Gazprom Neft agrees to sell stake in Serbia’s NIS to Hungary’s MOL

Russia’s Gazprom Neft has reached a provisional agreement to sell its majority stake in Serbian oil company NIS to Hungary’s MOL, Serbia’s energy minister said on January 19, in a deal that would require approval from the US Treasury as the firm seeks to escape US sanctions.

Energy Minister Dubravka Djedovic Handanovic said Gazprom Neft and MOL had agreed on the key provisions of a future sale and purchase agreement for NIS, which would now be submitted to the US Treasury Department’s Office of Foreign Assets Control (OFAC) for approval.

“MOL and Gazprom Neft have agreed on the basic provisions of a future sale and purchase agreement,” Djedovic Handanovic said in a video statement, adding that Serbia had secured an improvement in its position in the negotiations.

Under the proposed terms, Serbia would increase its ownership stake in NIS by five percentage points from the current 29.9%, a move the minister claimed would strengthen the state’s decision-making rights in the shareholders’ assembly and help protect national interests.

Gazprom currently holds a combined 56.2% stake in NIS, with its oil arm Gazprom Neft owning 44.9% and another Gazprom subsidiary holding 11.3%. The remaining shares are held by the Serbian state, small shareholders and employees.

NIS, which operates Serbia’s only oil refinery at Pancevo, came under US sanctions in October due to its majority Russian ownership, as part of broader measures targeting Russia’s energy sector over the war in Ukraine. The sanctions forced a temporary shutdown of the refinery in December, raising concerns over domestic fuel supply. OFAC later granted NIS a waiver allowing operations to resume until January 23.

Djedovic Handanovic said MOL had committed to keeping the Pancevo refinery running at least at current output levels and increasing production if necessary to safeguard supply and market share.

NIS supplies around 80% of Serbia’s fuel market, including wholesale gasoline and diesel, and accounts for about half of retail fuel sales.

The minister said partners from the United Arab Emirates were also expected to participate in the future sale agreement, though details remained under negotiation ahead of a March 24 deadline. Serbian officials have previously mentioned Abu Dhabi National Oil Company (ADNOC) as a potential participant, though its role in the deal remains unclear.

Hungary indirectly holds a majority stake in MOL. Any transaction involving NIS will depend on OFAC approval, as Serbia seeks to prevent another sanctions-enforced shutdown of its sole refinery.

"The transaction can ensure the long-term, stable operation of the Pancevo refinery and the related business units, as well as the uninterrupted supply of the region's energy markets," MOL said in a statement, adding that the parties aim to sign the sales and purchase agreement by March 31.

Chairman-CEO Zsolt Hernadi added that the Hungarian group is in negotiations with ADNOC, the national oil company of the United Arab Emirates, to join the owners of NIS as a minority shareholder, while MOL retains majority ownership and control. "MOL is committed to working together with the Serbian government to further strengthen the security of supply in Serbia and in the region," he added.

The Hungarian government has supported and will continue to support MOL in acquiring the stakes in NIS, Foreign Minister Péter Szijjarto said on January 19 during talks in Prague with the officials of the new Czech government.

He added that the integrated and coordinated operation of the Slovak, Hungarian and Serbian oil markets could significantly strengthen Central Europe’s energy supply security.

MOL shares, trading at a seven-year high after breaking out from a tight range a few weeks ago, rose 0.4% to HUF3,546 (€9.20). The price surged 25% over the past month and is up 34% over the past 12 months.