BULGARIAN ECONOMIC TOP NEWS DIGEST
WEEKLY REPORT ( 27 AUGUST – 3 SEPTEMBER 2010 )
Sections/headline briefs:
MACROECONOMY:
· Bulgaria welcomes unprecedented delegation of Korean tour operators
· Japan Bank for International Cooperation gives EUR 300 M to Bulgaria
· China saves Bulgarian sea ports
· Energy Minister: Serbia, others have 'general' interest in Belene NPP
· Moody's rates Bulgaria with positive outlook
· Sofia exports weapons for EUR 145 million
· China appoints new ambassador
· Construction of electric vehicle charging stations in Bulgaria to begin in 2011
INVESTMENTS:
· Bulgaria hopes to get Abu Dhabi money for infrastructure, Formula 1 track
· Thermal power plant Brikel to invest EUR 38 M in sulphur purification
- Regulations chaos in Bulgaria said to repulse renewable energy investors
· Over BGN 2 M EU projects to get first-class investor status
COMPANIES:
· US companies expected to focus on Bulgaria's nuclear, renewable energy, shale gas
· Energy sector companies post results H1 2010
· Bulgarian tobacco company registers huge profit increase
· Holcim to close cement plant in Pleven by end-2011
· Bulgaria’s Railways seek EUR 230 M loan from WB, EBRD
· French GDF Suez set to enter Bulgarian energy market
· UK JKX spuds Bulgarian wells
EVENTS:
· Modern Korean art on display in Sofia
MACROECONOMY:
Bulgaria welcomes unprecedented delegation of Korean tour operators
Bulgaria has been presented as a tourist destination to a business delegation fromSouth Korea, which is the first of its kind. Representatives of leading South Korea tour operators – such as the CEOs of Hana Tour, Mod Tour, Lotte JTB, Lotte Tour, Hanjin Travel – and journalists from theSouth Korean media took part in a trip around Bulgaria including Veliko Tarnovo, Arbanasi, Kazanlak, Nessebar, and Plovdiv. Bulgaria’s Deputy Economy Minister in charge of tourism, Ivo Marinov, presented Bulgaria before them as a “year-round” destination. In his words, the advantages of tourism in Bulgaria have to do with its diversity – the fact that the country offers summer sea vacations and winter ski packages, as well as alternative forms of tourism such as cultural and rural. Marinov told the South Korean tour operators that the tourism sector is an important component of Bulgaria’s GDP, and the state is focusing additional efforts into its development. The South Korean companies emphasized the increasing number of Koreans traveling abroad, and researched the options for creating suitable package offers.
Japan Bank for International Cooperation gives EUR 300 M to Bulgaria
The mission of the Japan Bank for International Cooperation (JBIC) is to arrive to Bulgaria to analyze the future of Terminal 2A of the Bourgas port. Terminal A2 for loose goods was constructed with a loan from JBIC but after the bankruptcy of Kremikovtsi steelworks, the terminal works at 1/3 of its capacity which impedes the payment of the credit. Now the JBIC mission will contemplate if it is possible to attract transit loose goods or to convert 2A into a terminal for containers and general goods. Whatever decision the JBIC makes it will defrost the absorption of the second state-guaranteed loan from JBIC aimed at the construction of two container terminals in the cities of Varna and Bourgas. The contract was signed in 2008 amounting to 37 billion yens or about 300 million euro. The problems with terminal A2, the absorption of the second loan from JBIC has been blocked for 2 years which is followed by penalty interest, port experts comment.
China saves Bulgarian sea ports
China might play the key role in saving the Bulgarian sea ports. ,,When I go to the USA for the UN session I ill have talks with the prime minister of China to discuss options for joint projects," PM Borissov announced in Varna yesterday. We need contacts with major goods' suppliers, countries that boast high production standards and export rates. With these countries we can launch public-private ventures that will revive our ports, the PM told the Standart. The ultimate goal is to bring back to life the Bulgarian ports and make them work at full steam within the coming 7-8 years. In the next two years Bulgaria will seek funding for these projects, Borissov commented. Another strategic project - a channel connecting the Danube and the Black Sea will also be Bulgaria's priority in the near future.
