Comico Oil's plans to build oil refinery in Serbia remain unchanged.

By bne IntelliNews June 22, 2012
US-Dutch consortium Comico Oil has informed the authorities of Serbia's Smederevo it is not giving up its plans to build an oil refinery in the city, the company's deputy head, Radomir Radivojevic, was quoted as saying by news agency Beta. In April, Comico Oil and Smederevo signed a 99-year land lease agreement for the refinery construction and under the deal the investor is due to make a RSD 652mn (EUR 5.7mn) lease payment on the 113 hectares of land until June 26. Yet, earlier this week Comico Oil sent an emailed notification to the city authorities it will make the payment with a several-day delay. As Beta reported earlier, Smederevo mayor Predrag Umicevic explained that London-based law firm CMS, which represents Comico Oil, has put several remarks on the contract approved by the city assembly and signed earlier this year. In particular, CMS does not agree with the texts concerning the number of workers who will be engaged in the refinery constriction and who will be later on employed by the Smederevo-based company. That is why the banks that will finance the project are not able to transfer the lease payment to the Smederevo government. Umicevic has said Comico Oil would need some more time to settle the issue with the creditors. According to Comico Oil's Radivojevic it is much more complicated to receive a payment approval nowadays than it was in 2007 and earlier. He added that the 60-day period granted to Comico might not be long enough but that the company's financials remain solid, as well as its intention to invest. Radivojevic expects construction works on the project could start in mid-September. Under the deal signed in April, the refinery should create 550 jobs. Comico Oil representative Brian Murray said last year the construction of the refinery would cost between USD 250mn and USD 400mn. Its planned crude oil refining capacity is estimated at 100,000 barrels. The plant was designed to produce unleaded petrol, Eurodiesel, TNG and aviation fuel mainly for export. There are two oil refineries in Serbia, both operating as part of domestic oil company NIS, controlled by Russian Gazprom Neft.

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