RPT-FEATURE-Russia kindles flame of hope in Bosnia refinery

By Daria Sito-Sucic

BOSANSKI BROD, Bosnia, Jan 5 (Reuters) - A flare at the top of a 50-metre high tower in the Balkans shows Russia building political capital in a notoriously fractured part of Europe.

The flame in late November marked the restart of operations in Brod, Bosnia's sole oil refinery which had been out of action since 2005 after being seriously damaged during the 1992-95 war.

It was financed by Russia as part of a broad plan to invest in energy in the countries of the former Yugoslavia.

Bosnia has reportedly received about $14 billion in aid since the end of the 1992-95 war, and Russia's 200 million euro ($280 million) investment in the refinery is a small gesture in the context of European energy security.

But in a country where around 40 percent of people are registered unemployed, new refinery owner Russian state oil company Zarubezhneft offers a much-needed boon: hope for neglected local industries, and the prospect of future revenues.

"The refinery means life for all of us here," said worker Momir Grabovac, standing near the shiny silver pumps in a reconstructed part of the refinery. Rusty containers in the background still bear the marks of wartime shelling.

"The town, which was dead, breathes again," Grabovac added, saying that of the 4,000 people with jobs in Bosanski Brod's population of 25,000, one in four had worked there.

Financed by a 350 million euro loan from the Russian Development Bank, the investments in the refinery as well as a motor oil plant in the town of Modrica and the Petrol distribution chain have lifted hopes Bosnia can trim its 8.8 billion marka (4.4 billion euro) foreign trade deficit in coming years.