The takeover of Sberbank’s European branches, including those in the country, is the first consequence felt in Bosnia and Herzegovina (BiH) due to sanctions against Russia. How will other Russian companies continue their business, and will an economic “bailout” be applied to the Bosanski Brod Oil Refinery?
Bentonite and coal from Ljesljani are natural resources for which the Republika Srpska (RS) has given a concession for 30 years. The companies and successors of the Russian oligarch Oleg Burlakov are not giving up on the project.
European Union (EU) embargo on Russian crude oil imports
Miroslav Drljaca, Mayor of Novi Grad points out:
”Whether there will be a realization, well mostly, some interest in that location is related to the inability of the Russian capital to participate in economic processes in the EU, so there is a greater interest in activating this project. Waiting all these years, I can’t say that I’m not an optimist, or that I don’t believe it, but I’m sure it’s still far from being realized.”
Far from the beginning of work is the Bosanski Brod Refinery, which has not been operating since the 2018 disaster. And even if it worked, it would be full of raw materials, especially when it is known that the EU embargo on the import of Russian crude oil will come into force on May 15th.
Neighboring Serbia is exempt from the package of sanctions for oil and will continue to deliver black gold to Pancevo via the Adriatic oil pipeline. Their price, it is estimated, was a vote against Russia at the United Nations (UN).
”Those sanctions refer to the ban on the import of Russian oil to the territory of Serbia. We do not have that problem. Our Refinery is doing some other work with gas imports. You know that a gas pipeline was built to the Refinery from Croatia. About a month ago, the Refinery addressed the Government with a request for a concession for the construction of a gas power plant within the Refinery,” says Radovan Viskovic, RS Prime Minister.
From bankruptcy due to tax debt
Russia’s Optima Group received a license from the Regulatory Commission for Energy of RS (RERS) to trade in gas in August last year. Four months later, a gas compressor station was put into operation at the Brod oil refinery. Is oil the past for Brod and gas the future?
NeftegazInKor is the largest Russian investment in BiH. In 2007, the company became a 100 percent owner of the oil refinery in Brod, the oil refinery in Modrica, and a chain of distribution companies. The majority owner of NeftegazInKor is the state-owned Russian company Zarubezhneft.
Economist Sinisa Pepic believes that there are several scenarios for the Refinery. From bankruptcy due to tax debt, to “bailout”. He states that it is possible:
”That the Government of RS takes over the ownership according to the same model as Sberbank, conditionally speaking nationalized, ie finished bailout. Another model, known in banking, is bail-in, and that is for company creditors to take control of the company. All this must happen with the consent of the owner. But the seizure of property, regardless of whether it is a Russian owner or someone else, is not in line with positive business practice.”
RS authorities strongly oppose the state of BiH joining the EU’s sanctions against Russia.
