Serbia's NIS to invest $ 740 mm in refineries by 2012
NIS, Serbia's largest refiner and fuel retailer, majority owned by Russian group Gazprom Neft, said it would invest $ 740 mm to complete the overhaul of its refineries in 2012. NIS Chief Executive Kiril Kravchenko said the project would enable the company to harmonise the quality standards of the fuels it produces with those in the European Union.
"The main benefit of this project will be in the complete transfer of NIS production to Euro-5 standard and phasing out of the production of lower-standard fuels, which are no longer used in the EU," Kravchenko said.
He added that NIS expected the Serbian government, its second-largest shareholder, "to fulfil the obligations... related to the maintaining of the current requirements regarding quality of petroleum products".
The Serbian government in January increased the duty on fuel imports and lowered it for domestically produced fuels, which prompted complaints from fuel traders that it would create unfair competition and push up retail prices.
NIS has held a monopoly in oil processing since 1999, when NATO bombing heavily damaged its two refineries. The monopoly, approved by the government to give NIS time to recover and become competitive, expired in January when the government cancelled price caps on gas, diesel and heating oil.
Gazprom Neft paid EUR 400 mm ($ 533.8 mm) last year for 51 % of NIS as part of an energy pact between Serbia and Russia.
The Serbian government holds 29 % of NIS. The remaining 20 % belongs to former employees and about 4.8 mm citizens, who got shares as a part of a government plan to distribute stock in public companies.
Gazprom Neft earlier said it was mulling an acquisition of another 19 % stake in NIS at EUR 4.8 per share and would launch the offer as soon as it got approval from Serbia's Security Commission.