Energy Minister: Serbia, others have 'general' interest in Belene NPP
Serbia, Greece and Croatia have an interest in investing in future Bulgarian Belene NPP “just in principle” and no specific offers have been extended this far, said Bulgarian Minister of Energy Traicho Traikov. Under the title “No Interested Parties in Belene,” Serbian radio B92 quotes Tanjug, for which Traikov commented recent reports in the Bulgarian press regarding foreign investments in Belene NPP from Bulgaria’s neighbors. The Minister of Energy specified that there are no concrete proposals for participation in the projects submitted at the moment. He moreover refuted reports that the Belene NPP project “has been sold”, saying: “You should bring me the person to which it was sold so that I can meet him.” Minister Traikov further stated that a consultant on the project has not been yet appointed, but the procedure is underway and will be completed “extremely swiftly.” Thursday Traikov had announced that the cost of the Belene NPP project was going to be EUR 9 B, more than doubling the previously-quoted EUR 4 B cost.
Moody's rates Bulgaria with positive outlook
Bulgaria is the only country in Europe and Middle Asia with a positive outlook of sovereign credit rating, Moody's rating agency has announced. Moody's Investor Service published Friday the August edition of the European Sovereign Outlook, which explains the perspectives on sovereign ratings in Europe. According to the report, Bulgaria's assessment reflects the view of the agency that the country has a potential to reach a higher level of creditworthiness on the scale of investment ratings. In the evaluation process, Moody's takes into consideration factors such as economic status, institutional framework, level of government finances and exposure to risk. As a main conclusion the report has highlighted the fact that global perspective for tightening of public finances on real economy carries the risk of further lowering of state credit ratings.This is particularly true for Europe, whose economic growth is expected to be lower than the growth in the rest of the world because of the possibility for simultaneous tightening of fiscal policies in most countries on the continent.
Sofia exports weapons for EUR 145 million
The Bulgarian armories exported weapons for 145 million euro in 2009. The biggest buyers of Bulgarian weapons are Algeria, Afghanistan, the USA and Iraq. The import of weapons to Bulgaria amounted to 71,801,455 euro as the biggest part of them come from France, Ukraine, Serbia. This information was written in the report of the interdepartmental committee for export control and non-spread of weapons for mass destruction which has to be approved by Bulgaria's cabinet today.
China appoints new ambassador
Chinese President Hu Jintao has formally appointed six new ambassadors to foreign countries, according to a statement from the Standing Committee of the National People's Congress (NPC) on Wednesday. Hu made the appointments in line with decision made by the NPC Standing Committee. Mr.Guo Yezhou was appointed ambassador to Bulgaria, replacing Mr. Zhang Wanxue.
Construction of electric vehicle charging stations in Bulgaria to begin in 2011
Charging stations for electric vehicles will begin to be built in Bulgaria in 2011, Iliya Levkov, Chairman of the Management Board of the Electric Vehicles Industrial Cluster (EVIC), told BTA on Thursday. He expects that electric vehicles in the country will increase that year. Potential investors show great interest in the project, he said. Expectations of a local boom in such vehicles next year are based on the fact that large manufacturers are currently working on orders for 2011. While a foreign-made electric vehicle may cost up to 120,000 US dollars, those manufactured in Stara Zagora, South Central Bulgaria, cost as little as 20,000 leva (approximately 13,000 dollars). The cost of the charging station network will depend on the charging method. The investment will be considerable if the method involves battery replacement, Levkov said. A cheaper option will certainly be sought. This implies that the charging points will be built within existing filling stations, whose owners have already been approached with the idea. The construction of a battery replacement station would cost some 1 million leva (654,000 dollars), while the building of a small charging point within an existing filling station would cost no more than 50,000 leva (32,700 dollars). Between 40 and 50 people in Bulgaria currently own electric vehicles. Most of them have designed the vehicles themselves. The EVIC has initiated the creation of a national database of electric vehicles. It will serve to plan the future network of charging stations. The infrastructure will conform to the European standards for electric vehicle batteries. The charging time for a vehicle will be between 15 and 20 minutes. A vehicle is usually recharged after 150 kilometres of travel, which puts the recharge price at less than 0.02 leva (0.013 dollars) per kilometre, given the current price of electricity. At present, electric vehicles use mainly lithium-ion batteries, which cost between 15,000 and 20,000 leva (between 9,820 and 13,090 dollars). The service life of such a battery is 300,000 km of travel. Battery chargers are also quite expensive. Bulgarian experts are making improvements to lead-acid batteries. one of the main problems with such batteries is that they are too heavy, Levkov said.
