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Serbia has no reason to nationalize the NIS

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Serbia has no reason to nationalize the Oil Industry of Three Serbia (NIS), unless the European Union threatens sanctions on Serbia for doing business with a Russian company, according to  economic analyst Bogdan Petrovic . According to him, until it is clear whether there is a threat, we should not even think about it.

“If the EU introduces a total blockade of oil trade with the Russians, it will ‘hook ‘ us . Why would they nationalize NIS only then, again the problem is where to get that oil. That doesn’t mean that NIS must be nationalized,” Petrovic told The new economy.

Petrovic adds that the nationalization of NIS would mean two big problems.

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He reminds that the state, while it was the majority owner, showed that it does not know how to manage NIS, and that again, if it managed that company itself, it would risk making new losses.

“NIS is currently part of a large oil company and they have coverage from the motherland for possible failures, so our state does not bear potential losses. Until a concrete and unambiguous reason for nationalization is seen, this should not be discussed,” our interlocutor added.

However, a few weeks ago, a situation occurred in Germany in which the Russian company Gazprom Germania was nationalized. Petrovic says that the main difference in relation to NIS is that Russia does not have a processing and sales network in Germany, as is the case in Serbia.

“In Germany, where there is a lot of competition from various private companies in the sector, Gazprom operates only in the area of ​​gas infrastructure and storage, and is not the only serious player. they do not have oil refining “, reminds the interlocutor of our portal.

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According to him, if some sanctions are imposed on NIS by the West, our state should take some steps only then, depending on what those sanctions will be .

For now, as he reminds, the possibility of denying Serbia the supply of oil from the Adriatic oil pipeline JANAF has disappeared, although there was a danger that the supply of the refinery in Pancevo would be interrupted from May 15.

Regarding another option for NIS, the Demostat portal reported some time ago that Azerbaijan is ready to take over the company.

“Maybe the Russians, if they think it’s not going well, will decide to sell the company to someone; that company may be a cover to avoid the effect of sanctions, from which they may later repurchase that company,” our interlocutor added.

As Petrovic explains, this means that the Russians may have a “player” who will enable them to temporarily “withdraw” from Serbia, after which they would eventually return when the sanctions take effect.

“Our state can pay for the nationalization of NIS only at the price of increasing public debt. For the purchase of NIS, Gazprom needs to pay at least one billion, and probably much more, and we have a high level of public debt. In addition, it means a large outflow of foreign currency from the country in a situation when we have a huge problem of maintaining the dinar exchange rate “, adds Petrovic.

In addition, the violent change of ownership of NIS entails potential problems with gas supply. Gazprom is currently selling six million cubic meters of gas to Serbia, which it pays for at a preferential price of 270 dollars for 1,000 cubic meters, and the rest at a market price that is four to five times higher. That could be an additional problem in case NIS is nationalized, because the Russians could ask for a higher price of gas.

“Currently, the Russians cost us about at least three million dollars a day, or more than 100 million a month (depending on the price on the stock exchange). So, in six months we have saved over 600 million dollars in relation to the price of gas on the spot market. “, reminds Petrovic.

That is why the topic is very complex, and the nationalization of NIS would be feasible only if the Russians ask Serbia to do so, otherwise we will have big problems.

Serbia has not imposed sanctions on Russia, but recently voted in the United Nations General Assembly to suspend Russia from the Human Rights Council. After that, it was announced that NIS will still be able to receive oil from the JANAF oil pipeline from May 15.

The EU continues to buy oil and gas from Russia, but there are more and more announcements that it will find a replacement for the energy it imports from the largest country in the world.

Russian state giant Gazpromneft owns 51% of NIS shares, and the minority stake is in the hands of the Serbian government.

According to Demostat, the transfer of NIS to the ownership of the Azerbaijani state oil company SOKAR would satisfy the plans of both Moscow and Washington. 

“If Gazpromneft sold NIS to an Azerbaijani company, on the other hand, it could compensate through business arrangements with SOKAR,” the interlocutor of Demostat explained at the time.

On the other hand, that would suit the United States, because Azerbaijan is said to be its ally.

SOKAR owns two oil refineries and a gas plant in its home country, a chain of gas stations in Azerbaijan, Georgia, Ukraine, Romania and Switzerland, and employs about 61,000 workers.

SOKAR is the largest shareholder with a 58 percent stake in the Trans-Anatolian Gas Pipeline (TANAP) and has a 20 percent stake in the Trans-Adriatic Pipeline.

If there should be a change in property relations in NIS, the best option for the Government of Serbia is for another foreign company to take over the majority package from Gazpromneft, Demostat reported.

His source said that Azerbaijan is already in contact with the Government of Serbia regarding current issues related to NIS, Nova Ekonomija writes.

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