Serbia’s NIS restarts Pancevo refinery after US sanctions waiver

Serbia’s majority Russian-owned oil company NIS has restarted oil processing at its Pancevo refinery after securing a temporary waiver from US sanctions, Serbia’s energy minister said on January 18.

Production of petroleum derivatives resumed after an almost two-month halt, Energy Minister Dubravka Djedovic Handanovic said in a post on Instagram, adding that the first Euro diesel produced following the restart would reach fuel stations from January 27.

NIS was forced to suspend operations in December after US sanctions imposed in October over Russia’s war in Ukraine restricted its access to crude oil. The measures target Russia’s energy sector and apply to companies with majority Russian ownership.

Russian entities control 56.15% of NIS, with Gazprom Neft holding about 44.9% and Gazprom owning 11.3% via the St. Petersburg-based company Intelligence. The Serbian government holds roughly 29.9%, with the remainder owned by minority shareholders.

The refinery restart follows the granting of a temporary licence by the US Treasury Department’s Office of Foreign Assets Control (OFAC) on December 31, allowing NIS to import crude oil, resume processing and conduct transactions needed to maintain supply security until January 23.

“After almost two months of break, production at the Pancevo refinery began today,” Djedovic Handanovic said, adding that around 2,000 employees were involved in restarting operations.

NIS operates Serbia’s only oil refinery, located near Belgrade, and supplies about 80% of the country’s domestic fuel demand. Crude oil deliveries to the refinery resumed earlier this week via Croatia’s JANAF pipeline following the announcement of the special US licence.

The sanctions waiver comes as NIS negotiates the sale of the Russian-held stakes to comply with US requirements. The company has until March 24 to reach a divestment agreement.

Hungary’s oil and gas group MOL is in advanced talks to acquire a majority stake in NIS. Hungarian Foreign Minister Peter Szijjarto said last week, on January 15, that negotiations with Gazprom were progressing well and that an initial agreement could be signed in the coming days, after which the deal would be submitted to OFAC for approval.

President Aleksandar Vucic said on January 18 that Serbia expects to submit the key terms of a future ownership agreement to OFAC by January 20 at the latest, in order to secure an extension of NIS’s operating licence beyond January 23.

“We do not yet have an agreement, but I believe it will be reached,” Vucic told TV Informer.

In addition to MOL, Abu Dhabi National Oil Company (ADNOC) has expressed interest in a potential partnership in NIS.