INVESTMENTS:
Bulgaria hopes to get Abu Dhabi money for infrastructure, Formula 1 track
The government of Abu Dhabi is considering investing in Bulgarian infrastructure projects, including the potential construction of a Formula 1 circuit near Sofia. This has been announced by the press office of the Bulgarian Economy Ministry afterEconomy Minister Traicho Traikov signed an agreement for economic cooperation with Mohammed Abdul Jalil al Blouki, a senior representative of Emirates Associated Business Group (EABG), a state-owned company of Abu Dhabi, the largest and wealthiest member of the United Arab Emirates. The governments of Bulgaria and Abu Dhabi are going to set up a joint venture for studying the opportunities for the construction of a Formula 1 track near Sofia, and of the adjacent infrastructure. According to the agreement signed Monday, Bulgaria and Abu Dhabi will be managing jointly the potential future facility and any racing events organized there as part of international competitions. Bulgaria will contribute non-cash assets to the joint company, while Abu Dhabi is expected to provide the funding. In 2009, Bulgaria was in negotiations with Formula one commercial rights holder Bernie Ecclestone to secure a deal for hosting a grand prix as early as 2011. Bulgaria at present has the chance to host a round of Formula 1 in 2012 but is already late with submitting a circuit project and financial guarantees to FIA. The former air base at Dobroslavtsi near Sofia as well as the regions around the cities of Pleven and Varna have been described as possible sites for building the track. Earlier on Monday, the representative of Abu Dhabi met with Bulgarian Prime Minister Boyko Borisov, who invited the UAE to invest in infrastructure projects such as ports and highways. The meeting was also attended by the head of the Bulgarian Motocycling Federation Bogdan Nikolov and former Interior Minister and Socialist MP Rumen Petkov who chairs an initiative committee for construction a Formula 1 circuit in Bulgaria. The Bulgarian Ministry of Economy, Energy and Tourism and the InvestBulgaria Agency have announced they are going to provide the prospective UAE investors with detailed information about various spheres of the Bulgarian economy – such as infrastructure, agriculture, hi-tech, and real estate. According to preliminary data of the Bulgarian National Bank, in 2009, the United Arab Emirates invested a total of EUR 1.4 M in Bulgaria. In 2009, Bulgaria’s trade with the UAE amounted to BGN 80.4 M, with a positive balance.
Thermal power plant Brikel to invest EUR 38 M in sulphur purification
Local energy tycoon Hristo Kovachki vows to invest EUR 38mn in a sulphur purification installation at his thermal power plant and briquette producer Brikel. The decision was announced after talks between Kovachki, economy and energy minister Traycho Traykov, environment minister Nona Karadzhova and the labour unions. The installation should be launched no later than March 2012. Brikel should have stopped operations in April, after it used the allowed 20,000 hours and is now breaching its environment permit. The government will ask the European Commission (EC) to grant the company an extension, allowing it to operate until the purification installation has been built. The EC already denied doing so in July. Brikel is located at the Maritsa East coal mining complex in southern Bulgaria and employs more than 2,000 workers.
Regulations chaos in Bulgaria said to repulse renewable energy investors
Chaos and red tape in Bulgaria's regulations are believed to be a major obstacle to attracting large-scale foreign investments in renewable energy, according to analystZlatin Sarastov. Sarastov, analyst from Amphora Capital, a Sofia-based consultancy, has argued, as cited by the Cross news agency, that the recently announced investment of Japanese company Toshiba in a Bulgarian solar plant should alert the Bulgarian government about the expectations of serious investors for predictability in state regulations in the sector. In his words, the long period of return on investments and the price fluctuations of the equipment are combined with the lack of certainty and clarity with respect to the development of Bulgarian infrastructure and energy market regulations to chase away investors in renewable energy. The current situation thus makes very likely delays in the putting into operation of the respective energy facilities and also creates conditions for blackmailing on part of state officials. "While 2009 saw the realization of several relatively large renewable projects, 2010 is the year of the big wait. This was also caused by the irresponsible political rhetoric and mismanagement about the investors' expectations. The messages coming from the state institutions were contradictory. The use of the word "moratorium" in past few months also did not help," Sarastov believes. In his words, this has generated suspicions that the "chaos" has been brought about deliberately in order to "preserve" the local potential for certain people and companies by chasing away large foreign investors. "The Bulgarian government, however, is running out of time. It urgently needs an improvement of its image as well as foreign investors and the respective income to the budget, and will be forced to do what it is necessary for that, and to be predictable. Against this backdrop, investors are standing still in expecting a validation of their plans by large and authoritative investors. The Toshiba investment has arrived at a time when it is most needed. Perhaps it will serve to dissipate the doubts of the others and to unclog the sector," says the analyst. He also points out that the capacity of the Bulgarian energy distribution infrastructure is limited, which means that investors should probably consider risking with arenewable energy project now in order to fit within that capacity.
