreed route.

As for Azerbaijan’s Southern Gas Corridor that you have mentioned, we welcome any economic activity in this sphere. We welcome diversification in the field of energy supplies to the European market, because this creates market conditions, which is exactly what we want.

The only thing of concern to us, which we continue to discuss with our partners in Brussels, is that market conditions must be equal for all parties. As far as I know, the Southern Gas Corridor has been given special incentives, including exemption from the Third Energy Package.

In this context, why were similar conditions not offered to South Stream, a project that has not been realised, unfortunately? Is Bulgaria inferior to any other country in this respect?

We believe that these problems will be eventually settled during the talks and discussions with our Brussels partners. Ultimately, everyone wants the situation on the European energy market to satisfy the interests of all parties, including suppliers and consumers.

Boyko Borisov: President Putin was very clear when he said that a market-based approach must guide our actions. Bulgaria has already built a pipeline linking it to Turkey, and the construction of pipelines to Romania and Serbia is underway. Another pipeline with Turkey will be built this year, and the pipeline to Greece has already been launched towards Thessaloniki, and a pipeline to Macedonia. We are developing our gas transportation infrastructure using our own funds, and new compressor stations have been installed. This means that we are creating wonderful opportunities for delivering cheap gas to the market. These efforts promote competition, which in turn is a major driver for economic development.

Those who are able to offer gas at the lowest price will be able to gain a foothold in the market. Bulgaria has adopted a special approach on this matter. We are the most loyal and the most disciplined country in the European Union. This is the reason why all the pipelines bypassed our territory. We hope that today we have redressed an injustice.

These pipelines now go through Turkey, a NATO member, as well as Greece and Italy, who are also NATO members. We had backed out of these projects for the sake of principle, which complicated our relations with Russia. So I am very grateful that Russia holds no grudge against us. A senior partner is always more inclined to grant forgiveness.

Vladimir Putin: This matter was raised during talks with Mr Prime Minister. The question of who should be viewed as a senior and who as a junior partner is quite confusing for me, since it is usually the senior partner that is expected to foot the bill. We do understand however what this is all about. We do understand, as does Bulgaria, that large-scale projects require guarantees, primarily financial guarantees, which could be executed as either sovereign guarantees granted by the Bulgarian Government or resolutions adopted by the European Commission to this effect. We intend to move forward along both of these tracks. Everyone has a clear understanding of what is going on, and no one wants to see any failures or disruptions again. On the contrary, what everyone wants is to move forward.

Boyko Borisov: Jean-Claude Juncker headed a European Commission delegation that came to Sofia and presented a plan of the Balkan gas distribution hub to the media. This project is backed by our European partners, who met with President Putin over the past few days. I am referring to Angela Merkel, Emmanuel Macron and Sebastian Kurz. This time we stated our position with the utmost clarity, since this is a matter of principle for Bulgaria, as well as for the European Union.

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