Refining NIS INTERNATIONAL CORPORATE MAGAZINE

Refining
NIS INTERNATIONAL CORPORATE MAGAZINE
1
2
Refining
Company’s sustainable
development is based on
four components: economic
development, care of the human
rerources, responsible attitude
towards the community and
environment protection. Economic
development is a fundament on
which the other three pillars stand,
which the accomplishments of
NIS in this business area ensure
company’s stability and further
growth in the future
Refining
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Refining
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Refining
CONTENTS
NIS INTERNATIONAL CORPORATE MAGAZINE
NEWS&TRENDS
ISSUE
INTERNATIONAL
MAGAZINE
4
Y: 2014
4-9
IN FOCUS
julY
Efficient even through thick and thin
aUgust
septembEr
10
Efficient even
through thick
and thin
10-13
COVER STORY
In the Big League
14-21
22
INTERVIEW
The mark of responsible forestry
Janez Kopač, Director of the Energy Community Secretariat
This magazine is printed
on paper from responsibly
managed forests
22-25
Janez Kopač
DOSSIER
Insurance and Energy
!
26-31
EVENTS
The 21st World Petroleum Congress
32-35
INDUSTRY&BUSINESS
Road to Success
36-39
26
Insurance and
Energy
INDUSTRY&BUSINESS
Compressed Natural Gas
40-45
50
INTERVIEW
Miloš Stanković
46-49
SOCIAL RESPONSIBILITY
Cooperation Driving Development
Energize
Design
Print:
The international magazine of NIS
Metaklinika
“Stojkov”
Illustrators:
Energize Magazine is published quarterly.
Issue 4, October 2014
Published by:
Jelena Vasiljević, Aleksa Jovanović
Copyright © 2014 NIS
NIS, Novi Sad, Serbia
Public Relations and Communication
Photographers:
Department
Mladen Janković, Dušan Đorđević
[email protected]
Phone +381 11 260 66 95
www.nis.eu
Cooperation
Driving
Development
50-53
CULTURE
Summer Festivals
54-59
full tank
Višegrad and Andrićgrad
60-63
60
Višegrad and
Andrićgrad
3
4
NEWS&TRENDS
CofaceTOP
500: NIS Among the
Most Successful
Companies in Central
and Eastern Europe
NIS is the highest ranked Serbian company among the 500 most successful
companies in Central and Eastern Europe
(CEEI) in 2013. According to the CofaceCEETop 500 study published by the
international credit insurance company,
NIS occupies the 58th place.
The results obtained by this leading
world credit insurer show that Fiat Automobili Srbija occupies the 105th place and
Electrical Power Industry of Serbia 124th
in the list of Serbian successful companies, after NIS. Telekom Srbija is at 124th
place, the Nikola Tesla Thermal Power
Plant is in the 300rd position, Delhaize
Srbija in the 314th, Srbijagas the 373rd,
Merkator S the 387th, and Idea the 450th.
Once again the majority of companies
among the top-ranked 500 come from
the oil and gas sectors, as the total of
77 oil and gas giants have generated
revenues in the amount of 162 billion
euros, even though this is a 3.4 per cent
drop compared to the previous year, the
study cites.
NEWS&TRENDS
New Petrol Station in
Belgrade
NIS has opened a new petrol station
under the NIS Petrol brand in Belgrade,
on the E75 highway.
The petrol station offers customers
high-quality petroleum products: Euro
Premium BMB 95, Euro BMB 98, Euro
Diesel 5 and Autogas. The new Ultra D
premium diesel is a special sale segment, aimed at providing maximum
protection for the engine. Also available
are a wide array of motor oils, consumer
goods, a modern café, and an exchange
office.
NIS CEO, Kirill Kravchenko, said in a
statement that opening a petrol station
in Belgrade is an important event for the
company. “The new petrol station is a
symbol of the fact that after three years
of innovations and investing 250 million
euros in the petrol station network development, we have arrived in Belgrade,
“Kravchenko said.
Kravchenko also announced that the
reconstruction of petrol stations in
Belgrade would start next year, and
that investments in the City of Belgrade
would be increased.
Cooperation of
National Petroleum
Committees
The new NIS Petrol station will offer
customers the SuperCard loyalty programme, to accompany the premiere
of the Aromatik brand, which is a new
concept of shops and café-restaurants
at NIS Petrol stations.
The National Petroleum Committee
of Serbia (NPCS), a member of the
World Petroleum Council, organized in
Belgrade the second annual meeting
The business activities of the new petrol
station are fully compliant with environmental standards - a wastewater treatment separator has been constructed,
as well as double-shell tanks for the
protection of soil and groundwater.
