BELGRADE (Serbia), June 24 (SeeNews) – Serbia’s largest petrochemicals producer, HIP Petrohemija, may halt production due to a crude oil shortage, local broadcaster b92 reported on Wednesday.
A shutdown scenario, which could pan out as soon as Wednesday, started to loom two months ago when the management warned HIP Petrohemija was operating at minimum capacity, b92 (www.b92.net) reported.
Although HIP Petrohemija ships most of its crude oil from abroad, the imported quantities are not sufficient so the company resorts to Serbia’s oil monopoly NIS as an additional supplier.
A working group comprising two officials each from NIS and the government, trade union officials and Petrohemija officials have concluded that the way the company has been operating until now is unsustainable and that it will suspend production at 1200 GMT, b92 reported, quoting the head of Petrohemija’s trade union Pravda, Zlatko Bekic.
The government in Belgrade, as a 51% shareholder in Petrohemija, will discuss possible solutions for the company's problems next Thursday, Bekic added in the article.
The company, which employs 2,500, first warned it was facing stoppage back in April before NIS agreed to ensure a minimum supply of crude oil, b92 said.
HIP Petrohemija was facing a crude oil shortfall as a result of the debt it owed to NIS, b92 reported in April, quoting HIP Petrohemija’s Deputy General manager Ljubenko Martinovic as saying. He did not elaborate on the debt amount at the time. The company's red ink towers at some 180 million euro, most of it owed to NIS and Russia’s Lukoil, b92 reported in the Wednesday article.
Petrohemija, in agreement with the state, will switch to a planned production halt in a bid to gain time before reaching a deal with its lenders and suppliers, such as NIS, Lukoil and other oil companies, b92 also said.
“The government and the Economy Ministry will do everything in their power to reach the best possible deal and ensure Petrohemija operates without losses,” b92 reported on Wednesday, quoting an unnamed source from the Economy Ministry.
HIP Petrohemija, based in the northern town of Pancevo, reported a net loss of 1.973 billion dinars ($29 million/21 million euro) and an operating revenue of 29.61 billion dinars in 2007, the latest available data showed.
The company produces some 800,000 tonnes of ethylene and polyethylene annually.
(1 euro=93.6388 Serbian dinars)
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