In 2008, Serbia sold a majority stake in the oil company NIS to Russia’s Gazpromneft for €400 million, part of a broader energy deal including the South Stream gas pipeline. The deal, supported by both the ruling government and the opposition, has had significant political and economic repercussions.
The sale, intended to strengthen Serbia’s energy position, soon faced challenges. Serbia’s agreement with Russia conflicted with EU anti-monopoly laws, and the South Stream project was eventually abandoned, leaving Serbia with limited benefits. The deal also placed Serbia in a position where EU sanctions on Russia impacted NIS due to its majority Russian ownership.
In 2014, the EU imposed sanctions on Russia over its actions in Crimea, impacting NIS’s access to the EU capital market and equipment. Despite these difficulties, the Serbian government did not renegotiate the Energy Agreement, and the situation worsened after Russia’s invasion of Ukraine in 2022. The EU and US have imposed stricter sanctions on Russian entities, including Gazpromneft’s stake in NIS, putting Serbia under pressure to resolve the issue.
The Serbian government now faces a deadline of February 25 to present a plan to divest Russian ownership in NIS. Serbia’s options include buying back shares from Gazpromneft or allowing Russia to sell its stake to a third party. However, this process is complicated by the Energy Agreement’s legal protections for Russian property. If a solution cannot be reached, Serbia could face a choice between maintaining its ties with Russia or complying with international sanctions, potentially compromising its energy security.