Ultra D – the First
Addivitated NIS
Premium Euro Diesel
NIS has offered to the market the first
branded fuel in the history of the Company. It is the ULTRA D Premium Euro
Diesel, manufactured at the Pančevo
Refinery. This fuel improves engine operation and is available exclusively at the
NIS Petrol station network. The use of
ULTRA D Premium Euro Diesel prevents
continued collection of impurities in the
fuel injection system. Further use removes harmful sediments and prevents
the formation of new ones, slows down
the corrosion process, and improves the
lubrication of movable engine components – pistons, bearings, and injection
Vice-President and Chief Executive Officer of NIS, Kirill Kravchenko.
Mutual exchange of free transportation
capacities was also agreed, above all of
military off-road vehicles made available
for NIS, and the minibuses and passenger
vehicles for the needs of the Ministry
and the Army. The signing of the Memorandum of Cooperation was followed by
a demonstration of the skills of NIS and
Ministry of Defense drivers.
of this claim. We have developed a common programme, shown part of the facilities where training will be conducted,
and pointed out that transportation of
people and goods, as well as their safety,
are highly complex issues. In this way, we
are reducing the risk in vehicle use and,
most importantly, we are enabling the
drivers to be even safer in driving, even
in the most difficult conditions. We are
happy to be here today, with the representatives of NIS, and we will support any
company which is responsible towards
the society in this way, “ Bratislav Gašić
said in a statement.
The topics discussed in the meeting
included exploration and production of
crude oil in the Pannonian Basin, as well
as trends in the Southeast Europe’s retail market. Also covered were the challenges that their member-companies
are facing in their business operations.
NIS and Ministry
of Defense Sign
Memorandum of
Cooperation
Minister of Defense Bratislav Gašić
and NIS CEO Kirill Kravchenko signed
a Memorandum of Cooperation which
will enhance traffic safety and improve
storage and transport of hazardous and
explosive substances.
pumps. This in turn increases engine
power and reduces fuel consumption,
and increases car service life. Also, due
to fewer malfunctions, significant saving
is made and better and higher-quality
driving experience is ensured.
of the presidents of national petroleum committees of Southeast Europe.
The meeting was attended by the high
representatives of the industry from
the entire region, as well as Joseph
Tot, the newly-elected President of the
World Petroleum Council. On behalf
of the National Petroleum Committee of Serbia, the meeting was opened
by President Petar Škundrić and NPCS
The Memorandum envisages an exchange of knowledge and experience in
the areas of organization, technology,
and vehicle use in road transport, as
well as implementation of modern information technologies in transport and
transport cost management. Training of
NIS passenger and freight vehicle drivers was agreed, and it is to take place
on the Serbian Army training grounds
and at its facilities. Also envisaged is
joint participation in research projects,
and hiring and exchange of experts at
lecturing on transport and traffic safety.
“The Army helps Serbia’s citizens every
day, but it also lends a helping hand to
the companies working in their interest.
The signing of the Memorandum of Cooperation with NIS is yet another proof
5
6
NEWS&TRENDS
NEWS&TRENDS
New Cogeneration
Module Put into
Operation
NIS has begun the exploitation of the
cogeneration facility mounted at the
“Boka” loading station (in the Sečanj
Municipality). This project represents the
next phase in the implementation of the
programme of cogeneration capacity
expansion, aimed to increase operational
efficiency of NIS and the utilization of the
Company's gas resources.
The module mounted at the “Boka” loading station has the capacity of 350kW and
can produce up to 2.66 million KWh of
electrical energy per year. The equipment
supplier is the German company MWM.
The application of the cogeneration
modules which processes associated gas
into electrical and heat energy will allow
the Company not only to reduce the costs
of energy source procurement for the
needs of infrastructural facilities, but will
also enable NIS to increase its presence in
the Serbian energy market. In addition, the
application of cogeneration will reduce the
environmental load as a result of putting a
stop to associated gas flaring.
The electrical energy produced at the
“Boka” loading station will be delivered to
corresponding Serbian distribution networks, while the heat energy will be used
for the needs of the station itself. It is
expected that 10 cogeneration modules
will be constructed at NIS facilities by the
end of the year.
Sale of electronic
tolling devices at NIS
petrol stations
The sale of electronic toll collection
devices (TAG) has started at NIS petrol
stations. These devices will reduce
hold-ups on highways and pay toll stations, which will in turn ensure comfortable, high-quality driving experience.
This is an initiative of the Ministry of
Construction, Transport, and Infrastructure, based on which NIS and PE Putevi
Srbije (Serbian Roads) have signed a cooperation agreement. The price of one
TAG device is 1,950 dinars, and they can
be topped up electronically at petrol
stations. On the occasion of successful
cooperation on this project, Deputy PM
and Minister of Transportation, Construction and Infrastructure, Zorana
Mihajlović, has sent a thank-you note
to the NIS CEO Kirill Kravchenko, saying
that in this way NIS has confirmed its
commitment to the continual improvement of its business operations.
