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Serbia mulls «taking over» mainly Russian-owned oil company

President Vucic said Serbia may have to temporarily «take over» the mainly Russian-owned NIS oil company while Western sanctions on Russian energy are in force - but promised not to «steal» anything

Serbia mulls «taking over» mainly Russian-owned oil company

Belgrade, July 15 - Neftegaz.RU. According to BalkanInsight, Serbian President Aleksandar Vucic said that Serbia wishes to «talk to the Russian» about the Oil Industry of Serbia, NIS, which is majority-owned by 2 Russian energy companies, and if need be «take over», while EU sanctions against Russian oil companies are in force.

Serbia sold 51 % of its only oil company, NIS, to Russia’s energy giant Gazprom in 2008, for what critics said was a bargain price of €400 million, plus the promised investment of €550 million.

Vucic said on Wednesday that, besides rising prices on world markets, «a big problem is whether our refinery can get spare parts because it is under sanctions because the Russians own and manage it, and another problem is that some intermediaries and buyers of Iraqi oil do not want to work with those who are [in] majority-Russian owners[hip]».
Vucic told Pink Television in an interview:
  • Until now, we have solved these problems, we will see how we will solve them in the future, to talk with the Russians, if, God forbid it, becomes necessary – because we will not steal anything – to make back-to-back contracts, firm contracts, while it [EU sanction regime] lasts, to take over, when the sanctions are lifted, you take over and so on
  • But, that is only if we have to because we will not steal anyone’s property
Gazprom, which is not under EU sanctions, owns 6.15 % of NIS but its subsidiary, Gazprom Neft, which is under sanctions, but which have a Western Balkans exception clause, owns 50 %.

Most crude oil that Serbia imports arrives via the Croatian oil pipeline operator, Jadranski naftovod, JANAF, pipeline and it mostly comes from Russia and Iraq.
Serbia’s Security of Supply Statement for 2020 said NIS’s crude oil covers 25 % of the country’s total needs.

Together with growing pressure to choose between its traditional ally Russia and its EU aspirations since the start of the war in Ukraine, Serbia has faced a headache over NIS’s ownership structure since the EU imposed sanctions on Russian energy.

In its 6th package, the EU imposed an embargo on imports of oil and refined oil products from Russia.
It also prohibited EU operators from «insuring and financing the transport, in particular through maritime routes, of oil to 3rd countries» after a grace period of 6 months.
These sanctions have some exceptions and delayed deadlines, however, for countries like Bulgaria, Croatia and the Czech Republic.

When the EU imposed a 4th package of sanctions on March 16, it bound its members not to «engage in any transaction with … a legal person, entity or body established outside the Union whose proprietary rights are directly or indirectly owned by more than 50 %», by several companies, including Gazprom Neft.

This affected NIS, given that Gazprom Neft at the time held 56.15 % of the shares.
However, the EU’s 5th package excluded from the ban any «member of the European Economic Area, Switzerland, or the Western Balkan».

Author: Milica Stojanovic

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