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Serbia’s NIS to prioritise energy security and green transition, following “record year” results

Last week, Kirill Tjurdenjev, Director General of Serbia’s biggest oil and gas company, Naftna Industrija Srbije met with the Serbian Minister of Mining and Energy, Dubravka Đedović to discuss the company’s operations and planned investments in 2023, as well the overall situation on the international oil market.

“This is a record year in terms of results for NIS and we are very happy about it, especially considering that the state owns 29.87 per cent of the company’s shares. Our goal is for Serbia and its citizens, as co-owners of NIS, to maximise the benefits resulting from excellent results,” said Minister Đedović. “On the other hand, the priority is security, the security of supply of the domestic market and the operation of the domestic refinery, which is why we continue to monitor the changes that are happening in Europe and the world, above all those that arose as a result of the announced sanctions on Russian oil and oil derivatives. The urgent task is to find the most efficient and safest way to ensure the largest possible reserves of oil and oil derivatives, in which an open dialogue with the representatives of NIS is of great importance.”

Kirill Tjurdenjev said that NIS understands all the challenges and priorities facing the energy sector and will “always” support Serbia’s energy security. “NIS provides sufficient quantities of oil to the refinery in Pančevo, which is operating at maximum capacity and in the advanced period will provide enough oil and oil derivatives for the domestic market,” he added.

Between January to September 2022, NIS refined 3.265 million tonnes of oil and semi-finished products in the Pančevo refinery, which is 14 per cent more than in the same period last year.

“We will continue with investments that will contribute to energy security and the development of projects in the field of green energy,” Mr Tjurdenjev added.

A “record year” for Serbia’s biggest energy company

In 2022 (between January to September 2022), NIS achieved its key priorities which included the preservation of the regular supply of petroleum products to the market and continued investment in “further modernisation”.

The company’s net profit in the third reporting period amounted to 69.4 billion Serbian dinars (591 million euros), while the EBITDA indicator (earnings before interest, taxes, depreciation and amortisation) was recorded at 104.8 billion Serbian dinars (893 million euros). The calculated liabilities of the NIS Group on the basis of public revenues amounted to 184.6 billion Serbian dinars (1.5 million euros), which is 19 per cent higher than for the first nine months of last year.

In the third reporting period, the total production of oil and gas reached 879.3 thousand conditional tonnes, recording similar figures in comparison to the same period in 2021 (889.9 thousand conditional tonnes). The sales volume of petroleum products increased to 3.222 million tonnes, which is 11 per cent more than in the previous reporting period.

In the first nine months of 2022, the company also established the “Energy Block”, which will “accelerate” NIS’ energy transition and expand the scope of work in the field of electricity production & trade and solar energy.

“Ambitious” investment plans for 2023

NIS recently adopted its business plan for 2023, outlining an “ambitious investment programme” with a budget of 49.1 billion Serbian dinars (418 million euros). This will enable the company to continue to finance projects in all business segments with the oil and gas exploration and production segment receiving the largest amount of funding. In particular, NIS will continue to work on the development of oil and gas fields in Serbia, as well as its assets in the region. In addition, further activities will be performed in the development of the project for gas monetisation, as well as the development of the hydrogen production project.

In the field of oil refining, the continuation of the preparation of the third phase of the Pančevo refinery modernisation project will be prioritised. Whilst in sales and distribution, the modernisation and development of the retail network will continue, which will result in the construction and reconstruction of nine petrol stations in Serbia. The implementation of the “strategic” reconstruction and modernisation of petroleum product storage facilities is also planned.

In addition, the company will focus on the further development of its electricity production and trade. This includes the implementation of projects in the field of renewable energy, primarily the continuation of the construction of photovoltaic power farms.

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