NIS Board of Directors confirms the company’s development strategy to 2025

15 December 2017

The Board of Directors of Gazprom Neft subsidiary NIS a.d. Novi Sad, Serbia, has confirmed the company’s corporate development strategy to 2025, setting out key areas for development in the light of current economic conditions. The strategy outlines key projects and priority areas of focus, including maintaining the company’s performance in oil and gas production, as well as increasing hydrocarbon reserves; increasing refining depth and improving refining efficiency at the NIS refinery in Pančevo; modernising the retail network; and developing electricity projects.

Pursuant to this strategy, average EBITDA growth to 2025 is envisaged at approximately four percent per year, with total investment in NIS’ development to 2025 estimated at USD2.2 billion.

In exploration and production the strategy envisages the consistent expansion of the resource base, together with the development of viable projects in Serbia and other countries.

In refining and petroleum products, NIS’ strategic objective is to improve operational and energy efficiency, and to increase refining depth. The most important project for NIS today concerns the construction of its deep refining complex, being undertaken as part of the second stage of modernising its oil refinery at Pančevo, as a result of which refining depth is expected to exceed 99 percent, with production of diesel fuels increasing by more than 38 percent. On which basis, NIS will further diversify its product range in favour of higher-margin products, supplying the regional market with high-quality fuels. Total investment in this new project will exceed €300 million.

NIS’ priority in petroleum product sales remains the modernisation, development and greater viability of its retail network, increasing NIS’ market share in fuel retailing in the region. The company will continue developing its loyalty programmes and enhancing the services and facilities offered to clients at its filling stations, under the NIS Petrol and GAZPROM brands. NIS also plans to develop premium market sectors in motor fuel, lubricants and marine fuel sales, as well as improving efficiencies in logistics operations and improving the quality of its products and supplementary services.

NIS’ longer-term development to 2025 will concentrate on the further diversification of its activities, through investments in electricity production — key projects in the energy sector being the construction of a new electricity generation plant at Pančevo, and further increasing electricity production volumes at co-generation facilities, as well as developing projects in wind power. NIS will also continue fine-tuning its energy-efficiency systems, through rational and responsible resources management.

Vadim Yakovlev, Chairman of the Board of Directors, NIS, and First Deputy CEO, Gazprom Neft, commented: “NIS is, today, the largest and most effective company in Serbia, and one of the key energy players in the Balkan region. I have every confidence that NIS’ long-term development strategy, mapping out the company’s business development in Serbia and beyond, will further enhance the company’s competitiveness in the future in all markets throughout Eastern Europe, while implementation of the company’s strategic projects will ensure greater profitability for shareholders.”

Commenting on the adoption of the company’s corporate strategy to 2025, NIS CEO Kirill Tyurdenev said: “We are confident that this strategy, adopted by the shareholders and directed at ensuring the fulfilment of our long-term concept — of NIS becoming the leading energy company in Eastern Europe — will be the driver of NIS’ successful development over the next few years. This strategy also confirms the validity of the path we have chosen, and makes clear that we remain focussed on our strategic priorities, which will ensure the further success of the company’s activities, in line with both our clients’ needs and new market realities.”