Serbian businessman Bogoljub Karic has announced his readiness to join negotiations on the purchase of a Russian stake in Naftna Industrija Srbije (NIS) and offer about EUR2bn for it, the telegram channel “Serbian Economist” reported. His appearance among potential buyers may change the configuration of the fight for Serbia’s largest oil and gas company.
According to Serbian media, Karic said that a group of local industrialists is ready to submit an offer “which is not being refused”. Serbian President Aleksandar Vucic, Russian President Vladimir Putin and the management of the company itself have been notified of the intention to buy out NIS shares, he said. Karic also claims that the Russian side has received the relevant letter of intent.
Vucic, commenting on the initiative, reacted with irony, saying that Serbia had “already found two people with two billion euros” and expressed hope that the funds would be invested in the country’s economy. Earlier Reuters reported that a little-known Serbian group Senator had applied to OFAC to buy a Russian stake in NIS for $2.35bn.
The issue of the future of NIS has escalated against the backdrop of US sanctions pressure on Russian energy assets. Washington demands the withdrawal of Russian shareholders from the Serbian oil company, and the deadline for completing the deal is set for 22 May. At the same time, any agreement will require not only the consent of the existing shareholders and the Serbian authorities, but also the approval of the Office of Foreign Assets Control of the US Department of the Treasury – OFAC.
In parallel, Belgrade is negotiating with Hungary’s MOL. Earlier, MOL signed an agreement to buy the Russian stake in NIS, and the Serbian authorities, for their part, are seeking additional guarantees for the operation of the Pančevo refinery, the only refinery in the country. The stability of its operation and supply of fuel to the domestic market remain the key conditions for Belgrade.
Currently, Gazprom Neft remains the largest shareholder of NIS with a stake of about 44.85 per cent, while another 11.30 per cent belongs to a structure linked to the Russian side. The Republic of Serbia owns about 29.87 per cent of shares, the rest of the securities are held by minority shareholders.
Karic’s going public strengthens the intra-Serbian scenario around NIS. If earlier the Hungarian MOL was named as the main contender, now the possibility of transferring the Russian stake to the Serbian capital is being discussed. However, this option remains complicated: it depends on the position of Russian shareholders, the Serbian government, the US sanctions procedures and the willingness of new investors to ensure not only the price of the deal, but also the sustainable operation of the entire oil infrastructure of the country.
NIS is the largest oil and gas company in Serbia. It is engaged in oil and gas exploration and production, oil refining at the Pančevo refinery, wholesale and retail of petroleum products, and operates a network of petrol stations in Serbia and the region.
Bogoljub Karic-Serbian entrepreneur, one of the country’s best-known businessmen of the 1990s and 2000s. His business interests have historically been in the banking sector, construction, telecommunications and industrial projects.