Framework deal reached on sale of Russian stake in Serbia’s state oil company

Hungarian energy company MOL Group has prepared a term sheet with Russia’s Gazprom Neft as part of negotiations over the proposed acquisition of a majority stake in Serbia’s oil refiner NIS, Serbian Minister of Mining and Energy Dubravka Đedović Handanović said.

According to the minister, the talks concerning MOL’s potential takeover of NIS, which operates Serbia’s only oil refinery and the country’s largest network of fuel stations, have resulted in a preliminary document outlining the framework for a future purchase agreement.

She said the term sheet agreed between MOL Group and Gazprom Neft would be forwarded to the United States for approval.

Gazprom Neft currently owns 44.9% of NIS, while Intelligence, another subsidiary of Russian state-owned Gazprom, holds 11.3%, bringing the Russian stake to 56.2%. MOL Group confirmed that the planned transaction concerns the acquisition of this entire Russian-owned share.

Đedović Handanović added that Serbia has secured an increase in its existing 29.9% stake in NIS by five percentage points, a move that would allow the government to participate in decisions requiring a two-thirds majority. She also said that partners from the United Arab Emirates are expected to be involved in the deal, although she did not identify them.

Negotiations on the remaining details are continuing, the minister said, stressing that MOL has committed to maintaining the current level of production at the Pančevo refinery and to increasing output if necessary to preserve market share.

Several hours later, MOL Group announced that it had signed a heads of agreement with Gazprom Neft. The Hungarian company said the transaction would ensure the long-term, stable operation of the Pančevo refinery and its related business units, as well as uninterrupted energy supplies to regional markets.

NIS currently operates 327 fuel stations across Serbia, along with several dozen more in Romania and Bosnia and Herzegovina.

Commenting on the deal, MOL Group Chairman and Chief Executive Officer Zsolt Hernádi said that energy sovereignty in landlocked countries depends on cooperation between strong, predictable refineries and reliable partners. He said MOL is therefore in talks with Abu Dhabi National Oil Co. (ADNOC), the national oil company of the United Arab Emirates, about joining NIS as a minority shareholder, while MOL would retain majority ownership and control. “We are ready for the task and will continue discussions with our partners,” Hernádi said.

Gazprom Neft, for its part, said it had signed a letter of intent.

NIS, formally known as Naftna industrija Srbije, is subject to US sanctions due to Russian ownership and requires approval from the Office of Foreign Assets Control of the US Department of the Treasury to operate without restrictions. Amid the takeover talks, the administration of US President Donald Trump issued a waiver three weeks ago that remains valid through January 23. Separately, Washington has allowed NIS until March 24 to find a buyer.

MOL Group said the parties aim to sign the sales and purchase agreement by March 31.

Serbian officials have previously named ADNOC as a potential investor, while there has also been speculation about an unnamed investment fund from the United Arab Emirates. ADNOC, which is fully owned by the Emirate of Abu Dhabi, holds a 24.9% stake in Austria-based OMV.

Hungary indirectly holds a majority stake in MOL Group. In addition, OTP banka Srbija, a subsidiary of Hungary’s OTP Bank, owns 1.7% of NIS, although the Hungarian government controls only a marginal stake in the bank.

According to MOL Group, NIS has 173 million barrels of oil equivalent in proved and probable reserves. Daily crude oil and gas production in Serbia exceeds 20,000 barrels of oil equivalent, and the company also holds exploration licenses in Romania and Bosnia and Herzegovina.

MOL Group noted that the Pančevo refinery has undergone extensive modernisation over the past 15 years and now has a refining capacity of nearly 4.8 million tons per year.

By Tamilla Hasanova