Russian President Putin initiated the adage that Bulgaria is guilty of stopping the South Stream from happening. Bulgarian politicians at various levels have never seriously contested the story and kept on repeating that the country has missed a great chance. Putin rarely engages personally in his hybrid warfare. The South Stream’s Bulgaria case was such – the stakes were high, and he did not want to let Russians believe that the annexation of Crimea and the ensuing sanctions are the real reasons behind the project’s fiasco.
Bulgaria was indeed unable to secure Kremlin’s plans on South Stream as a 100 percent dedicated to Russian gas flows – but there has not been a trace of any single act or document, that would attest Sofia’s role in halting the project. Putin’s fake story aimed to hide the real culprits behind and his input for the demise of his pet project, after having spent more than $ 20 billion for onshore works on Russian soil without result or purpose.
What blocked the South Stream was the inability of the Gazprom to control the costs of the project and to raise investment funds on the capital market.
The costs. Gazprom is notorious for lavish spending and project cost overruns. The South Stream gas pipeline made no exception. Two months before the famous Ankara project termination statement by President Putin, Gazprom’s project cost estimate rose by 7.5 billion euros above the original estimate of $ 16 billion. The price tag on the maritime part alone hiked from $ 10 to 14 billion.
Project cost control has never been Gazrpom’s forte.
Then came the US and EU sanctions for the annexation of Crimea, a prima facie instance of personal Putin responsibility. Gazprom had to cancel two tenders for capital funding at a much lower level – $ 200 million and $ 300 in October of 2014 due to a lack of interest from EU banks.
This explosive mix of higher and uncontrollable costs plus difficulties to raise the necessary financing meant only one thing – the Italian company partner of Gazprom in the project – Eni – had to provide more funds and quicker. Deliveries through Ukraine were several times cheaper, which undermined the economic rationale that Eni’s management needed to substantiate the South Stream funding before its shareholders.
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All these facts lead to a critical meeting between the CEO of Gazprom – Alexei Miller and the CEO of Eni – Claudio DeScalzi on November 24th, 2014, in Sochi, just a week before President Putin the announcement on the cancellation in Ankara. This meeting produced the obituary to the South Stream project as the Italian side refused to increase its funding share from $ 600 to $1 billion and provide the necessary guarantees in mandatory long-term gas purchase agreements.
For all practical purposes – the project, already in a coma, was declared clinically dead at that Sochi meeting.
Later on the evening of November 24th, Alexei Miller met with President Putin, wherein all likelihood the decision to pass on the blame to Bulgaria and its Government was taken.
The Putin fake story is so widely spread that even Bulgarian top politicians are readily sharing it.
Because the country is the weak link in the EU and NATO’s collective systems and Bulgarian politicians would not dare openly challenge and call President Putin a liar.
The fake narrative is so often used in Russian propaganda spreading the story of the billions in lost gains and the ‘Good Mr. Putin’ vs. the ‘Bad West.’
Had Gazprom or the Kremlin been able to present evidence for the guilt of Bulgaria for the termination of the South Stream project, there is little doubt they would have used to claim compensation before Arbitration courts as they have often done in the past.
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