MOL Group agrees to buy sanctioned Serbian oil stake, pending US approval

Hungary’s MOL Group has signed a preliminary agreement to acquire a 56.15% stake in Serbia’s state-controlled oil company NIS, which is majority-owned by Russia’s Gazprom Neft and subject to United States sanctions. The binding heads of agreement requires approval from the U.S. Office of Foreign Assets Control before the deal can close, with the parties targeting a final sales and purchase agreement by March 31.

The proposed transaction would transfer control of Serbia’s dominant oil supplier — which operates the country’s only refinery — from Russian to Hungarian hands, marking a significant shift in the Balkans energy landscape if Washington grants the necessary sanctions waiver.

BELGRADE, Serbia — Hungary’s MOL Group energy company signed a preliminary agreement Monday to acquire a 56.15% stake in Serbia’s Naftna Industrija Srbije, or NIS, the Russian-owned oil company that the United States sanctioned last year as part of a broader crackdown on Russia’s energy sector.

The deal, structured as a binding heads of agreement with Russia’s Gazprom Neft, cannot be completed without approval from the U.S. Office of Foreign Assets Control, according to a MOL Group statement. The parties aim to sign a final sales and purchase agreement by March 31.

NIS almost entirely controls Serbia’s oil market and operates the Balkan country’s only oil refinery, making it a strategically significant asset. MOL Group said the purchase would strengthen its presence in the Central and Southeastern European energy market.

“As a reliable regional energy provider, we would like to contribute to the development of Central and Southeastern Europe,” Zsolt Hernadi, Chairman and CEO of MOL Group, said in the statement.

Hernadi also said MOL Group and ADNOC, the national oil company of the United Arab Emirates, are in negotiations for ADNOC to potentially join the deal as a minority shareholder.

Serbia’s Energy Minister Dubravka Djedovic Handanovic said Monday that the expected agreement would also raise Serbia’s own stake in NIS by 5 percentage points from the 29.87% it currently holds.

Washington imposed sanctions on NIS as part of its crackdown on Russia’s energy revenues, with those measures taking effect in October. NIS holds a license from OFAC to negotiate a sale through March 24 — a window that helps explain the March 31 target for a final agreement.

Serbia sold the majority stake in NIS to Russia in 2008. The country is formally a candidate for European Union membership but has maintained close ties with Moscow and declined to join Western sanctions imposed on Russia following its invasion of Ukraine.