Entrance of State or New Strategic Partner for NIS – What’s a Better Option?

After the president of Serbia, Aleksandar Vucic, again mentioned the option of the acquisition of a majority control over NIS, many are wondering if it is feasible and what such a move would bring to Serbia.

Let us remind that, in May, the ownership structure in Naftna Industrija Srbije was already changed in favor of Gazprom, which got 6.15% of the shares of Gazpromneft, which is under sanctions, so now Gazpromneft has a 50% stake, so that NIS would not be affected by the sanctions from the west.

Bojan Stanic, the deputy director of the Sector for Strategic Analyses at the Chamber of Commerce of Serbia, says for eKapija that it all depends on how the situation is to develop further.

– Will the EU, within the new packages of sanctions toward Russia, include, for example, an embargo on companies in which there is more than 30% of Russian capital in the ownership structure? Nobody has said anything official in that sense yet, but if Vucic is mentioning this, he certainly has some information – Stanic says.

An in order for the company to be able to continue to function under those conditions as well, three options would possible:

– Either for Serbia to buy out a part of the ownership from the Russians, or for the Russians to fully exit, or for foreign capital to enter NIS.

When asked which option is the best, Stanic says that the best thing would be for a new strategic partner to enter NIS.

– Perhaps it would be best if it were Hungarian capital, because we have very good strategic relations with them in terms of both politics and economy. And it’s already been mentioned that MOL might be interested in taking over a share in NIS – Stanic says and adds that it is not unrealistic and that MOL has had plenty of cross-border investments.

For Stanic, taking over by the state is the final resort, because it would cost the budget a lot, although, of course, it would mean a lot for energy stability.

eKapija’s interviewee also says that it is possible for Serbia to take over, for example, 10% shares and for the Hungarians to take over as much.

And what would the Russians say to that?

– An agreement could be made for all parties to return the bought ownership stakes to the Russians when the crisis passes and if Russia signs some agreement with the West, which the highest state authorities have also already talked about – Stanic says.

He reminds that the media have also mentioned the potential entrance of the Hungarians in EPS, “in exchange for” Serbia’s share in the Hungarian nuclear power plant Paks 2.

– We have also seen that EPS has problems and that the IMF is once again imposing on us the condition of reforming the public enterprises. Considering that, it’s not impossible for Hungary to take over a part of EPS – says Stanic.

He concludes that Hungary is becoming crucial for the energy stability of Serbia – first, due to the gas storing that we are renting from them, second, due to the potential support to NIS, third, for the possible cooperation with EPS and fourth, if there’s a major malfunction on the TurkStream, so that we can have access to Russian gas through Ukraine toward Hungary.

Stanic also reminded of a historical episode that illustrates the relations of Serbia and Hungary:

– At the beginning of the Second World War, the Kingdom of Yugoslavia signed an agreement on eternal friendship and peace with Hungary. The agreement was signed by the then prime minister of Hungary, Pal Teleki, who committed suicide when the Germans nevertheless invaded Hungary in order to attack Yugoslavia.

B. P.

NIS a.d. Novi Sad

Privredna komora Srbije

MOL Srbija Beograd

Elektroprivreda Srbije ad Beograd

Naftna industrija Srbije

Gazpromneft

Gazprom

MOL

EPS

Chamber of Commerce of Serbia

Bojan Stanić

acquisition of NIS

sanctions against Russia

nuclear power plant Paks