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The Government of the Republic of Serbia

In the service of citizens

HIP Petrohemija production resumes

Pancevo, 17 September 2009

Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic re-opened the restructured Etilen factory in Pancevo three months after it stopped working, which marked the resuming of operations in HIP Petrohemija.

Author: infobiro.tv

Also attending were Minister of Energy and Mining Petar Skundric, Chair of the Vojvodina Executive Council Bojan Pajtic, State Secretary Nebojsa Ciric, Lukoil Director Alexander Panfilov, Director of NIS Petrol Arkadije Jegezerjan, Chair of the HIP Petrohemija managing committee Branislav Zec and Pancevo Mayor Vesna Martinovic.

Dinkic and Kravchenko signed a protocol on strategic cooperation between NIS and HIP Petrohemija.

It was also agreed that NIS converts part of the claims in the amount of 24 million in Petrohemija shares, which will increase NIS’ share to 25.79% , which is 6% up than before.

Dinkic said that state oil company NIS and Russian oil giant Lukoil agreed to provide 40,000 tonnes of crude oil to Petrohemija a month, which will unable the factory to work at full capacity.

By signing this agreement Petrohemija will save $14 million and by reducing salaries and the number of employees €22 million per annum, he explained.

The Minister added that a total of €30 million is expected to be invested in Petrohemija, €10 million of which will be provided by the government.

Skundric noted that owing to the assistance of the Serbian government, NIS and Lukoil, production has been stabilised, adding that the factory is now ready for new investments.

The Minister announced the reconstruction of the factories producing ethylene and high-density polyethylene (HDPE), as well as the construction of low-density polyethylene and polypropylene factories.

Kravchenko pointed out that the re-launch of production at Petrohemija can be considered as a great success, which could not have been achieved without Ministers Dinkic and Skundric's help, adding that a joint five-year strategy will soon be drafted.