NIS Becomes
Member of National
EU Convent Energy
Working Group
The National Convent on the European
Union (NCEU) is a standing body within
which a thematically structured
debate on the topic of Serbia joining
the EU will be organized to include
the representatives of the state
administration, MPs, political parties,
non-governmental organizations,
experts, businesses, trade unions, and
professional associations. The National
Convent on the European Union has
plenary sessions and working group
sessions which reflect the thematic
structure of the Negotiating Groups
tasked with negotiating with the EU, and
which are attended by a rapporteur
appointed by the Government, a
corresponding negotiating group, or
a negotiating team. With the aim of
positioning itself, conducting further
activities relating to the association
process, and being as informed as
possible, NIS has accepted the invitation
to become a member of the energy
working group in the NCEU. This working
group will have a minimum of 30
members from different structures, and
will be actively involved in formulating
proposals and recommendations which
will be distributed to the decisionmakers, the general public, and
the media, contributing thus to the
transparency of the negotiation process.
NIS has joined the
Institute of Energy of
South East Europe
With the aim of assuming the position of
a regional leader this year, NIS became
a member of the Institute for Energy
for Southeast Europe (IENE) in August.
The institute is a non-profit non-governmental organization founded in 2003
in Athens by independent scientists and
business leaders in the energy sector.
IENE is active in the Southeast Europe
region, and is a forum where energy
issues can be presented, analysed, and
discussed in a unbiased and objective
way. This in turn allows it to participate
in the creation of energy policies at the
national level as well as within the wider
Southeast Europe region, and support
the implementation of EU sustainable
energy strategy.
NIS, Serbia’s most
socially responsible
company
to become good partners of our local
community. This award is the best impetus
to contiunue moving along the same lines.
– said Sanja Lubardić, director of Department for external communication in NIS.
NIS has been awarded a “My Choice 2014“
medal for social responsibility, as Serbia’s
most responsible company.
“My Choice“ award for social responsibility
is organised by “My Serbia“ Association under the auspices of the City of Belgrade
and with the support of the Administration
of the Deputy Speaker of the National
Assembly of the Republic of Serbia, dr
Vladimir Marinković, together with the
Chamber of Commerce of Belgrad.
-It is our great privilege that, on top of our
steady business development, our social
impact is recognised. We keep transforming out good will into good deeds and seek
NIS Supports
children`s cultural fair
This year as well, as part of its project
"Together for the Community", NIS
supported the children's cultural fair
Mamut Fest, held on 12 and 13 September in the Serbian town of Kikinda.
The aim of the festival is to promote and
protect the natural and world heritage,
as well as cultural tradition, through fun
and education for the youngsters.
Mamut Fest includes a wide array of fun
and attractive activities intended for
children and young people, and marks
the anniversary of the discovery of
one of the most important mammoth
mammoth fossil remains – Kika, as it is
popularly known.
NIS supports this festival as part of its
corporate programme of local community development support. The Mamut
Fest project was selected within the
public competition "Together for the
Community".
7
8
NEWS&TRENDS
8
NEWS&TRENDS
to its operations on the Shakal block,
the company is conducting geological
surveys of the Halabja block. This year
2D seismic surveys are planned to be
conducted there, covering 1,000 linear
kilometres, and drilling the first exploration well in 2015-2016. Gazprom Neft is
also involved in the development of the
Garmian block.
Commercial Oil
Deliveries from Badra
Field in Iraq
Gazprom Neft Starts
Drilling in Kurdistan
Gazprom Neft has begun drilling an
exploration well at the Shakal block in
Kurdistan, Iraq. The company will soon
commence drilling on a second exploration well. The aim of the project is to
study two reservoirs in the Shakal block,
including flow testing. Well testing will
be completed by late 2014 / early 2015.
Grey Wolf (Canada) has been selected as
contractor as it has extensive experience
in the region. The wells will have a depth
of up to 3.5km. Earlier, 2D seismic surveys have been conducted covering an
area of more than 1,000 linear kilometres
at the Shakal block, and an exploration
well has been drilled. 3D seismic surveys
covering 290 square kilometres have also
been conducted since Gazprom Neft
joined the project.
