Energy drama in Serbia: Dispute over Pancevo refinery, NIS negotiations stuck - Expert explains!

Pancevo refinery; Photo : Emilija Jovanovic

Financial consultant Vladimir Vasic assessed today that the 10-day deadline extension that the US administration (OFAC) has given for negotiations on the sale of the Russian share in Petroleum Industry of Serbia, NIS, is not enough to complete those negotiations (between Serbia and Hungary's MOL) - because they are "stuck" on whether the Pancevo refinery will continue to process oil, and to what extent.

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Vasic expects that the deadline for negotiations will be extended again if everything is not completed by June 16, because he believes that it is in everyone's interest to complete this transaction.

"I don't even think the price is as important right now, it's important whether oil will be processed (in Serbia) or not. We have some indications that anyone who is buying strategically is looking to use their existing capacities, and we know that MOL already has several refineries, in Croatia, Slovakia, and in Hungary. It's in our interest that over 4 million tons of oil get processed in the Pancevo refinery because then you have strategic raw materialw and influence the flow of oil and oil derivatives," this expert told Tanjug.

Commenting on the US OFAC extending the deadline for negotiations regarding NIS until June 16, when the license that allows NIS to operate under US sanctions also expires, Vasic said that this deadline of 10 days indicates that there are problems in the negotiations that have not yet been resolved, and that this deadline is a type of pressure.

According to him, the OFAC wants to speed up the negotiations by setting a deadline of 10 days to finalize everything.

Asked whether Serbia has enough negotiating power to impose its conditions on the future majority owner of NIS, Vasic said that Serbia must protect its interests, which is why he insists on increasing the state's share in the company in order to gain greater control, as well as on the operations of the Pancevo refinery, at its full capacity.

"We have a refinery with a 4.8 million tons of oil processing capacity. Serbia needs about 4 million, so there is room for some export of derivatives and that can be a strategic opportunity," he added.

Asked whether a new round of negotiations would follow if the talks with MOL fail, or if space would open up for other buyers, Vasic stated that the best thing would be for Serbia to buy the Russian stake in NIS, and then for the state to expand that business regionally.

(Telegraf Biznis/Tanjug)