Serb NIS, Russia's Bank of Moscow sign loan deal

BELGRADE Oct 20 (Reuters) - Serbian oil monopoly NIS, majority owned by Russia's Gazprom Neft (SIBN.MM), signed a $100 million loan with Bank of Moscow, as Russia's president arrived in Serbia, highlighting the close ties between the countries.

"The money will be used to finance NIS current activities," NIS said in a statement on Tuesday. "The repayment period can be extended beyond two years as initially agreed."

President Dmitry Medvedev is in Belgrade to discuss the details of a 1 billion euro ($1.5 billion) loan Russia is making to its ally.

In January, Gazprom Neft paid 400 million euros for a majority stake in NIS as part of an energy pact between Serbia and Russia. It pledged to invest 500 million euros to turn the Serbian company into a regional leader.

NIS has held a monopoly in oil derivatives processing since 1999, when its two refineries were heavily damaged in NATO bombing.

The monopoly, approved by the government to give NIS time to recover and become competitive, expires in January 2011.

NIS's two refineries process 7 million tonnes of crude oil a year, double the Serbian market's needs. (Reporitng by Ivana Sekularac. editing by Michael Kahn and Will Waterman)