Republika Srpska: Zarubežnjeft Oil company Optima is not withdrawing from RS says Liman company CEO

Published on 19. December 2013., SEE Energy News

Last year was not great for the oil business in Europe, including “Optima Group” from Banjaluka which owns Oil Refinery Brod, Oil Refinery Modrica and Oil Refinery “Nestro petrol”, but nonetheless Vladimir Liman, the first man of “Optima Group “expects that the situation will change in the coming year. Vladimir Liman: We are expanding business; there is no question of withdrawal. He decidedly rejected any notion that “Zarubežnjeft” would withdraw from Bosnia because it was illogical that someone who has invested over 600 MEUR in the project does so.

How satisfied are you with the results in2013th?
LIMAN: Overall viewing, the 2013^th was complicated for us. It was slightly worse than 2012^th in terms of macroeconomics. Processors margin height was lower than last year by 10 to 12 percent. Since we only process oil, or buy oil on the world market, this ratio has a great influence on us. Just to achieve results like last year, we had to invest a lot of extra effort in 2013^th. However, no matter that the economic indicators are not good; we expect our operating income to be 10 percent higher than last year.

What causes such a result?
LIMAN: For the whole Europe it is common that all petroleum refineries have certain problems, because there is refining capacities excess, and if you look at the neighboring refineries, many of them are working with 60 or 40 percent of its capacity. In all markets has come to the stagnation or a slight drop. Therefore, companies that do not produce their own oil meet the same problems as we do. If we had our own oil production in BiH, the financial results would certainly be better. We hope that the preliminary survey results, in order to “Jadran naftagas”, which are expected in the first quarter of next year, will be favorable.

The scope of your investments has been reduced in this year. Why is this so?
LIMAN:  When the majority of the shares of the Oil Refinery Brod was purchased, it did not work and it took a great investment to put the plant into operation. Also, the investments were necessary in order to reach the Euro 5 standards level of products quality. We have done this huge work. We consider now the further investment and the majority of them will be related to the increasing of the energy efficiency, environmental projects and logistics. So I want to emphasize that, unlike a few years ago, when we had to invest heavily in plant, we now come to the stage to invest in fine tuning work.

What are your plans for 2014^th?
LIMAN:  When we talk about 2014^th, we plan to improve our sales system, and we will put the emphasis on the domestic market, especially on that in FBiH, because in this part of the market we are not presented in the extent that, as a domestic producer, really belongs to us.

In what way do you plan that?
LIMAN:  First of all, it is more open collaboration with our customers, because we want them to be better informed about the conditions at which they can buy oil products. We also want our customers to have more information about the refinery, because there are still misconceptions about the quality of our products. I want to emphasize that the quality that we achieve fits all European standards and we implement our fuel even on the most demanding EU market.

Nevertheless, it can be heard in some media the economists who say you plan to withdraw from the market of Bosnia and Herzegovina?
LIMAN:  The investment scale, including investment in capital, which we had in Bosnia until today, amount more than 600 MEUR. It would be strange to invest 600 MEUR, and then just leave it. For example, we recently completed the catalyst replacement in the Refinery in order to increase the oil refining efficiency. If we had planned to end our work here, we certainly would not have worked it. We do not want to put our project into a political context. This project is related to the whole country and not to some part. Thanks to the oil industry, all citizens of BiH are in the plus. We have an analysis of the prices before the refinery started its work and what are they now and I can say that the market is much more competitive now than it was before the start of local production.

Indecorous comparisons with “Birca”

How do you comment that some local analysts draw a parallel between the oil refinery and “Birac”?
LIMAN:  We did not have any kind of benefit in terms of subsidies or getting some discount from any state level. We work in accordance with the laws of Bosnia and Herzegovina. I want to point out that from the moment we took the Oil Refinery Brod, we settle all our current liabilities to the suppliers, of course, for taxes, salaries and contributions of our employees. Therefore, it is inappropriate to make parallel operation of the company “Nestro” group with companies that are accused of various frauds.

Source: Serbia Energy See desk/RS medias