Key Points
- Hungary’s MOL Group has signed a preliminary deal to buy a majority stake in Serbia’s main oil supplier, NIS.
- Russia’s Gazprom Neft currently owns NIS and is under U.S. sanctions.
- The deal requires approval from the U.S. Office of Foreign Assets Control.
- The acquisition will strengthen MOL’s presence in the regional energy market.
The Hungarian energy company MOL Group is set to buy a majority stake in Serbia’s main oil supplier, a Russian-owned firm that is currently under U.S. sanctions. The preliminary agreement, announced on Monday, will see MOL acquire a 56.15% stake in Naftna Industrija Srbije (NIS) from Russia’s Gazprom Neft.
The deal, however, is not yet a done deal. It will require approval from the U.S. Office of Foreign Assets Control (OFAC) before it can be finalized. The two sides are hoping to sign the final purchase agreement by the end of March.
NIS is a major player in the Balkan energy market. It almost completely controls Serbia’s oil market and operates the country’s only oil refinery. This acquisition will significantly strengthen MOL’s position in the region.
The U.S. imposed sanctions on NIS last year as part of its crackdown on Russia’s energy sector following the invasion of Ukraine. NIS has a special license from the U.S. government that allows it to negotiate a sale of the company.
Serbia, which has maintained strong ties with Moscow, has been in a tricky position. It is formally seeking to join the European Union, but it has refused to join the Western sanctions against Russia.
As part of the deal, Serbia will also increase its own stake in NIS by 5%, bringing its total ownership to nearly 35%. MOL has also said it is in talks with the national oil company of the United Arab Emirates, ADNOC, to join as a minority shareholder, possibly.
