Vučić: Refinery in warm circulation mode, we have four more days until complete shutdown if OFAC does not approve the license
Serbian President Aleksandar Vučić announced that the NIS refinery has entered the "warm circulation" mode, and that we have four more days until the complete suspension of operations if OFAC does not approve the license. He warned that there is a great danger of secondary sanctions against the National Bank and other commercial banks in Serbia. We have given the Russian side 50 days to find a buyer, after that we will have no choice, but we will not immediately nationalize NIS, but rather introduce our own management and offer the highest possible price, Vučić emphasized.
The problem of so-called secondary sanctions would affect all banks in the NBS system that work with NIS, said the President of Serbia.
"And the problem is not just paying at the pumps, but also the issue of paying salaries for 13,000 employees. And then there is Lukoil, which only has a license until mid-December, and that means you have 120 fewer pumps," said Vučić, and sent a new request to OFAC to grant an operating license to NIS.
"The odds are now 50:50, and I am not asking for them for myself, but for the citizens of Serbia. This small country does not deserve to pay the highest price for anyone's conflicts, anyone in the world - geopolitical, legal and others," Vučić said.
The Serbian President stressed that "every letter sent to OFAC" that Russia signed was also signed by Serbia.
"We were not consulted much about those letters, but we accepted everything they asked for. My proposal, which the Government unanimously adopted, because the Americans asked for my word. So, there is a 60 percent chance that they will not give us an operating license, and a 40 percent chance that they will in the next 36 hours. My idea is to give the Russian side some time. Sanctions were only introduced on October 9, and then we were formally notified that a change of ownership was being requested," the Serbian President emphasized.
He emphasized that after 50 days, if a purchase agreement is not reached, Serbia will introduce its own administration and will then offer the highest possible price to its Russian friends.
"That was my proposal and decision, but let me repeat, after 50 days - if a purchase agreement is not created - we have no choice, no great philosophy. We are neither communists nor fascists. That is not enough time, but we cannot survive any longer than that," Vučić said.
The sanctions that have been introduced are not based on law, certainly not on international law, and are the result of political pressure, said the Serbian President.
"Unfortunately, these sanctions affect the lives of Serbian citizens, but we have behaved more than correctly, putting ourselves in a difficult situation," Vučić said.
The President of Serbia recalled that in 2008, in less than three months, we had a sales contract between the state of Serbia and Gazprom, where they became the majority owners of NIS.
"We, through stupidity, also gave up the so-called 'small package' of 13 percent, and thus lost the right to insight into the business because we have less than a 33 percent stake. There is no doubt that with the entry of the Russians, the modernization of the Refinery in Pancevo was carried out, modern technology was introduced. They created a more modern company, but in the meantime all our oil sources were exhausted," said Vučić.
He also reminded that the auditing firm Deloitte estimated it at 2.2 billion in August 2008.
"The client was the Serbian Government, and then we offered a price of 400 million euros, which was accepted by the Russian side. For that money, we sold the NIS buildings in Belgrade and Novi Sad, the refinery in Pančevo, 470 gas stations, tankers, 10,000 square meters of sales space, hotels, resorts...", Vučić stated, among other things.
The President of Serbia also said that NIS was indeed making large losses before the sale, and that with the entry of the Russians, the company made progress.
"When the sanctions were already announced, and the Americans postponed them month after month, we accepted every Russian proposal and did not want to change the terms of business, because we did not want to spoil relations," Vučić said.
The President of Serbia said that ownership of NIS changed three times this year (in February, May and September) because the Russians wanted to adapt their operations to the sanctions.
"We had the right of first refusal four times and we never did it, we let the Russians practically sell to the Russians, because we wanted to be fair," Vučić said.
Vučić stated that in that case the costs of diesel and gasoline would increase, as would the price itself.