Over BGN 2 M EU projects to get first-class investor status
EU-financed projects worth more than BGN 2 million (USD 1.3m/EUR 1m) should be considered first-class investments, a move that would double the speed of administrative servicing, according to Tomislav Donchev, Bulgaria's minister in charge of EU funds absorption. Alongside fast-track administrative support, Bulgaria's first-class investors also get the right to purchase state property without tenders as well as receive government assistance in infrastructure development adjoining their projects. The proposed changes to the Investment Promotion Act will apply to investment projects funded under the operational programmes for regional development, transport and environment. Eligible candidates involve local governments, the government's Road Infrastructure Agency (RIA), state-run National Railway Infrastructure Company as well as the institutions related to marine and river transport. The Bulgarian parliament also plans to adopt a new law on European financing designed to streamline and speed up EU funds absorption procedures, said Monika Panayotova, chairperson of the respective parliamentary committee. She said that over the past year, paid EU financing has increased from 1% to 7% and contracted financing has grown from 10% to 34%. Bulgaria disburses an average of BGN 10 million under operational programmes each week and has funneled out upwards of BGN 34 million in the last week of August, according to Tomislav Donchev. He said this shows a sustainable uptrend in payments to beneficiaries. But the real picture is not that rosy as on day 1,340th of its EU accession Bulgaria has contracted just 34.5% out of the total EUR 8 billion (USD 10bn) it is entitled to and only 1,217 days remain by the end of 2013, which marks the end of the current EU budget, warned Bulgarian Socialist Party (BSP) MP Dimcho Mihalevski. He estimated that the government has to pay out EUR 113 million per month to absorb the entire allocation.
COMPANIES:
US companies expected to focus on Bulgaria's nuclear, renewable energy, shale gas
American companies are showing increased interest in various energy projects in Bulgaria and are researching their investment options, the new Bulgarian Ambassador to the USA, Elena Poptodorova told Sofia News Agency in an exclusive interview. Her Excellency, who just started her second term as Bulgaria’s Ambassador in Washington, DC, after serving at the same position in 2002-2008, has pointed out that nuclear energy, renewable energy, and shale gas extraction are being considered by large-scale US companies as investment options in Bulgaria. Upon presenting her letters of accreditation to the US President Barack Obama earlier in August, Poptodorova called for enhanced US participation in energy projects in Southeast Europe. “Energy cooperation has quickly become a priority area in Bulgarian-American relations alongside the need to amplify the entire economic and investment sector. This is work in progress. Bulgaria’s Deputy Minister for energy Marii Kossev was in Washington DC this week to take part in a shale gas conference. Obviously, this is one of the areas where more US companies show interest. Nuclear and renewable energy are also a possibility. But as I said, we are in a study mode,” Poptodorova explained. In her words, a potential expansion of Bulgaria’s only operational nuclear power plant at Kozloduy would certainly generate substantial interest among American energy giants. “NPP Kozloduy is always on the agenda, and big American companies, includingWestinghouse, will definitely be interested if and when a bidding process is started,” the new Bulgarian Ambassador to the US said. Bulgarian Minister of Economy, Energy, and Tourism Traicho Traikov recently said that the Borisov Cabinet may consider the construction of a third 1000 MW reactor at Kozloduy (and seventh unit at the plant overall). During his visit to the US in the late spring of 2010, he made it clear Westinghouse demonstrated interest in such a project. US Ambassador to Bulgaria James Warlick has recently made public the interest of American companies in shale gas extraction projects in Bulgaria. “I will be meeting with Chevron’s Vice-President Ian Macdonald on September 10. I will know more after the meeting,” Poptodorova told Novinite.com (Sofia News Agency) when asked about how US oil and gas giants view the large-scale future pipeline projects in Bulgaria – such as the Burgas-Alexandroupolis oil pipeline. Unconfirmed reports say Chevron and Exxon Mobil would consider acquiring shares the Burgas-Alexandroupolis pipe, a Bulgarian-Greek-Russian project for transporting oil from the Black Sea and Caspian region to the Mediterranean by going around the Turkish Straits. With respect to the potential of the Bulgarian economy for attracting US investments in all sectors, Poptodorova said Bulgaria must try to come up with “irresistible” offers such as manufacturing final products and selling them to third countries, and identifying projects of regional scope. “There is yet another unexplored opportunity. I keep urging the Bulgarian companies to reach out directly to the mid-states in America, and look for partners there. The two coasts are somewhat spoiled – with all the attention they usually get. But there are smaller places which are eager to have international outreach, and this is one more opportunity for our businesses,” said the Bulgarian Ambassador to the US.
