Representatives of Hungarian oil and gas company MOL Group began a site visit on January 5 to the Pančevo Refinery and other key facilities of Serbia’s Oil Industry (NIS), Radio Free Europe/Radio Liberty (RFE/RL) has learned.
This marks the first visit by MOL officials to the Pančevo refinery since the announcement several months ago that NIS is up for sale.
As previously stated by Serbia’s political leadership, MOL is interested in acquiring the Russian-owned stake in NIS, which has been under U.S. sanctions since early October last year.
Due Diligence Process Underway
On Monday morning, MOL representatives toured NIS fuel stations across Serbia, while a Hungarian delegation at the Pančevo refinery held meetings with refinery management and senior NIS officials.
The visit by Hungarian experts was announced about ten days ago and is part of MOL’s interest in conducting comprehensive due diligence ahead of a potential acquisition. This process includes legal, financial, and technical assessments of NIS operations.
At the Pančevo refinery, expert-level meetings are ongoing, during which technical data on equipment and production processes are being presented to the potential buyer.
Vučić: Key Contract Terms Expected by January 23
Serbian President Aleksandar Vučić stated on January 2 that he expects the main elements of a potential agreement between NIS and MOL to be finalized by January 23.
Sanctions and Ownership Structure
On October 9, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) began enforcing sanctions against NIS due to its ownership structure, which includes Russia’s state-owned company Gazprom Neft. According to Washington, the goal is to prevent Russia from using energy revenues to finance the war in Ukraine.
The U.S. condition for lifting sanctions on NIS is the removal of Russian ownership.
Currently, Russian entities control 56.15% of NIS shares, including Gazprom, its subsidiary Gazprom Neft, and the St. Petersburg-based company Intelligence. The Serbian state owns 29.87%, while just under 14% is held by minority shareholders.
Refinery Shutdown and Temporary U.S. License
Due to the oil import embargo and the inability to import crude oil, the Pančevo refinery—the country’s only refinery and NIS’s most important facility—was shut down on December 2.
On January 1, NIS announced that the U.S. Treasury had issued a special license, allowing the company to resume operational activities until January 23.
Background of the Sale
NIS was sold to Gazprom in January 2008 as part of a Russian-Serbian intergovernmental agreement on cooperation in the oil and gas sector, for €400 million.
So far, no official information has been released regarding the current market value of the Russian-owned stake in NIS.
