Hungary's MOL Group energy company said on Monday they have signed a preliminary agreement to buy a 56.15% stake in Serbia's Russia-owned main oil supplier that has been sanctioned by the United States.
MOL Group said in a statement that a “binding Heads of Agreement with Gazprom Neft" will need the approval of the U.S. Office of Foreign Assets Control before it can be completed. The parties aim to sign the sales and purchase agreement by March 31, the statement said.
Naftna Industrija Srbije, or NIS, almost entirely controls Serbia's oil market and operates the Balkan country's only oil refinery. MOL Group said the purchase would further strengthen the Hungarian company's presence in the regional energy market.
“As a reliable regional energy provider, we would like to contribute to the development of Central and Southeastern Europe," said Zsolt Hernadi, Chairman and CEO of MOL Group.
Hernadi said that MOL Group and ADNOC, the national oil company of the United Arab Emirates, are also in negotiations for ADNOC to possibly join as a minority shareholder.
Serbia's Energy Minister Dubravka Djedovic Handanovic said Monday that the expected agreement would also increase Serbia's stake in NIS by 5% from the 29.87% it now owns.
Washington imposed sanctions on NIS as part of a crackdown on Russia’s energy sector last year and the sanctions went into effect in October. NIS has a license from OFAC to negotiate the sale by March 24.
Serbia is formally seeking European Union membership but the country has maintained strong ties with Moscow and refused to join Western sanctions imposed on Russia because of the invasion on Ukraine.
Serbia sold the majority stake in NIS to Russia in 2008.
