NIS CEO Interview for the Bulletin of the National Petroleum Committee of Serbia

April 11, 2012

NIS regularly analyses the geopolitical situation and adjusts its business activities to those events. Five million tons of crude oil by 2020. New hydrocracking and hydrotreating plants in Pančevo. Three billion dollars in investments in six years. Kirill Kravchenko, CEO of NIS j.s.c NPCS BULLETIN: What is the role of NIS in securing energy stability in Serbia? Kirill Kravchenko: NIS remains the energy stability headquarters of this country, which is confirmed in company strategic plans, business results, and of course NIS transformation from an oil and gas to an energy company. In the previous three years, NIS made significant steps in securing energy stability in the country. A new Energy division was established, which in accordance with global tendencies and sustainable development principles, as well as with long-term stability, offers a new development potential for the company. Having this in mind, one of the priority investment directions of NIS in 2012 will be energy. NIS will together with its strategic partners invest at least 35 million euro in energy development, which includes gas and alternative energy, thermal waters, biofuel and wind energy consumption projects. NPCS BULLETIN: What are the projects on which the company bases its oil and gas production strategy? Kirill Kravchenko: NIS business activities are the foundation for securing energy stability in Serbia. Special attention is given to securing strategic oil and gas reserves. Besides the Pannonian Basin, NIS focused exploration to new potential locations south of Sava and the Danube, and securing energy stability is planned via realisation of oil and gas exploration and production projects – in Republika Srpska, Hungary and Romania. As per the 2020 Development Strategy, NIS is planning a production volume of 5 million tons of oil and securing reserves covering 10 years of current production. NPCS BULLETIN: When can the domestic market expect euro-quality fuel from NIS? Kirill Kravchenko: Stable supply of European quality fuel shall be enabled by modernisation of refining facilities and start-up of one of the largest investments in Serbia: hydrocracking and hydrotreating plant at the Pančevo Oil Refinery. In the previous three years, NIS invested 1.5 billion euro in total, and the same amount is planned for investment in the coming three years. Company management goal is for NIS to become a powerful, regional energy company. NPCS BULLETIN: To what extent do the geopolitical events influence the corporate policy strategy, having in mind their unpredictable consequences? Kirill Kravchenko: Company is aware of the financial crisis and complex situations coming from it, as well as the role of NIS in the national economy. There is no doubt that NIS successful business activity and increased efficiency shall contribute to better energy and financial circumstances in the country. Besides being the biggest contributor to the budget, NIS is one of the largest investors in Serbia, and is ready to further invest business development, which is confirmed by the volume of investments in the coming three years, 1-5 billion euro – 500 million euro annually. Due to the 2020 company business strategy, NIS intends to become a worthy representative of Serbia at the international economic scene, an influential player not only in the Balkan market, but in the European market as well. NIS is the first Serbian company that opened a representative office in Brussels, having the goal of aiding Serbia’s European integration, influencing the energy policy and sustainable development, and secure a constructive dialogue with European institutions that will strengthen cooperation and trust in the currently unstable global circumstances. NIS regularly analyses the geopolitical situation and adjusts its business activities to those events, at the same time not distorting own efficiency or market demand, finding a balance between Company and society needs.