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The state and prospects of development of oil and gas sector of the Republic of Serbia
Material posted: Publication date: 18-02-2019

The States of Central and Eastern Europe are geographically close neighbors and important trade partners of the Russian Federation, whose relationship is defined by the "Agreement on partnership and cooperation". The agreement regulates the interaction of Russia with the above mentioned region in the field of economy, science and technology, industry, military cooperation, tourism, etc. Although we should also consider that this agreement is limited to cooperation, which does not contradict conditions of the European Union, since almost half of the countries belonging to the area of the States of Central and Eastern Europe are permanent members.

Stable growth of economic development of the Russian Federation, increase of competitiveness of the countries of Central and Eastern Europe as a result of obtaining financial resources from the EU, the growth of investment of foreign capital has stimulated an increase in Russian imports, primarily industrial goods and technology. Despite this, you may notice some imbalance of commodity exchange. In particular, the volume of imports of the above goods, which Russia receives substantially less than the volume of exports of energy resources to the region.

It should also be emphasized that the accession of several countries from the region in NATO, a certain way has restricted the export of Russian weapons.

Leading Russian companies that own foreign assets in this region, undoubtedly, are ”Gazprom” and ”LUKOIL”.

Russia is a major exporter of energy for most countries of the region, and fully meets their needs (the biggest importers of gas: the Czech Republic, Lithuania, Latvia, Slovakia (99%), Romania (91%), Hungary (75%), Slovenia (49%). As for oil, the greatest need have Slovakia and Poland (95%), Czech Republic (62%), Estonia (55%), Romania (54%).

The Russian Federation is working on the preservation and improvement of good political relations, strengthening cooperation and placing of their goods, since the countries of Central and Eastern Europe are an important factor in creating a good strategic plan for the conquest of the European market [1].

The Republic Of Serbia

According to data of the Republican statistical Committee of Serbia[1] the trade turnover with foreign countries in 2018 amounted to 38.9 billion. which is 15.3% more than in 2017. Serbia in 2018 exported goods in the amount of 17.0 billion. (an increase of 14.2%). Import of goods was $ 21.9 billion. (increase by 16.1%). The negative balance of trading balance of 4.9 billion dollars. (an increase of 23.4%). Coverage of import by export – 77,4% (in 2016 – 78,8%).

By the end of 2018. main foreign trade partners of Serbia in terms of turnover are Germany – 4.9 billion. with a specific weight in the total trade turnover – by 12.6%, Italy – 4.4 billion USD. with a specific gravity of 11.4%, Russia – 2.6 billion. or 6.6%, Bosnia and Herzegovina – 2.0 billion. or 5.0%, China – $ 1.8 billion. or 4.7%, Hungary – $ 1.7 billion. or 4.3% and Romania – us $ 1.5 billion. or 3.7%. The share of these foreign trade partners of Serbia accounts for about 50.0 per cent of total turnover.

The main importers of Serbian products are Italy – $ 2.2 billion. (with a specific weight of 13.2% in total imports of foreign countries from Serbia), Germany – $ 2.1 billion. (12,5%), Bosnia and Herzegovina – $ 1.4 billion. (8,1%), Russian Federation – USD 1.0 billion. (5,9%), Montenegro – $ 0.8 billion. (4,8%), Romania – $ 0.8 billion. (4.8%) and Bulgaria – 0.6 billion USD. (3,5%) [2].










fuel and energy commodities



Export structure of Serbia in 2018 (interest rate)

In accordance with the Standard international trade classification (smtk) is interested in the export performance of Serbia in 2018 were as follows:

  • oil and petroleum products (300,6 million dollars).

The main countries-exporters of goods to the market of Serbia are Germany (us $ 2.8 billion. with a specific gravity of 12.6% in the total import of Serbia), Italy (us $ 2.2 billion. or 10.1%), China ($1.8 billion. or 8.1%), Russian Federation (us $ 1.6 billion. or 7.2%), Hungary ($1.1 billion. or 5.0%), Poland ($0.9 billion. or 4,1%), Turkey ($0.8 billion. or 3.6%) and Austria (us $ 0.7 million. or 3.1%).

The share of these trading partners accounted for 54.1% of total imports of Serbia.

The imports of Serbia in 2018 (interest rate):

  • oil and petroleum products (1392,1 mln.);
  • natural gas (516,3 million.) [4]

According to the national statistical Committee of Serbia, the volume of Russia's trade with Serbia in 2017 amounted to 2581,8 million. that is by 12.3% more than in 2016. While Russian exports amounted to 1586,3 million. (increase 5.5%) and imports from Serbia – 995,5 million. (increase of 25.2%).

