The China Mail - Russians agree to sell sanctioned Serbian oil firm

She said the pending sale agreement would now be sent to the US administration for approval, as the oil firm attempts to avoid another sanctions-enforced shutdown of the country's only refinery.

"MOL and Gazprom Neft have agreed on the basic provisions of a future sale and purchase agreement," Energy Minister Dubravka Djedovic Handanovic said in a video statement.

Washington's sanctions on the Petroleum Industry of Serbia (NIS), part of its crackdown on Russia's energy sector, forced the refinery's shutdown in early December, which supplies around 80 per cent of the Balkan country's fuel.

But on December 31, the United States granted NIS a temporary sanctions reprieve, and on Sunday, the refinery restarted fuel production.

NIS has obtained a licence from the US Office of Foreign Assets Control allowing it to continue operations until January 23, as well as a licence to negotiate the sale until March 24.

"The agreement itself still needs to be negotiated," the minister said, adding that Abu Dhabi National Oil Company is also part of the negotiations to join the potential purchase.

She said Serbia had also managed to negotiate an increase in its own minority holding -- potentially bringing it to around 35 per cent -- with plans to "reach a level of shares that would grant greater decision-making rights".

Serbia sold a majority stake in NIS to Gazprom for 400 million euros ($470 million at current rates) in 2008, with the Russian firm investing several billion euros in the company since.

NIS is currently 45 per cent owned by Gazprom Neft, which US sanctions have targeted.

Its parent company, Gazprom, transferred its 11.3 per cent stake in NIS in September to its associated firm, Intelligence.

Djedovic Handanovic also said that MOL had committed to continuing to operate the Pancevo refinery -- after earlier concerns that the plant could be shuttered under the deal.

G.Fung--ThChM