The Oil Industry of Serbia (NIS), which is majority-owned by Russia, did not get a new postponement of Washington’s sanctions imposed on the Russian energy sector, the company announced on Thursday after the decision of the US Treasury Department came into force at midnight Eastern time.
In August, the Office of Foreign Assets Control (OFAC) of the US Ministry of Finance granted a new one-month extension of the license allowing the continuation of the delivery of crude oil to NIS until September 29, and then additionally until October 8.
Jadranski naftovod (Janaf), which transports oil to the refinery in Pancevo, the main supplier of oil products to the Serbian market, announced yesterday that it has obtained a license that allows participation in activities that are usual and necessary for oil transport until October 15 of this year, with the aim of completing all activities undertaken on the basis of the current crude oil transport contract.
Janaf, which delivers between two and three million tons of oil and generates around EUR 40 million in revenue, signed a contract with NIS last year for the transport of 10 million tons of oil until the end of next year.
The application of the sanctions, introduced in January, has been postponed eight times so far, and the NIS company announced on Thursday morning that “so far, the special license of the United States Department of Finance, which enables unhindered operational business, has not been extended.”
Director of the Retail Office of NIS Bojana Radojević stated that the Oil Industry of Serbia readily welcomed the American sanctions that came into force this morning at 6:00 a.m., that sufficient supplies of petroleum products and crude oil were secured and that there was no reason to panic or to form queues at the pumps.
In the press release published on the NIS website, it states that the company is trying to adapt its business to the new circumstances.
“The priorities, as before, remain the regular supply of the domestic market with oil derivatives, as well as the preservation of the social stability of the employees. NIS has secured sufficient oil stocks for processing at this time, while gas stations are properly supplied with all types of oil derivatives,” the press release states.
It is added that, in the event that foreign payment cards (Mastercard, Visa) cease to function, payment at gas stations will be possible with the domestic “Dina” card, cash, as well as with the method of the local payment system “IPS pokaži”. The use and payment of the loyalty card “With us on the road”, Agro and Taxi cards will be available without interruption.
The company states that smooth payment transactions in dinars are also ensured in wholesale and that “NIS, for its part, remains a reliable partner and is ready to fulfill all contractual obligations to business partners, including corporate clients and large customers”, whose payment cards function smoothly.
“In cooperation with partners, the Government of the Republic of Serbia and shareholders, NIS is working to overcome this situation. NIS continues to cooperate with the US Treasury Department on the request for removal from the SDN (Specially Designated Nationals) list, which the company initially submitted on March 14 and amended on September 28. Delisting is a long and complex process,” the statement said.
The sanctions on the Serbian Oil Industry are part of the United States’ punitive package of sanctions against the Russian energy sector, and NIS has been under the scrutiny of US sanctions since the beginning of this year, as more than 55 percent of the shares in the company are jointly held by Russia’s Gazprom Neft and Gazprom.
Russia’s Gazprom Neft has meanwhile reduced its ownership stake in NIS to 44 percent, and with this transaction, the basis for sanctions against energy sector companies with majority Russian capital formally ceased.
After the introduction of sanctions, the ownership structure was partially changed, with Russia’s Gazprom Neft transferring its stake of about five percent to Gazprom, given that the gas company is not under sanctions.
With this transaction, Gazprom Neft reduced its ownership stake in NIS in an attempt to avoid sanctions on NIS in Serbia.
