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The Government of the Republic of Serbia

In the service of citizens

Tender for NIS privatisation adviser first step in oil sector reform

Belgrade, 28 September 2005

Serbian Minister of Economy Predrag Bubalo said today that the calling of a tender to hire a privatisation adviser for state oil company NIS represents the first step in the oil sector reform process.

Speaking at a panel themed “NIS: Challenges of Privatisation,” Bubalo recalled that a privatisation adviser should be chosen by November 30, adding that the adviser will be required to propose the best possible method to privatise the national oil company.

NIS Acting General Manager Zeljko Popovic said that the management is in favour of a “modernisation before privatisation” model, which means that the company should first be modernised so as to increase its value and then sold as a whole.

Popovic said that the best solution for NIS is privatisation in stages, which allows access to strategic investors and a wide distribution of shares after the modernisation and restructuring process is completed.

According to him, NIS needs more than $1 billion in investment by 2008, with between $500 million and $750 million to be invested in refineries, $250-300 million in exploration and oil production, around $100 million in the modernisation of petrol stations, and some $50 million in the company’s restructuring.

Popovic recalled that the three new firms created in the process of restructuring will start operations on October 1. They are: NIS, which will explore for and process oil and natural gas, Transnafta, which will transport oil and natural gas and operate pipelines, and Srbija Gas, which will be in charge of the processing and distribution of natural gas.