Energy sector companies post results H1 2010
All companies in the energy sector, whether public or private, are interconnected and interdependent. They are also said to be like connected vessels - if one thing changes in one of them, it immediately reflects on all others. This is shown in the reports on activities of the sector state enterprises during the first six months of 2010, as published on the website of the Finance Ministry. Surprisingly some of the teetering until recently companies appear to be improving, while in other entities the negative trend seems to be exacerbated. The most significant entity, National Electricity Company (NEC), after experiencing deepening financial problems and struggling to repay multimillion-dollar loans for major projects (of dubious value) in the past several years, has now managed to stabilize its position. For the first six months of 2009, NEC posted a loss of BGN42.1 million, while a year later it generated a profit of BGN76.26 million. It seems that even its management had not expected such a development because the business plan for the first half of 2010 envisaged a much more modest profit - BGN3.8 million. The figures become even more impressive in the background of a decreasing revenue that dropped by 2.6 percent year-on-year over the same period, or by BGN37.37 million. This was mostly offset by higher production of electricity from its own hydroelectric power plants. What is also not to be overlooked is the enforcement of company's anti-crisis measures to reduce costs, which were cut by BGN155.8 million. The highest reduction was generated by lower sums paid on materials and external services. Labour costs also went down due to job cuts and retention of wage levels. "The financial results achieved are due to the fact that NEC is now operating under more favorable pricing conditions on the domestic market compared to the corresponding period last year. In the first half of 2009, a major cause for the deteriorating financial results were higher prices approved by the regulator and enforced as of January 1 for electricity produced in cogeneration power plants from which the company is obliged to purchase electricity under the Energy Act. These charges were set by the regulatory commission, without NEC being compensated for the additional costs of purchasing this electricity," a company representatives pointed out. The tightening of belts apparently has produced results also in another entity that is inextricably linked to NEC - the Electricity System Operator (ESO). For the first half of the year it posted a profit of BGN 6.4 million, against a loss of BGN42.7 million for the entire 2009. The traditional financial leader in the sector - the Kozloduy nuclear plant has also had something to celebrate for. From January to June 2010 it registered a revenue of BGN360.1 million, although a year earlier it was BGN381.1 million, but this half-year it managed to accumulate more profit as at end-June 2010 it exceeded BGN 62 million, compared to BGN54.2 million a year earlier. The formula for achieving this can be basically explained with reducing unnecessary costs. Amounts paid for external services have been most significantly reduced: from BGN78 million in the first half of 2009 to less than BGN50 million in the first two quarters of 2010. The plant, while reducing sums paid on materials, managed to increase wages of employees on which item it paid BGN71.1 million in the first six months of 2020, up from BGN66.7 million for the corresponding period of 2009. Another big player in the industry - Maritsa East 2 has seen a declining trend. For the first six months of 2010 it posted a revenue from the sales of electricity of BGN244.5 million, down from BGN292 million 12 months earlier. This has also been reflected in its profit figures - for January-June 2010 it earned BGN19.8 million, against BGN59.5 million in 2009. The main factor has been the lower quantity of electricity sold to NEC. In the first half of 2009 Maritza-East 2 sold electricity for BGN89.3 million to NEC, while a year later this figure dropped by BGN30 million. The latter can be partly explained by the launching of the modernisation project on its fifth block, which reduced the company's overall capacity. Another reason is that since January the price, at which Maritsa East 2 sells to NEC was reduced from BGN40.5/MWh to BGN38.35/MWh, because the regulator ruled that after the overhaul if its third and fourth unit, the company was able to produce more electricity while consuming less fuel. However, the idea behind that was actually to help NEC improve its situation. However, the record-low performance was registered