Russia’s Rosneft interested in buying stake in Croatia’s INA

Russia’s Rosneft interested in buying stake in Croatia’s INA
INA's Kraljevica refinery at Rjeka.
By Carmen Simion in Bucharest October 29, 2017

Russian state-run oil major Rosneft is considering buying shares in Croatian oil and gas group INA, Rosneft CEO Igor Sechin said according to Croatian daily Jutarnji List.

Croatia owns a 44.85% stake in INA, while Hungary’s MOL holds a 49.1% stake and management rights. The two shareholders have been locked in a long dispute over control of the company. Budapest and Zagreb have been battling over the issue for years, with the Croatian side insisting control was handed over illegally via a bribe to former Prime Minister Ivo Sanader.

“We are certainly interested in efficient investments in this region and we are considering entering INA’s ownership structure,” Secin said.

Secin did not specify the details of a possible purchase of INA shares, but has emphasised the desire for a strategic partnership with the Croatian government, and explicitly stated that should Rosneft enter the ownership structure of INA, both its refineries, in Rijeka and Sisak, would be modernised and would continue production.

The future of the refinery in Sisak has also been a reason for disagreement between INA’s shareholders, with MOL delaying investments in the refinery and planning to shut it down.

In October last year, former energy minister Slaven Dobrovic said Croatia was considering shutting down or repurposing the Sisak refinery, Reuters reported at that time. Dobrovic implied that the government could neither secure financing to upgrade the Sisak refinery nor convince MOL to back the investment, Reuters also reported.

“We believe that there is no reason to close the refinery, which after modernisation can take an important position in the European oil refining market,” the Rosneft CEO said.

“If Rosneft enters INA’s ownership structure, the company’s facilities will be modernised,” he added. 

The Croatian government adopted on August 24 a decision on selecting an investment advisor for the possible purchase of MOL’s stake in INA.

Hungarian Deputy Prime Minister Zsolt Semjen said in June in an interview with Croatian Television (HTV) that the Hungarian government was prepared to resolve the situation regarding the sale of its shares in INA once the Croatian government had submitted its offer and the two sides had reached a business agreement, Hina news agency reported at that time.

Croatian Prime Minister Andrej Plenkovic said in December that Zagreb intended to buy MOL's 49% stake in INA, but it was not clear whether the Hungarian shareholder was willing to sell. Zagreb previously suggested it planned to privatise a 25% stake in state-owned power company Hrvatska Elektroprivreda (HEP) in order to finance the acquisition.