Panenic: Without agreement between gov't and MOL, decisions on Sisak refinery are inappropriate

Economy Minister Tomislav Panenic said on Thursday that without a final agreement between the two largest shareholders in the INA oil company -- the Croatian government and Hungary's MOL -- it was inappropriate to make decisions such as one on sending crude oil from the Sisak refinery to Rijeka for refining, which may mean that the Sisak plant will be closed down.

"Without a final agreement between the two largest shareholders in INA, the Republic of Croatia and MOL, I think it is inappropriate to undertake such activities. I appeal to everyone involved for understanding, this should pass through all the bodies, not just the executive directors, whose existence is questionable, but it must be presented to the Management, the Supervisory Board and of course the shareholders' assembly," Panenic told the press after a meeting with the Croatian representatives on the INA Management and Supervisory Boards and union representatives.

The New Solidarity union, which operates at INA, said last week that MOL was planning to transport crude oil from domestic fields by rail to be refined at the Rijeka refinery rather than in Sisak, warning that this might lead to the closure of the Sisak plant.

According to media reports, Bengt Oldsberg, INA Executive Director of Refining and Marketing, has sent an email to staff in his department about the transport of crude oil from Sisak to Rijeka, saying that plans had to be made for the dismantling of the refinery and how it would affect the business plan for 2017.

Panenic said that today's meeting discussed the possible transport of oil from the Sisak refinery to the Rijeka refinery, the indications that this might be an attempt to wind down the Sisak plant, and how to protect the interests of INA and its workers.

He said that before the new government was formed, the present caretaker government would carry out all the necessary decisions to ensure INA's functioning and would be closely following all activities.

"We will maintain the position that the government supports the arbitration process and that we want to reach an agreement with MOL on future operations within the company itself," Panenic said.

Asked if the government had any plan and what would happen with the Sisak refinery in the next three to six months, Panenic said that he could discuss this plan had the present government continued its work.

"There is no danger that the company will not be able to make decisions or that there will be no one to represent the interests of the Republic of Croatia," the minister said, recalling that the government had extended the terms of the present members of the INA Management Board appointed by Croatia and had appointed new Croatian members of the Supervisory Board.

He noted that the participants in the meeting had agreed that Croatia's interests were protected.

"The Sisak refinery is operating and the jobs there are safe," Panenic said when asked if the workers should fear for their jobs. He added that it should be taken into account that the entire environment in which energy companies were operating was very unstable and that companies were facing a lot of problems because of low prices.

Asked if the plan to send crude oil from Sisak to Rijeka was a prelude to redirecting domestic oil to Hungarian refineries within several months, Panenic said that that would not be easy to do. "Of course, there are some other mechanisms that can be used to prevent such activities. It is not a prelude because that will not happen," he added.

Answering questions from the press, Panenic said that INA's operations should be brought into accord with the laws of Croatia, namely the Companies Act.

He reiterated that the arbitration was continuing and that a ruling could be expected by the end of the year. "This process is continuing, but at the same time communication is beginning in order to reach an agreement with MOL as a partner."

Asked about the purchase by INA of the 33.5% stake which MOL had in the Bosnian energy company Energopetrol, whereby INA acquired 67% of shares and became the majority owner, Panenic said that this was a business decision made by the company. He said that members of the INA Management Board had told him that the move would contribute to the company's positive performance and operation and that he supported the decision.

Last update: Thu, 14/07/2016 - 23:00

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