Photo: Ministry of Mining and Energy
As the United States, which imposed sanctions on Serbian oil company NIS, rejected a proposition for a change in management, difficult decisions are ahead, according to Minister of Mining and Energy Dubravka Đedović Handanović. The government in Belgrade is holding an emergency meeting tomorrow, she added and pointed out that it needs to decide whether to nationalize the business. NIS runs the country’s only refinery.
US sanctions against Serbian oil refiner and fuel distributor NIS – Naftna industrija Srbije came into force on October 9, after they were postponed several times for nine months overall. Its majority owner is Russian state-controlled Gazprom, through two subsidiaries.
The Government of Serbia didn’t succeed in securing any kind of deal that could enable a smooth transition. The company owns the only refinery in the country and the biggest chain of service stations.
Minister of Mining and Energy Dubravka Đedović Handanović said the US rejected NIS’s proposal of a contract for a change in management. “The difficult message for us is that we didn’t even get one day for Naftna industrija Srbije to continue working. Citizens, you understand that it is impossible to change ownership in seven or eight days,” she stressed, apparently referring to how long the refinery’s dwindling oil reserves would last.
There was speculation earlier that Hungary-based MOL could assume control, given that the country, Serbia’s northern neighbor, managed to obtain a one-year exemption from the US for Russian oil and gas.
US demands Russia’s complete exit from NIS
The US administration wants a complete exit of Russian ownership from NIS, according to Đedović Handanović. “There can be no hiding of any Russian associate, Gazprom or the Russian government behind that,” she added.
There is only approval for talks about a change in ownership and it expires on February 13, the minister explained.
“I believe that there are difficult decisions ahead of us. Namely, whether to conduct a takeover of the company, after which the damages would be determined and compensated. I know that President Vučić is against nationalization, as are many of us in the Government of Serbia and beyond and we repeated that several times,” Đedović Handanović stated.
Đedović Handanović: We hope that our Russian friends will understand the gravity of the situation
An emergency cabinet session is scheduled for tomorrow at 11 am local time, she announced and revealed that President Aleksandar Vučić would attend it.
“What I can tell you is that we won’t let our country come into jeopardy and that some of the most difficult decisions in our history are ahead of us in the following days. We hope that our Russian friends will understand the gravity of the situation and that they will help us overcome it. Because without any fault of our own, we have found ourselves in a dire situation. A political war is at hand, a geopolitical war is at hand, and we, as a small country, need to pay a high price. A small country that only wanted to be fair and just to everyone. Both to all our partners and all our friends,” Đedović Handanović underscored.
Oil crisis could turn to gas crisis
To make matters worse, Serbia is dependent on Russian gas, which comes via the Balkan Stream pipeline, an extension of TurkStream. The main question is whether the Kremlin would slash or even end the supply in case NIS is nationalized. Serbia is buying gas under short-term arrangements since May.
Furthermore, Lukoil, which operates a gas station network in the country, is also under US sanctions.
Be the first one to comment on this article.