Negotiations between Government of Serbia and "Gazpromneft" - proposal for partial import of derivatives

The Government of Serbia and "Gazpomneft", the majority owner of "Petroleum Industry of Serbia", are negotiating on gradual lifting of the ban on import of oil derivatives, which is supposed to take place on January 1st, 2011.

Light liberalization that implies lifting of the ban and introduction of mechanisms that would not allow completely free import of fuel would suit NIS. In that way, the state would help Russians because the modernization of refineries, which should make it possible for NIS to become regionally competitive, will be finished in mid-2012.

As we learned from unofficial sources, the representatives of both the Government of Serbia and "Gazpromneft" agree that the Regulation governing the terms and methods of import of oil, that is, oil derivatives, which anticipates lifting of the ban on import of fuel on January 1st, 2011, must be obeyed. In this way, Serbia will act in accordance with the suggestions of European Union and the CEFTA Agreement on liberalization of the oil derivatives market. Protocol on basic terms of sale of NIS to "Gazpromneft", an integral part of the interstate Agreement on cooperation between Serbia and Russia in field of oil and gas, deals with this problem as well.

The agreement and the protocol were signed in December 2008 in Moscow, and that is why there is a deadline of two years, which coincides with the lifting of the ban at the beginning of year 2011. But Russians entered NIS in February 2009 and, thus, the precious time was lost. The contract on modernization of the refinery in Pančevo was signed yesterday and it is going to be put in effect prior to summer 2012, so that NIS will not be ready for competition before that time.

NIS a.d. Novi Sad

Vlada Republike Srbije

Gazprom Moscow

Petroleum Industry of Serbia

Gazpromneft

CEFTA

Agreement on cooperation between Serbia and Russia in field of oil and gas

Moscow