Serbia's NIS to take regional energy lead
by Aleksandar Vasovic
Serbian oil monopoly Naftna Industrija Srbije (NIS), majority held by Russia's Gazprom Neft, is planning to take the
lead in regional fuel production and exports, a top company official said.
"As of 2012, production will be expanding," Kiril Kravchenko, a Gazprom Neft-appointed CEO of the NIS, said. "We will
have 50 % of our production slated for exports... we will try to make Serbia a base for exports to the region and
elsewhere."
In February, Gazprom Neft paid EUR 400 mm ($ 529.4 mm) for a 51 % stake in NIS and pledged additional investment of
EUR 547 mm, as part of a wider energy deal between Serbia and Russia. NIS holds a monopoly on crude oil processing in
Serbia and it owns the country's only two refineries.
Kravchenko said the new company's leadership "will be seeking diversification of Serbia's crude oil supplies".
NIS and the government are said to negotiate the rise of fuel prices this month. Earlier, NIS invited bids for the
purchase of processing machinery for the Pancevo plant, its first investment after the takeover by Gazprom
Neft.
The company would not immediately invest in the other refinery in Novi Sad which had newer technology, Kravchenko
said.
The Russian company was also considering whether it should buy a controlling stake in the Petrohemija chemical plant
which is a part of Serbia's oil industry to settle a $ 70 mm NIS debt or "seek other ways of debt
restructuring".
"Petrohemija facility is (technologically) linked with the Pancevo oil refinery... we have to discuss this with the
Serbian side," Kravcenko said.
The NIS envisions 2008 unaudited revenues of about dinars 3 bn (EUR 3.2 mm) while audited figures will be announced
on June 1. Under a bilateral energy deal in December, Serbia and Russia also agreed to develop part of the South
Stream pipeline to transport natural gas via Turkey, Bulgaria, Serbia and then on to European markets, bypassing
Ukraine.
Like other European countries reliant on Russian gas deliveries, Serbia was also hit hard during the January gas row
between Ukraine and Russia and the pipeline is expected to help Serbia diversify its gas supplies.