Serbia calls sale of Oil Industry of Serbia to Gazprom a mistake

BELGRADE, 27 Sep – PRIME. Deputy Prime Minister and Minister of Mining and Energy of Serbia Zorana Mihajlovic said that the sale by the Serbian state of a controlling stake in the Oil Industry of Serbia (NIS) to the companies of the Gazprom group in 2008 was a mistake, and called for the implementation of EU energy directives.

The Deputy Prime Minister is attending the 14th Energy Community Oil Forum, the European regulatory body, in Belgrade on Tuesday.

“The strategic goals in the oil sector are to ensure a reliable supply of energy and energy carriers, while developing an appropriate energy market through the application of European directives. We made mistakes in the past, first of all, when we sold our company to Gazprom in 2008,” Mikhailovich quotes the press service of the Ministry of Energy.

She pointed out that Serbia last year approved a legislative framework in the field of energy and mining, which ensures full harmonization with the provisions of the Third Energy Package of EU legislation and certain points of the EU package “Clean energy for all Europeans”.

“In the fifth package of EU sanctions against the Russian Federation, thanks to exceptions, unimpeded supply through the Adriatic oil pipeline (JANAF) is possible. The sixth package states that after November 1 we will no longer be able to receive Russian-made crude oil, but the possibility remains for the purchase of all other types of crude oil on market,” the Minister of Mining and Energy of Serbia noted, earlier she reported that Russian raw materials would replace oil from Iraq and other countries.

Serbian President Aleksandar Vucic said on September 14 that the mineral extraction tax (MET) for hydrocarbon production by Russian companies in Serbia cannot be raised above the current 3% without terminating the contract with the companies of the Gazprom group, which would entail consequences. According to him, the severance tax in the amount of 3% is now paid for hydrocarbon production in Serbia, “which is almost gone,” but changing the terms of the contract would be its violation and grounds for termination.

In January 2008, Gazprom Neft signed an agreement to acquire a controlling stake (51%) in the state-owned Oil Industry of Serbia (NIS-Gazprom Neft), one of the largest vertically integrated oil companies in Central Europe. In May of this year, Gazprom Neft reduced its stake in NIS from 56.15% to 50% on the Belgrade Stock Exchange, and the parent company Gazprom became the owner of 6.15% of the shares. A 29.87% stake belongs to Serbia, the rest belongs to smaller shareholders.

The main activity of the company is the exploration, production and processing of oil and natural gas, the sale of refined products, the implementation of projects in the field of petrochemistry and energy. Serbia has oil and gas fields, the Pancevo refinery, oil depots and a network of gas stations. According to the company, the contribution to the Serbian budget – the obligations of NIS on taxes and other government revenues in 2021 amounted to 217.8 billion dinars (about 1.8 billion euros), which is 21% more than in 2020.

In the northern part of the island of Krk in the Adriatic Sea, there is the port of Omišalj, where a terminal for receiving tankers with oil and oil products is located. The state-owned operator of the JANAF oil pipeline in Croatia announced on April 22 that it would continue to supply raw materials to NIS after being withdrawn from the EU sanctions package. In January, NIS signed a new annual contract with JANAF for the supply of 3.2 million tons of crude oil.