Croatia eyes Russian stake in Serbian oil co NIS - minister

ROME. March 18 (Interfax) - Croatia is interested in buying the Russian stake in Serbian oil company NIS, which has been hit by sanctions, Croatian Economy Minister Ante Susnjar was reported as saying by newspaper Jutarnji list.

He said the Croatian operator of the Adria oil pipeline, JANAF could buy the Russian stake in NIS, whose oil refineries receive their crude through this pipeline. JANAF has the capability and is interested in the stake if the parties reach a mutual understanding, the minister said.

It is in Serbia's interests to secure oil for its refineries as soon as and as cheaply as possible and there is currently no alternative to the JANAF pipeline, Susnjar said.

The companies compliment one another, depend on one another and will certainly cooperate in future, he said.

Jutarnji list reported that JANAF has hired a law firm in Washington to represent its interests at the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) on the possible NIS deal.

The United States imposed sanctions against Russian oil companies Gazprom Neft and Surgutneftegas and their subsidiaries on January 10. NIS, as Gazprom Neft's subsidiary, was also included in the Specially Designated Nationals List (SDN List). The U.S. later deferred the sanctions against NIS by 30 days and they will go into effect on March 28.

At the end of February, Gazprom Neft transferred 5.15% of shares in NIS to Russian gas giant Gazprom, and now Gazprom Neft owns 44.85% of the Serbian company and Gazprom holds 11.3%. Serbia owns 29.87% of NIS, and the remaining shares are held by minority shareholders.

Serbian President Aleksandar Vucic has said that the U.S. is demanding that Serbia completely eject Russian capital from NIS. He recalled that the Serbian government sold a controlling stake in NIS to Gazprom Neft in 2008, and in the subsequent years NIS has generated substantial revenue for the country's budget and facilitated the development of many projects.

NIS is the only company in Serbia that explores for and produces hydrocarbons. The company has a large oil refinery in Pancevo and dominates Serbia's oil product market. NIS also has a chain of more than 400 filling stations in Bosnia and Herzegovina, Bulgaria and Romania.