Srbijagas
The final talks between the legal teams representing Serbia’s multinational Naftna Industrija Srbije (NIS) and the U.S. Office for Foreign Assets Control (OFAC) will take place on Feb. 24 due to the deadline for introducing sanctions, said Dusan Bajatovic, the CEO of Serbia’s state-owned natural gas provider Srbijagas. Speaking for the RTS public service, Bajatovic also stated that the final sit-down with the OFAC will happen on Feb. 25.
The U.S. levied sanctions against NIS on Jan. 10 due to the company being majority-owned by Russia. To circumvent the restrictive measures – set to take effect on March 27 – NIS requested a three-month delay in their introduction, an appeal supported by the governments of Serbia and Hungary.
Bajatovic has explained that there are two possible legal avenues for NIS to avoid the U.S. sanctions: de-listing or licensing. According to him, de-listing is the less realistic option since it would entail removing NIS from the OFAC sanctions lists, which would require the approval of the U.S. Congress.
The second solution, Bajatovic said, is obtaining a OFAC license. “You have examples of this in Europe. Gazprombank was allowed to perform certain transactions so that the supply, foremost of natural gas, wouldn’t be cut off, since oil is subject to full EU sanctions. You have the example of Rosneft, [which] provides 12 percent of the oil on the German market, yet still hasn’t made any changes to its ownership structure,” the Srbijagas CEO stated.
He went on to explain that the dynamic of the talks is such that the OFAC asks questions which NIS then answers. Bajatovic also expressed the opinion that shutting down NIS – which certain economists have proposed – is a bad idea and against Serbian interests, since the company is a guarantee of stability and security for the country.
There is also the potential problem of NIS going bankrupt, which would create procedural and financial issues, Bajatovic said, but added that conducting transactions using Serbian dinars remains a possibility.
As of now, Serbia has enough oil reserves for 90 days, while NIS certainly has enough derivatives to supply the country’s market until May. “If you add that up, we have 180 days without direct repercussions. There will be no hauling fuel around in containers,” Bajatovic concluded.
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