Serbia's government will today consider whether to revive a stalled privatisation plan for Petroleum Industry of Serbia, the domestic oil import and refining monopoly, according to Predrag Bubalo, privatisation minister.
A slow sell-off strategy - authored largely by Merrill Lynch, US financial advisers, and Raiffeisen, the Austrian bank - proposes to start next year with the sale of a minority stake - reported in Serbian media as 25% - to a strategic partner whose total shareholding would be limited to 49% for several years. Among the prospective bidders are Russia's Lukoil, Austria's OMV, Greece's Hellenic Petroleum, and MOL, the successfully privatised Hungarian oil company, which has announced aggressive expansion plans for refining and fuel retailing in all the countries of the former Yugoslavia.
Serbia may sell a 25% stake in the state refining monopoly Nafta Industrija Srbije this year, giving European companies another chance to invest in the Balkans' expanding energy markets. The government plans to approve a sale proposal by advisers at a three-day session starting tomorrow, Deputy Economy Minister Zora Simovic said by telephone from Belgrade today. According to the draft plan, Serbia would sell 25% of the refinery this year to a strategic investor, which could increase its stake to 49% by 2009, Simovic said. Serbia has started talks with Austria's OMV AG, Mol Nyrt. Of Hungary, Greece's Hellenic Petroleum SA, Russia's OAO Lukoil and Slovenian oil company Petrol d.d. about the sale, Economy Minister Predrag Bubalo said on the government's Web site. European energy companies are looking to the Balkans, where economies and fuel use are growing faster than they are in the west. Last year, OMV bought SNP Petrom SA, Romania's largest oil producer, and MOL won the bidding for a Bosnian fuel trader, Energopetrol. Croatia has begun preparing to sell INA Industrija Nafte DD, its oil monopoly. Merrill Lynch & Co. and Raiffeisen Zentralbank Osterreich AG are advising the Serbian government on the sale.
In a second phase, the buyer of the 25 stake could gain more than 50% and take management control of the company. Serbia would keep a so-called golden share providing the state with veto powers, Bubalo said in the statement. He didn't say when the second phase of the sale may be finished. Serbia's assets-sale agency is expected to call for offers to buy a stake in Nafta Industrija Srbije within three to four months after the sale proposal is approved, Simovic added. „NIS may be worth somewhere between one and two billion dollars,” said Tamás Pletser, an analyst with Erste Bank in Budapest. „It is difficult to estimate based on the company's refining capacity.” Nafta Industrija Srbije has been planning to upgrade its two refineries by the end of 2006 to comply with European Union environmental regulations. Its refineries in Pancevo and Novi Sad have a combined capacity of 167,264 barrels a day. NIS had a market share of 72% in the domestic wholesale and retail oil products market, according to Raiffeisen Investment. The company's output fell after its two refineries were damaged during the air strikes by the North Atlantic Treaty Organization in 1999. Production resumed after the units were rebuilt. The future buyer should consider transforming the smaller Novi Sad refinery into a unit producing biofuels using crops grown in the area, according to Pletser. Lukoil executives have visited Serbia to discuss the possible acquisition of NIS, the Economy Ministry said June 23. Hungary's MOL also presented its expansion plans to government officials during a May 18 visit, according to the ministry's Web site.
EU refuses Serbian plea to resume negotiations on trade accord, the European Union rejected a request by Serbia to resume talks on closer trade ties, saying the Serbian government failed to show it would step up the hunt for war-crimes fugitive Ratko Mladic. The EU dismissed as inadequate a plan by Serbian Prime Minister Vojislav Kostunica to capture Mladic, a former Bosnian Serb general charged with genocide during Yugoslavia's breakup in the 1990s. The bloc halted trade talks in early May until Serbia shows full cooperation with the United Nations tribunal in The Hague seeking to try Mladic. „Action is more important than the plan,” EU Enlargement Commissioner Olli Rehn told a press conference in Brussels late today after meeting Kostunica. „It's the results that count.” Serbia is counting on the negotiations over a European trade accord known as a Stabilization and Association Agreement to bolster economic growth and provide a stepping stone to EU membership. (Bloomberg, Financial Times)