Macut: OFAC Decision on NIS License Expected in Days
The prime minister says NIS is awaiting a decision from the US Office of Foreign Assets Control ahead of the August 28 deadline, as oil and fuel reserves sit near their maximum.
The Petroleum Industry of Serbia (NIS) is four days away from the expiration of its license from the US Office of Foreign Assets Control (OFAC), and Prime Minister Djuro Macut said on August 24, appearing on Radio Belgrade 1, that he expects a response to the company’s extension request in the coming days.
The current license, which allows NIS to operate and refine oil, expires on August 28. The company has already filed a new request with OFAC for a special license that would let it continue operating without interruption past that date. Macut said:
I expect that in the coming days we will get a response that will allow operations to continue after August 28.
The prime minister also said negotiations over resolving Russian ownership in NIS are going well, though he gave neither a new deadline nor specific terms of any offer. On the process itself, he added:
As far as Serbia is concerned, there is absolutely no real reason why this should not be met as a requirement toward the state of Serbia. What matters is that the negotiations are ongoing, and we hope this will finally lead to some positive outcome, that this Gordian knot tied to the Petroleum Industry and to supply in general will be untied.
Oil Reserves Near Maximum
Macut stressed that citizens have no reason to worry about fuel supplies. According to him, oil and fuel reserves have consistently stayed near their maximum level, and a dedicated unit has been set up in Smederevo to hold additional oil reserves. Over the past year, he added, several new oil terminals have also been built.
That’s a very good sign that the state has resolved this systemically, because in just the past year alone, for example, several oil terminals have been built. A unit has been set up in Smederevo, a facility where we keep additional oil reserves. So work is being done on this. We constantly have oil and fuel reserves that are near maximum, which is genuinely remarkable for a landlocked country.
How Large Is Russia’s Stake in NIS?
Russia’s ownership stake in NIS stands at 56.2 percent, and it was precisely because of that majority position that the US Treasury Department sanctioned the company on October 9 of last year. Since then, NIS has operated solely on the strength of a series of temporary licenses that OFAC has extended at short intervals, with each new round of talks reopening the question of what happens once the deadline passes.
The previous extension came on July 31, when OFAC also extended, until August 28, the license held by Hungary’s MOL, which is negotiating to take over the Russian stake in the Serbian company. That aligned the two deadlines, meaning the outcome of the NIS talks still hinges on the pace of the negotiations with the Hungarians.
Mining and Energy Minister Dubravka Djedovic Handanovic has previously said that every extension of NIS’s license means the company can buy and bring in sufficient quantities of crude oil, but she has warned that uncertainty over the company’s status has now lasted 18 months. That is how long NIS has been operating without a permanent solution, relying instead on consecutive short-term extensions, and the new request Macut mentioned is only the latest in that string.
Srpske Novine reported in late July that NIS had filed a request for a new license, at a time when the refinery in Pancevo was processing 13,000 tons a day. Neither then nor now was there any indication of when the ownership structure might be permanently resolved, or of who besides MOL might enter talks over the Russian stake.
The next marker is August 28 itself, the date by which a decision should arrive on whether NIS receives a new license or enters a period without a legal basis for normal operations.
