In only four years, Serbia will be completely drained of its oil reserves, and it will lose large areas of arable land in Vojvodina which have been ruined due to the extensive oil exploitation by Petroleum Industry of Serbia (NIS).
The state authorities have not reacted at all to the warnings coming from experts that NIS uses inadequate exploitation methods on the Serbian oil fields. This is all not only to the detriment of the country’s natural resources, but also to taxpayers who have to compensate for the fact that NIS pays only 3% in mineral rent while other oil companies have to pay 7% which means that NIS pays less into the Serbian budget than its counterparts.
The mineral rent is not enough to compensate for the damage that the Russians (Gazpromneft is the majority owner of NIS) have done to the arable land in Vojvodina and infrastructure in many places where they tried to exhaust the oil reserves as fast as possible in order to get to the profit quicker. In doing so, they’ve used illegal methods which are, in the rest of the world, used only for exploration and not exploitation of oil. They use big pumps which raise the pressure quickly in order to get as much oil from the well as possible. Instead of the regular pipes, they have installed large diameter ones, again in an effort to draw as much oil as possible in the shortest amount of time.
The relevant inspection authorities in Vojvodina have noticed this on two occasions – in 2012 and 2013. Their confidential report say exactly the same thing and the question remains why is everybody keeping mum about it while NIS is trying to convince the public that they do the same thing as large oil companies elsewhere in the world, citing several countries but not Russia, the country which Gazpromneft comes from.
“Our inspection has shown that NIS uses illegal exploitation methods in every field. We have inspected 52 oil fields at which we have ascertained that the company is using strong pumps in oil wells, aided by inadequate pipes for exploitation which measure over 15 inches in diameter. This kind of equipment should be used only in exploration. During our field control, we have also ascertained that the land in the close proximity to the oil wells is ruined, as is the infrastructure which has been damaged by the machinery. The local population claims that NIS is not willing to compensate for the damage”, one of the reports of the Vojvodinian inspection authorities reads. The report has been submitted to both the Vojvodinian and state government.
The former head of the Vojvodinian government, Bojan Pajtic confirms that the provincial government refused to extend the exploitation license to NIS following this report. “As far as I can remember, this was in late 2012. We refused to extend the validity of the license for oil exploitation in Vojvodina because NIS was paying only 3% in mineral rent which did not cover the damage caused by the exploitation methods used. On 1st January, 2013, we decided to ban NIS from further oil exploitation unless the company agrees to pay 7% in mineral rent. Contrary to our decision and the relevant laws, the then Minister of Energy, Milan Bacevic decided to extend the validity of the license for NIS until 2023 and refused to increase the 3% mineral rent that the company pays”.
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