Uchenna Izundu
OGJ International Editor
LONDON, Feb. 5 -- JSC Gazprom Neft, the oil arm of Russia's OAO Gazprom, has acquired a 51% stake in Serbia's Naftna Industrija Srbije (NIS) for €400 million, paving the way for a revamp of NIS's refining facilities.
The NIS controlling stake will help Gazprom Neft build its presence in southeastern Europe and will bring it closer to achieving oil production of 80 million tonnes/year.
Gazprom Neft has pledged to invest at least €500 million by 2012 to rebuild and upgrade NIS's facilities. "As part of the upgrade, measures will be taken to improve the quality of oil products so that they meet European standards (Euro-5). Besides, substantial investment will be aimed toward improving the environmental safety of production processes," Gazprom Neft said.
Alexander Dyukov, executive board chairman of Gazprom Neft, said the company would "strictly follow all agreements documented in the purchase agreement. We aim to enhance the efficiency of NIS and transform the company into an oil industry leader in Southeast Europe."
Gazprom Neft Executive Board Chairman Alexander Dyukov and Serbian Energy Minister Petar Skundric struck the deal with Serbia last December, signing the agreement in Moscow. The purchase was part of an energy treaty both nations signed in January 2008.
NIS is one of the largest vertically integrated oil companies in central Europe, with oil production of 1 million tonnes/year. Its operations are in Serbia and Angola, and it has refineries in Pancevo and Novi Sad having a total capacity of 7.3 million tonnes/year.
Contact Uchenna Izundu at [email protected].