Experts: Serbia “defending” Naftna industrija Srbije according to Bulgarian model

With changes in the management of Naftna industrija Srbije (NIS), the company’s co-owners, Russia’s Gazprom and the Serbian government are trying to find a solution for Lukoil based on the “Bulgarian model” for the sanctions imposed by the US Treasury Department’s Office of Foreign Assets Control (OFAC) against Russian companies, but there is little chance that this will be accepted, experts assessed for Beta.

– Serbia is moving towards a Bulgarian solution in resolving the problem of US sanctions against Russian companies. The government has announced changes in management for NIS, just as the Bulgarians did in Lukoil, which has a retail network and refinery in that country, so the local government appointed a special administrator for that company – said energy consultant Zeljko Markovic.

Serbia, as he stated, plans to use changes in the management structure to gain time until it finds a solution for Gazprom’s ownership of NIS. He pointed out that the move might help to lift the sanctions, which had been in effect since October 9, but that he did not believe that it would satisfy America.

Serbian President Aleksandar Vucic said two days ago that “today or tomorrow, together with the Russians and some others that the Russian side will find, he will send a letter to OFAC for exemption from American sanctions because we have started to resolve the issue of management.” Vucic said that he expected an answer from OFAC whether they accepted, within a period of one, two or three months, to exempt Serbia from sanctions. He added that the NIS Refinery in Pancevo “can maintain operation until November 20 or a few days more.”

Stock market expert Branislav Jorgic said that he assumed that Serbia was taking the same steps as Bulgaria to resolve Russian ownership in companies operating in the territories of those two countries.

– The first step is a change of management, and the second, probably the expulsion of the Russians from the ownership of NIS, with or without their consent – said Jorgic.

He added that the change in management itself would not satisfy the Americans, and even if they accepted Serbia’s request, it would probably be a short period of time before the Russians were eliminated from the ownership of NIS.

– The difference between the situation in Serbia and Bulgaria is that the sanctions were announced for Serbia back in January, and for Bulgaria recently, which means that Serbia had enough time to find a solution – said Jorgic.

In the ownership structure, Gazprom’s company Gazprom Neft owns 44.85%, the Republic of Serbia 29.87%, Gazprom’s daughter company Intelligence 11.3%, and other minority shareholders own 13.98%.

NIS a.d. Novi Sad

Naftna industrije Srbije ad Novi Sad

US Treasury Department Office of Foreign Assets Control

OFAC

Gazprom

Gazpromneft

Intelligence

Željko Marković

Aleksandar Vučić

Branislav Jorgić

Pančevo oil refinery

NIS sanctions

NIS operations

NIS nationalization

sale of NIS