Although the extended deadline set by the US Office of Foreign Assets Control (OFAC) to conclude negotiations on the sale of the Russian stake in Oil Industry of Serbia (NIS), it is unlikely that an agreement will be reached, which is why a new extension is expected, according to Demostat's analysis.
After the American agency approved MOL's potential buyer status, the negotiations between the two parties, according to occasional statements by Serbian officials, move along the "hot-cold" line. At first, the Ministry of Mining and Energy stated that they were not a party to the negotiations, and then talks began with Mola, whose goal was to secure Serbia's position, primarily guarantees for the operation of the refinery in Pancevo. It was also mentioned occasionally Petrochemistry, as well as the possibility of increasing the Serbian ownership share by purchasing five percent of NIS shares.
At first, "red lines" were highlighted, then it was announced that progress was being made and that the number of open questions had been reduced. Then followed a period of silence, especially after the elections in Hungary and the change of government, when Peter the Hungarian became the prime minister, who, according to some analysts, is not inclined to follow Viktor Orbán's previous agreements.
Pessimism of politicians
Pessimism soon prevailed in the statements of local politicians, while in recent weeks, before the end of Ofak's deadline, the process practically fell silent. There is no information whether the negotiations have continued or whether they are nearing completion. In the public eye, Serbian interests are mostly associated with Mol, which, according to occasional reports, does not give guarantees about the operation of the Pancevo refinery.
According to Demostat sources, the negotiations did not get stuck on Serbian demands, because Serbia is not directly involved in the main line of talks. As stated, Russia changed tactics after the political changes in Hungary, assuming that the new prime minister will not follow the earlier agreements between Putin and Orban, according to which even after the sale of Mol, Russia would retain indirect influence in NIS. In this context, as it is assessed, the prior approval of OFAK for the participation of Mol in the transaction may also be called into question.
The importance of political changes in Hungary is also reflected in the ownership structure of Mol, in which the Hungarian government has a decisive influence, although it does not formally own a majority package of shares. Through a combination of ownership and legal mechanisms, the state retains control over the company's strategic decisions.
"Golden Action"
The Hungarian government also owns a "golden share", which gives veto power over key decisions, including changes to articles of association, mergers, asset sales or takeovers. In addition, about 30 percent of the shares were transferred to three public foundations, which are under state influence, while the statute limits individual or group voting rights to 10 percent, thus preventing the takeover of control by private or foreign actors.
Due to such a structure, Mol is viewed in analytical evaluations as an instrument of Hungarian energy and geopolitical strategy in the region, which is also reflected in the negotiations on NIS.
In the meantime, other potential interested buyers are mentioned, among them some businessmen and companies from Europe, but none of them, according to the available information, has received OFAK's approval to enter into negotiations. It is speculated that these announcements are primarily an attempt to put additional pressure on the main actors in the negotiations.
The role of the national oil company from the United Arab Emirates ADNOC, with which Mol is allegedly discussing the possible acquisition of a smaller package of NIS shares, if an agreement with Gazpromneft is reached, remains unclear, Demostat estimates.
Source: FoNet
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