Serbia - a country in Southeast Europe - has just announced its readiness to pay a high price to buy back the shares that Russian oil and gas giant Gazprom is holding in oil and gas company Naftna Industrija Srbije (NIS). This is a step to find a way to rescue the NIS from US severe sanctions.
NIS is one of the largest vertical integrated energy systems in Southeast Europe. The company's main shareholders are Gazprom Neft (44.85%), Gazprom (11.3%) and the Serbian state (29.87%).
Serbian President Aleksandar Vucic said that NIS owners are negotiating with investors from Asia and Europe who could take over the company.
If they dont agree on the price, my proposal is to offer a better price. We are ready to pay more than 56% of the shares that Gazprom is holding at market prices, Vucic said.
The risk of oil shortages in Serbia is becoming urgent. The sanctions, effective from October 9, have cut off crude oil supplies through Croatia, putting the NIS at risk of oil drought in just the next few days.
President Vucic and Finance Minister Sinisa Mali warned that this could have serious consequences for Serbia's economy and credit rating. No matter the price, we will find a way to have enough money, the President affirmed.
The state's acquisition of NIS will require negotiations with international financial institutions and may require budget adjustments to ensure capital sources. However, Mr. Vucic emphasized that the goal is to avoid confiscating or naturalizing the company.
Russian shareholders are the main owners, they have the right to decide, but we also have the right to live, Vuvic said at a government meeting on November 16.
Serbia took Bulgaria's decision last week to take over Russian oil and gas giant Lukoil's refinery as an example, as it also faces US sanctions to protect its domestic market.
NIS stocks have been suspended since January, after the US Office of Foreign Assets Control (OFAC) announced sanctions. The sanctions were imposed last month after repeated delays to create an opportunity for negotiations to transfer control from Russia to a third party.
Russian owners have applied for an extension of NIS's license from the US, but Washington has refused, asking Russia to completely withdraw from the company.
This is part of President Donald Trump's Administration's extensive campaign to increase pressure on the Russian oil and gas industry and force President Vladimir Putin to participate in negotiations to end the Ukrainian conflict.