Russia trade volume with Serbia in 2017 occupies the 3rd place among foreign trade partners of Serbia with a specific gravity of 6.6% in its total foreign trade turnover. The trade turnover with Germany amounted to 4906,6 million. (12,6%), Italy – 4445,7 million. (11.4 per cent).

The volume of exports to Serbia, Russia takes the 4th place with a specific gravity of 7.2% in total exports of foreign countries in Serbia. The share of Germany accounts for 12.6% and 2775,0 million. Italy 10,1% – 2208,7 million. China – 8,1% – 1775,6 million.

The volume of imports from Serbia Russia takes the 4th place with a specific gravity of 5.9% in total imports of foreign countries from Serbia. The volume of exports of Serbia to Italy amounted to 2237,0 million. (13.2%), and Germany – 2131,6 million. (12,5%), Bosnia and Herzegovina – 1370,3 million. (8.1 percent).

The share of energy in the structure of Russian exports of 56.5% (896,4 million.) [2].


Import of Russia, mln.


Exports from Russia, mln.












The structure of trade between Russia and Serbia in 2017.


2017 . million.

2016 . million.

2017/2016 %%

Oil and oil products




Natural gas



Total of 133.9

The main goods of Russian exports to Serbia in 2017.

These commodities account for about 80% of Russian exports to Serbia.

Trade and economic relations RS and RF

Russia and Serbia are based on an extensive contractual-legal base. Between the two countries is traditionally active political dialogue, covering a wide range of issues of bilateral cooperation and international issues. Have regular meetings at the level of the highest state leadership, of our governments and ministries. Actively developing inter-parliamentary cooperation. The government of Serbia, the Russian Federation is declared as one of the most important political and economic partners of the Republic. Given that our countries are linked by deep historical and cultural ties, as well as enormous experience of mutually beneficial cooperation, as a defining characteristic of the Russian-Serbian relations, bearing partnerships and deeply friendly nature, points to the mutually beneficial trade-economic cooperation with a stable upward trend and the prospect of escalating over time into an effective strategic partnership with the highest degree of agreement in the field of international policy and common interest of the two countries to develop in the future bilateral cooperation in all its aspects. In the Russian-Serbian trade and economic cooperation the most important areas are energy, agriculture, transport, construction and tourism.

May 25, 2013 at the meeting of the President of Russia Vladimir Putin and President of Serbia T. Nikolic in Sochi signed a Declaration on strategic partnership between the Russian Federation and the Republic of Serbia. This partnership aims to bring bilateral relations to a new level. The strategic partnership provides for the development of large-scale cooperation, particularly in political coordination on issues of bilateral, regional and international relations. In addition, the partnership includes economic and trade issues, development of business contacts and promoting mutual investments.

Russian-Serbian trade and economic cooperation

In December 2017. in a meeting of the presidents of the two countries signed the intergovernmental Declaration on cooperation in modernization of economies, the implementation of which will promote expansion of mutually beneficial cooperation between the Russian Federation and the Republic of Serbia. Serbia handed over a draft joint plan of action in promising sectors of the Russian-Serbian trade and economic cooperation.

Between Russia and Serbia there are more than 20 intergovernmental agreements and protocols. These include the free trade agreement (signed in 2000, amended in 2011), according to which 95% of the goods produced in Russia and Serbia, are exempt from customs duties, and a Declaration on strategic partnership between Russia and Serbia (signed in 2013). Serbia is the only country outside the former Soviet Union, with which Russia has such an agreement. In 2010 Russia granted Serbia a loan in the amount of $200 million to stabilize the balance of payments (to be repaid by 2021). In January 2013, it was allocated $800 million for infrastructure projects in terms of construction of new railway lines, maintenance, procurement of locomotives (up to 2031). In April 2013 was signed the agreement on allocation of $500 million budgetary support (until 2023). In December 2016, the Russian side extended the use of loan volume of $800 million for four years until 31 December 2021 [3].


In 2014 when the US and the EU imposed economic sanctions against Russia in connection with events in Ukraine, Serbia abandoned the anti-Russian sanctions. And after the introduction of Russia's retaliatory measures banning imports of agricultural products from EU countries, Serbia has expressed its intention to increase exports to Russia to replace some of the Western products. However, given the requirement of the European Commission, Belgrade, which is seeking EU membership, has refused these plans.

The trade turnover in the years 2014-2017

In 2015, according to the FCS of the Russian Federation, the Serbian-Russian trade turnover totaled $1.64 billion, which is 23% less than in 2014 (due to the decline in oil prices and the ruble exchange rate). While Russian exports amounted to $850 million, import - $786 million In 2016, the volume of trade increased by 1.32% and reached $1.65 billion (exports of $770 million, import - $886 million). For the first 9 months of 2017, Russia's trade with Serbia amounted to $1,487 billion, which is 29,15% more compared to the same period in 2016 (export - $654,9 million, import - $832,6 million). Russia ranks third among foreign trade partners of Serbia, behind Italy and Germany [4].