by Bulgargaz . For the first half of 2010 the company generated a loss of more than BGN52.9 million, against a profit of BGN52.8 million for H1 2009. The reason for this collapse is in the games around gas prices that have been played on by several successive governments. The company's sales revenue is almost entirely composed of natural gas sales (99.53 pct od all sales). In the first half of 2010 the company sold 1,458 billion cubic meters of blue fuel for a total of BGN589.94 million, while during the corresponding period last year - it placed on the market 1,259 billion cubic meters worth BGN722.37 million. The decrease in sales revenue comes thus to 18.33 percent year-on-year and its main reason is the decrease of the gas price over the same period that went down by 28.77 percent.
Bulgarian tobacco company registers huge profit increase
Bulgartabac, Bulgaria's state tobacco company, has registered a 165.93% increase in net profit for the first half of 2010 in comparison with the same period last year. Bulgartabac's financial statements attribute that to considerable increase in exports and optimization of costs. Net profits for the first half of 2010 amount to BGN 7.5 M, with more than five-sixths of the production going for exports. Exports have increased 56% in volume and about 80% in terms of revenue. Sales for the first half of 2010 total 6736 B cigarettes at BGN 123 M. The company's market share has shrunk to 36% from 50% in 2009 and 90% in 2007. Bulgartabac's financial resources have grown with about 14% for the period. In 2009 Bulgartabac offloaded itself from two cigarette factories, in Plovdiv and Stara Zagora, and retains two more production facilities, in Blagoevgrad and Sofia. The company, which holds monopoly to cigarette production in Bulgaria, has long been under a privatization procedure, but this has been marred by controversy and a sale has constantly been failing to transpire. The present government has vowed to finalize Bulgartabac's sale.
Holcim to close cement plant in Pleven by end-2011
Holcim Bulgaria, the local subsidiary of the Swiss Holcim Group, plans to close its cement plant in the northern city of Pleven by the end of next year, CEO Todor Kostov told local business daily Pari in an interview. The decision reflects the management opinion that the plant was too small and could not survive falling orders and production slumps. Holcim runs a bigger cement plant in Beli Izvor. The cement output and the revenues of Holcim Bulgaria fell by 48% y/y to 212,000 tonnes and by 58.8% y/y to BGN 28mn (EUR 14.3mn) in H1. The producer explained the deterioration with the decline in the construction activity in the country and the imports from Turkey.
Bulgaria’s Railways seek EUR 230 M loan from WB, EBRD
Bulgarian State Railways EAD is in talks with a number of banks, seeking a BGN 460 M international syndicated loan to help finance debt payments through 2014 and turn around the indebted company, the company chairman told Bloomberg agency.The group of banks include the World Bank, the European Bank for Reconstruction and Development, Deutsche Bank AG and UniCredit Bulbank AD.The funding would be linked to a five-year plan to make the operator profitable after posting losses for 20 years because of previous mismanagement and the recession, he said. "The amount is huge and it will probably be a syndicated loan lead by the World Bank and the EBRD," Vladimir Vladimirov said. "It is possible to reduce the borrowed amount after the reforms take effect." A World Bank team will visit the railway operator in the middle of September to discuss the 105-step turnaround plan and financing needs, he said. The loan will be used to repay debts to suppliers, to the railway maintenance company and to banks. The Parliament approved state guarantees for the loan, he said. The austerity plan would reduce costs through staff reductions, expand freight clients, diversify services and make prices more flexible, Vladimirov said. The company aims to increase its freight revenue by 19 percent in 2014 and passenger revenue by 24 percent. Deutsche Bahn AG, Germany's state-owned railway, and Rail Cargo Austria AG have shown interest in the Bulgarian railways' freight unit, which may be sold in two years, Vladimirov said. "Our aim is to stabilize the company in the next two years and to enter into a partnership with some of the major European carriers that are interested in operating in Bulgaria," Vladimirov said. "We are looking at options to set up a joint venture or fully privatize our freight unit." Selling property and about 4,000 old locomotives will also help cover the company's financial shortfall, Vladimirov said.
