BELGRADE (Reuters) - Serbian oil group NIS, majority owned by Russia’s Gazprom Neft, is planning to cut development spending by 6.4% next year to 37.5 billion Serbian dinars ($355.2 million).
One of the biggest contributors to Serbia’s budget, NIS operates two refineries, plus fields in Serbia, Angola and Bosnia.
The company said in a statement that a major portion of next year’s investment would go toward oil and gas exploration and production, further development of refining capacity and modernization of its retail network.
NIS will begin operating a deep conversion complex at its Pancevo refinery next year, part of a second phase of a Gazprom Neft modernization program which has been ongoing since 2009.
The complex will allow the refinery’s conversion rate, a key indicator of operational efficiency, to reach 99.2% and increase the volume of high-quality diesel fuel by over 38%.
It will also help it start producing petroleum coke, a first in Serbia, and cease production of heavily polluting high-sulphur fuel oil.
NIS plans to commission a 200 megawatt (MW) gas-fired cogeneration plant in 2020, the biggest in Serbia to date, that will supply the Pancevo refinery and the country’s energy market. The plant is a joint venture between NIS and Gazprom Energoholding, another subsidiary of Russian gas giant Gazprom.
Gazprom Neft owns 56.15% of NIS, while the Serbian government holds 29.88% and small shareholders the rest.
Reporting by Maja Zuvela in Sarajevo; Editing by Kirsten Donovan