N1: Meeting between Putin and Vucic to determine fate of NIS

A decade and a half since its sale, Naftna Industrija Srbije could once again become state-owned, due to the U.S. sanctions against this Russian company which have been announced by the president of Serbia for the past month, and which the U.S. administration has so far been silent about.

Only one document is needed, claims the president of Serbia. This document contains one or two things that are unknown for Serbia, about Russia’s share in NIS and the deadlines, that is, the time from which the U.S. sanctions would be in effect.

– Would the sanctions against NIS remain if the Russians had, for example, 40 percent of the ownership or are they asking for them to have zero percent ownership? Or they are asking for them to have 10 percent of the ownership. That is the question for us. There will certainly be sanctions if they have a majority ownership, that we know – said Aleksandar Vucic, the president of Serbia.

The Russian state company Gazprom Neft, with 50%, and its umbrella company, Gazprom, with 6%, have a majority share package.

Serbia has more than 29%, whereas the remaining shares belong to small shareholders.

– Something that’s been mentioned as the only salvation for NIS is for Serbia to buy out the Russian part of the ownership of NIS. What we lack again there are official data, an analysis of how much money that would amount to in fact and another thing that remains open is for Serbia to in fact sell that Russian part to some third party – says Dunja Maric, a journalist of Nova Ekonomija.

Of course, Moscow has a say in all this.

– What is their interest? Perhaps their interest could be to show the rest of the world what their enemies act like. Perhaps their influence in these areas would increase if the U.S.A. sanctioned the Republic of Serbia – believes Milos Zdravkovic, an energy expert.

In 2008, Russia bought a majority package of NIS for EUR 400 million without a tender, in direct negotiations. The then authorities, the Democratic Party and the Democratic Party of Serbia, claimed that that was as much as could be achieved.

What can be achieved now also depends on Moscow, which has so far only confirmed that they would promptly arrange a meeting between Putin and Vucic to discuss precisely the fate of NIS. The money is there, claims the finance minister.

– The budget can withstand that pressure? The budget can, it’s interesting that we have that money – said the minister of finance, Sinisa Mali.

In December, according to the brokers’ assessment, the value of NIS dropped below EUR 1 billion.

How much has to be set aside from the state budget now will primarily depend on whether it’s a majority share or the whole share that the Russian company has in NIS.

Vlada Republike Srbije

Predsedništvo Republike Srbije

Ministarstvo finansija Republike Srbije

NIS a.d. Novi Sad

Government of Serbia

president of Serbia

Ministry of Finance

Naftna industrija Srbije

Gazprom Neft

president of Russia

Aleksandar Vučić

Vladimir Putin

Dunja Marić

Miloš Zdravković

shares of NIS

majority share package

US sanctions

energy sources