The basis of the interaction energy is signed on 25 January 2008, the intergovernmental Agreement on cooperation in the oil and gas industry. One of the important areas of cooperation is power engineering. In 2008 Russia and Serbia signed an intergovernmental agreement under which the Russian company "Gazprom Neft" acquired a 51% stake in the Serbian company Naftna industrija Srbije ("Oil industry of Serbia", NIS). The company Gazprom Neft, which has invested in subsidiary company "Oil industry of Serbia" about $3 billion, is a leading investor in the Serbian energy sector. In addition, "Gazprom Neft" has undertaken to invest NIS another €500 million the acquisition Process was completed in 2009. "Gazprom oil" owns a stake in 56,15%. This is the largest investment project in Serbia. NIS provides 85% of the Serbian market of petroleum products (the largest oil field Velebit, Kikinda, Mokrin, Rusanda, Elemir, Kikinda-varoš). Oil industry of Serbia (NIS) is one of the largest vertically integrated energy companies in Southeast Europe. Main activities – exploration, extraction and processing of oil and gas, marketing of a wide range of petroleum products, as well as the implementation of energy projects. A program of reconstruction and modernization of technological complex of the company. JSC "NIS" is one of the largest employers and taxpayers of Serbia (share of tax revenues – 13%).

Development strategy of JSC "NIS" the transformation of the enterprise into an energy company-leader of the Balkan region with increasing growth in production and reserves, marketing oil products, including the creation of a network of filling stations in Romania, Bulgaria, Bosnia and Herzegovina, Croatia and Hungary. In October 2017. in the Pancevo oil refinery started construction of a plant for deep oil processing technology of delayed coking is a key investment of the second phase of modernization of the refinery. The volume of investments will amount to approximately € 300 million. Completion of construction is scheduled for the end of 2019. The plant capacity will amount to 2 thousand tons per day, and enter complex into operation will allow to increase depth of oil refining up to 99.2%. In the first stage of modernization of the plant was created by the light hydrocracking and hydrotreatment MHT/DHT, which in 2012 allowed the company to start production of the fuel standard "Euro-5". Investments amounted to 540 million euros. Also "Gazprom oil" does not exclude the possibility of buying shares in the petrochemical company "Petrochemistry". In addition, due to the implementation of a program for exploration of the NIS plans to maintain a share of mining profits at 30%. Planned development of energy directions: work together with "Gazprom energoholding" built gas power plant "Te-Pancevo" cost around 180 million euros, in partnership with the Hungarian MET - wind farm cost 140 million euros. [5]

In January of this year (2019) Russian President Vladimir Putin during his visit to Belgrade at a press conference after talks with Serbian President Aleksandar Vucic said that Gazprom Neft is planning to 2025 to invest in Serbian economy $1.4 billion [6].

OAO "LUKOIL" continues to work in Serbia. The company in 2003, acquired the Serbian company for storage and marketing of petroleum products "Beopetrol".

In October 2009 Gazprom and Serbian Srbijagas JP ("Srbijagas") signed an agreement to establish a joint underground gas storage (UGS) "Banatski Dvor" (51% and 49%, respectively). November 21, 2011 was the commissioning of the warehouse, which became one of the largest in South-Eastern Europe (has an active volume of 450 million cubic meters). June 3, 2017, the parties signed a Memorandum of understanding which includes training and technical and financial feasibility of the project of enlarging of UGS - storage capacity will be increased to 750 million cubic meters on 13 October 2012 between Russia and Serbia was signed an intergovernmental agreement on gas deliveries until the end of 2021. On the basis of this document March 27, 2013 between "Gazprom export" and Jugorosgas ("Yugorosgaz") signed a long-term contract. The annual supply of 1.5 billion cubic meters of gas. In 2016, Gazprom supplied Serbia with 1.75 billion cubic meters of gas - 4.3% more than in 2015. From January to November 2017 in Serbia it was exported 1.85 billion cubic meters of gas, a 26.2% more than in the same period of 2016, and 6% more than for the whole of 2016. Currently Serbia imports gas by pipeline "Urengoy - Pomary - Uzhgorod" (run from Russia through Ukraine and Hungary). In January 2019, the President of Russia Vladimir Putin during his visit to Belgrade at a press conference after talks with Serbian President Aleksandar Vucic announced ambitious plans to supply Russian gas to Serbia.


  2. Republicki factory for statistics. Publikacie / the Official website. URL:
  3. The portal of foreign economic activity. Countries of the world // Official website. URL:
  5. Naftna Industria Srbije. Izveshtai // Web site. URL:




Eugene Muraveva

Tags: assessment , oil

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