French GDF Suez set to enter Bulgarian energy market
The Romanian affiliate of the French electricity generation and distribution companyGas de France Suez (GDF Suez) has submitted an application for a license in Bulgaria. The news was reported during the Tuesday meeting of Bulgaria's National Electric Company (NEK). GDF Suez report they want to enter the Bulgarian market now because there are signs of recovery, but do not plan to sell electricity inside the country rather purchase electric power from local producers and offer it in Romania, Greece and Turkey. The trade would be carried out through the newly registered company GDF SuezEnergy Trading Bulgaria with headquarters in Bucharest, according to a report of Bulgaria's State Commission for Energy and Water Regulation (DKEVR). GDF Suez had presented its business development plan until 2014 to DKEVR, including electric power prices, but the energy watchdog had voiced some doubt because the latter were seemingly too low. “These are not electricity prices in Bulgaria, these are stock prices from forward deals in Germany, which is our determining market,” GFD Suez point out. A total of 27 companies have a license to trade electric power in Bulgaria, according to DKEVR registry. More than half of them have received their permits in 2007 with an expiration date of 2017. “The rules for the sale of electricity in the region are too diverse and are currently in the process of becoming unified. For this reason the arrival of GDF Suez on the Bulgarian market is very timely,” the DKEVR Head, Angel Semerdzhiev, is quoted saying.
UK JKX spuds Bulgarian wells
Britain's JKX Oil & Gas, the operator of the B1-Golitza license in Bulgaria, began on Thursday a two-well drill program in the country to test targets with an estimated resource of up to 60 billion cubic feet (Bcf). The Staro Oryahovo South R-1 well will be drilled to test a submarine fan target of Eocene age in the Kamchia Basin, south west of Varna, Bulgaria. Drilling is planned to complete by the end of September when the rig will move to the Shkorpilovtci South West R2 location, 5km to the south. JKX Oil & Gas signed at the end of May on a CCC-500 drilling unit throughWeatherford for two wells in Bulgaria's onshore B1-Golitza Block. The first well in the program, SOS, will test a potential 20-30 Bcf prospect at 1,500 meters, up dip of the depleted Stary Oryahovo gas field, discovered in the 1960s. Results of this well are expected in early October 2010. The second well, S54, will also be testing a potential 20-30 Bcf prospect at a depth of 600 meters with results expected by the end of the fourth quarter of 2010. Interests in the B1-Golitza block are held by JKX (40%), Balkan Explorers (Bulgaria) Limited (a 100% subsidiary of Aurelian Oil and Gas PLC) (30%) and SorgeniaInternational B.V.
EVENTS:
Modern Korean art on display in Sofia
The Korean contemporary art exhibition "Floating Hours: Moon is the Oldest Clock" is currently on display at the National Gallery for Foreign Art in Sofia. The exhibition to celebrate the 20th anniversary of Korean-Bulgarian diplomatic ties is being presented jointly by the Korea Foundation and the Korean National Museum of Contemporary Art. The display will run until Sept. 5. The exhibition consists of pieces from an exhibition originally held at the Deoksugung Art Museum in May. The artworks were re-arranged to suit the gallery space in Bulgaria. "The exhibition focuses on the feelings evoked by the flow of time, reminding us of nature's own pace, delicately and endlessly flowing in contrast to speed-oriented human world," explained Kim Byung-kook, the president of the Korea Foundation, as quoted by korea.net. Bae Soon-hoon, the director of the National Museum of Contemporary Art, said, "The 25 art works from nine well known contemporary artists in Korea, including Paik Nam Jun, Park Hyun-ki, Kang Ik-joong, and Han Eun-sung, include a selection of paintings, sculpture, video, and installation art to showcase the art world of Korea, and how these artists respond to the flow of time."