Putnikovic: Shutting down Pancevo refinery would not pay off for MOL

BELGRADE - Editor-in-chief of the Energija Balkana internet portal Jelica Putnikovic said on Tuesday a shutdown of the Pancevo oil refinery or a reduction of crude processing at the plant would be a red line for Serbia in talks with Hungary's MOL on its acquisition of a Russian-majority stake in the Serbian oil company NIS, and that shutting down the refinery would not pay off for MOL.

"The talks between Gazprom neft and MOL are the main issue. We have been very keen on cooperation with Hungary's MOL, but it is now turning out that there is no big friendship there. Interests are the most important thing in business. Profit was certainly the Hungarians' motivation to get into these talks, and we must now protect our interests," Putnikovic told Tanjug.

"I think the essence is for the Pancevo refinery to continue to operate in its full capacity and for Serbia to secure independence when it comes to the supply of oil derivatives and higher revenues. If the refinery is operating, state budget revenues are certainly higher than when fuel is imported," she said.

Asked if Serbia should insist on increasing its stake in NIS by 5 pct even at the cost of the entire deal falling through, Putnikovic said the stake increase was not an issue in the talks and that the refinery was the biggest problem.

"With Hungary, Serbia has agreed to build an oil pipeline from Novi Sad to Hungary to connect with the Druzhba oil pipeline, but reports have emerged recently that a product pipeline will be built, which, in my opinion, raises suspicions that MOL might be planning to stop processing crude oil in Pancevo once that is no longer financially viable for them," she said.

Shutting down the refinery would not pay off for MOL as the capacity of the Adriatic Oil Pipeline is not sufficient to supply the company, Putnikovic said.

"Right now, the Druzhba oil pipeline is operational, but the Ukraine war is still going on and if the Ukrainians were to shut down the Druzhba oil pipeline again, they (MOL) would have a big problem. That is why Serbia has exported oil derivatives to them in the past," she said.