"That would increase inflation and bring new problems. It would jeopardize what is very important - the preferential price of diesel for farmers. I don't need to say what consequences this would have for the overall economy of Serbia. I repeat that the Pancevo Refinery has entered the technological process of warm circulation and it will be able to remain in such a status until November 29, that is, until Saturday. NIS has already started to spend its operational reserves, and it will spend most of them in the period between November 28 and 29 and December 1," Vučić said.
He stressed that if oil does not flow from JANAF by Saturday, NIS reserves of around 55,000 tons of diesel and around 50,000 tons of gasoline will remain, which, he said, is enough for the retail network until December 28th.
"Then, regardless of the planned imports of other oil companies, our estimate is that there will be a shortage of around 50,000 tons of diesel and we are ready as a state to immediately enter into that process, so that there are no shortages, so that people do not suffer. We also have 184,000 tons of diesel as a state. We will immediately make it available to all wholesalers. EKO will supply from the refinery in North Macedonia, tomorrow I will talk to Orban about cooperation with MOL," the Serbian President stressed.
The President of Serbia emphasized that the consequences of the termination of NIS are primarily secondary sanctions.
"The National Bank has received a warning, as have all commercial banks, that it may become subject to sanctions. By doing so, we are putting the central bank, but also all commercial banks, at risk. This means that there may be a complete suspension of payment transactions and services to the population, the cessation of the functioning of payment cards, the cessation of the functioning of issuing loans and everything else. All banks in the NBS system, as soon as it becomes clear that we have not received an operating license, so from next Monday, will most certainly not operate," Vučić stressed.
He indicated that he "personally received verbal guarantees from the Americans" that by Monday, when a decision on operational sanctions should be made, there would be no such sanctions for the National Bank and commercial banks.
"It will work, it is quite certain, both today and tomorrow, so there is no threat until the Americans inform the public whether they have refused or accepted. If they refuse, there is a threat of shortages and the functioning of the healthcare system will be jeopardized, and we have ensured that it will function without problems at least until January 15th," Vučić concluded.
He emphasized that in that case, the supply of all retail chains and basic foodstuffs to the citizens of the Republic of Serbia would also be jeopardized.
"So, it's not just about oil or oil derivatives, but about life in the Republic of Serbia. How are you going to pay your salaries? Through which bank? Countless problems. And you don't have to forget that the problem with 'Lukoil', which only has a license until December 13, which is about 112 more pumps, has not yet been solved. There is never just one problem, there are always at least three one after the other. The production of all key resources would be jeopardized, including electricity production, which could cause unforeseeable consequences - both in the economy, households, and for every citizen," Vučić explained.
President Vučić said that when you introduce sanctions against the Russian Federation, it essentially affects our country.
"For 10 months, we listened to everything our Russian friends told us and asked for, and our country found itself in this situation," Vučić said.
The President of Serbia says that the claims that we were offered a stake in Alexandropoulos and that we did not accept it are not true.
"I personally offered to take a stake in 'Alexandropoulos', but that was never considered. I will also offer Orban a stake in 'Paksa 2' (nuclear power plant) and I will always offer such things that could ensure energy stability for the country," Vučić said.
He said that there are no easy solutions, but that the goal is to always tell citizens the truth.
"We only have today and tomorrow to obtain an operating license for NIS from the Americans, and that now depends solely on them," Vučić stressed.
Serbian President Aleksandar Vučić says that the NIS Refinery is in the so-called "quiet running" process.
"It has not been shut down yet, but is at a lower level of operation. We have four more days until the refinery is completely shut down if the license is not approved by the US OFAC, that is, the US government," Vučić said.
He pointed out that they had hoped to receive a work permit and license, but that they had come to the conclusion that the American side wanted to see, hear and receive more things so that they could consider and possibly make a positive decision on issuing a work license for the next 45 or 60 days.
"We won't be able to change anything today and tomorrow. If Thursday comes, the refinery will stop. We will discuss the consequences. The consequences are such that we need experts - I'm telling you, it takes 14 days to restart work. And, of course, it's always more than that. Count on 20 or more days, which means that it is certain that the refinery will not operate until the New Year, and the question is what will happen after that," the Serbian President stressed.
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