Bosnian Oil Refinery Brod Restarts Production after 15-year Hiatus

“The first volumes of diesel and fuel oil have started flowing out of the facilities of Rafinerija Nafte Bosanski Brod. The production at the refinery has been progressing and the supply of fuel oil [to the market] could begin this week, according to the announcements,” Slobodan Rajlic, advisor to the Serb Republic economy and energy minister Slobodan Puhalac, said in a statement.

The Serb Republic is one of the two autonomous regions that make up war-divided Bosnia. The other is the Muslim-Croat Federation. Rajlic added Brod was expected to start supplying both regional markets with diesel next week.

The Serb Republic's Ministry of Economy, Energy and Development said last week the ceremony for the official restart of production at Brod would take place on November 27 and would be attended by representatives of the central Bosnian and the Serb Republic's governments, Zarubezhneft, the international community and Russian diplomats.

Brod shares were last traded for 0.292 marka ($0.187/0.149 euro) at 1053 GMT on Monday, up from 0.262 marka opening, according to data from the Banja Luka Stock Exchange, where the company is listed. The government statement was issued at 1046 GMT.

The Brod refinery, based in the northwestern part of Bosnia’s Serb Republic, has an installed capacity to process up to 1.5 million tonnes of crude oil annually and can meet up to 80% of Bosnia's fuel needs. It halted production during the 1992-1995 war in the country.

The Serb Republic's government sold last year a package of its majority stakes in Bosanski Brod, motor oil and lubricant maker Modrica and fuel retailer Petrol to Zarubezhneft for a combined 121.1 million euro ($152.5 million). Zarubezhneft pledged to spend a total of 979 million euro to buy the stakes and invest in the Bosnian companies.

The Russian company now owns, via its subsidiary Neftegazinkor, 80% of Brod, 75.65% of Modrica and 80% of Petrol. The minority stakes in the three companies are with privately held investment funds and firms.

($ = 0.794 euro)