Serbia ready to buy out key energy company co-owned by Russia – president

The move is considered as the last-ditch option to avoid potential US sanctions against the company, Aleksandar Vucic says

Belgrade is ready to purchase Russia’s share in the Naftna Industrija Srbije (NIS), a key energy company in Serbia, in the wake of looming US sanctions against it, President Aleksandar Vucic has announced.

Vucic made the remarks on Sunday in an interview with Serbian national broadcaster RTS. Buying out NIS is a last-resort option to avoid the potential restrictions, the president explained.

NIS is predominantly owned by Russian energy giants Gazprom Neft and Gazprom, which hold 50% and 6.15% stakes respectively, while the Serbian government itself owns 29.87%.

“We have the money to buy it out right away. If the company is estimated to be worth a billion euros, then we’re talking about 600 million or so… Would it be 500-600-700 million, it doesn’t matter,” he said.

At the same time, Vucic questioned the goals of the looming US sanctions, stating that the potential sell-off of the NIS shares would provide Russia with money straight away. The restrictions, first reported by the president late last year, are expected to be rolled out by January 10 or 13, Vucic added.

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It was not immediately clear what exactly the cost estimates voiced by Vucic were based on. According to the 2023 list of the country’s top 100 companies, compiled by the Serbian government, the estimated worth of the NIS assets alone stood at some €4.4 billion ($4.5 billion).

Separately, Serbian Minister of Mining and Energy, Dubravka Dedovic, has announced the creation of a workgroup tasked with striking a new long-term natural gas supply contract with Russia.

“We will try to reach a new long-term agreement with Russia on gas supplies on better terms,” she stated, as quoted by RTS, adding that keeping close ties with Moscow was an “absolute priority” for Belgrade.

NIS has said that it is conducting business as usual and monitoring the situation. Work continues without interruption and there are no shortages of products at NIS-owned gas stations, according to its statement.