Gazprom Neft is involved in three
projects in Iraqi Kurdistan. In addition
Commercial oil deliveries have begun at
the Badra field in Iraq, where Gazprom
Neft is the development operator. Raw
materials in the amount of 15,000 barrels per day are delivered to the Iraqi
pipeline to be sent on to the export
terminal in the city of Basrah (the Persian
Gulf). According to the terms of the
service contract for the development
of the field, signed with the Government of Iraq, the consortium of investor
companies will begin receiving a share of
the oil produced at Badra after a period
of 90 days following the launch of commercial supply. All of the oil in southern
Iraq, including at Badra, is Basrah Light
oil. The Iraqi State Oil Marketing Organization (SOMO) is responsible for oil sales
and each quarter will be delivering a
share of oil to the investor companies. In
this way, the consortium's project costs
will be reimbursed. Once these project
costs have been covered, the investor
companies will receive remuneration in
kind at the rate of $5.5 of oil per barrel
produced. Each investor company will be
selling their share of oil independently.
First oil from the Badra field was produced in December 2013.
Cooperation Gasprom
Neft - Aero and
ShellAviation
Gazprom Neft
Refineries Cut
Carbon Dioxide
Emissions By A Third
The agreement allows this Gazprom Neft's
subsidiary to provide its partner airlines with
good cooperation and a high level of service
in foreign airports.
"Cooperation with ShellAviation as the
indisputable global aviation fuel supplier is
an important step in the development of
Gazpromneft-Aero's international business.
The Moscow and Omsk refineries have
completely transferred to cryogenic
technology for the capture of nitrogen
used in oil production and refining.
Transferring to the new technology has
enabled a reduction in CO2 emissions by
32 percent at the Omsk Refinery, and 28
percent at the Moscow Refinery.
Previously, the production of nitrogen required the burning of natural gas, resulting in the production of carbon dioxide as
a by-product. New ecological methods
use ultra-low temperatures allowing
the capture of nitrogen from the air.
The purity of the gas produced through
the cryogenic technology is almost 100
percent, allowing it to be used in a wider
range of technological processes in the
refinery, particularly those with more
requirements as to the quality of the gas.
The production of the necessary volume
of high-purity nitrogen required the construction and commissioning of a cryogenic plant at the Moscow Refinery, and
the reconstruction of a nitrogen—oxygen
producing facility at the Omsk refinery.
Gazpromneft-Aero and leading global aviation
fuel supplier ShellAviation signed an agreement allowing partner airline companies of
Gazpromneft-Aero to refuel at airports where
Shell operates its business.
Brent and Urals Crude Oil
Price Movement
Brent crude oil (USD /BBL)
US Dollar Exchange Rate
Against Euro
Urals crude oil ( USD/BBL)
115
1.400
110
1.352
105
100
1.300
95
1.250
JULY
AUGUST
Third quarter 2014
SEPTEMBER
JULY
AUGUST
SEPTEMBER
99
10
IN FOCUS
First half year business performance
EFFICIENT EVEN
THROUGH THICK
AND THIN
Valentina Nešić
Operational Earnings before Interest,
Taxation, Depreciation & Amortisation,
abbriviated EBITDA, of the NIS Group,
amounted to RSD 30.9 billion in the
the first half of this yer, by 10 per cent
exceeding this figure in the same
period last year. The volume of capital
investment in the observed time period
amounts to RSD 17.8 billion, the bulk
of it being invested in exploration and
production
IN FOCUS
11
IN FOCUS
12
IN FOCUS
NIS in figures:
growth EBITDA
The first half of 2014 hit the Balkan
As of the end of June 2014 , the total
As funds were in short supply for its
region economies particularly hard.
scope of payment arrears due from the
strategically pivotal projects the Com-
The negative makroeconomic impact
state-run companies for the products
pany had to resort to increase the in-
was most profound on Serbia’s industry
and services provided by NIS exceeds
debtedness. The total NIS debt to banks
businesses, NIS being no exception.
RSD 56 billion.
following the first six months of 2014
Profitability, as well as oprational cash
Net profit of NIS Group (NIS jsc, to-
flow, the company’s key financial indi-
gether with affiliates and subsidiaries)
ces, took a dive not only due to complex
according to the results for t he six
The required investment programme
macroeconomic environment, but it was
months in 2014 , amounts to 17 billion
shrinking resulted in changes to the
underpinned by the rising tax burden
RSD, which is by five per cent less than
process of geological research activity
and social welfare deductions, including
the same indicator last year.
and geological and technical measures
28,1 30.9
billion dinars
EBITDA H1 2013.
billion dinars
EBITDA H1 2014.
amounts to $ 672 million, by 59 per cent
problem in a concerted effort with our partners in Serbia’s
more than the same period last year.
government. We hope for an arrangement that would make
to be carried out at the company-ow-
the ever increasing payment arrears due
10%
Oil products sales for the reporting
period reached
1,425 million
Increrased tax burden, tackling the
ned deposits, which consume a great
aftermath of floods that befell com-
deal of capital, this in turn slowed down
The total of direct and indirectn tax
pany’s industrial facilities, as well as
the pace of hydro carbons extraction.
obligations accrued by the NIS group
the significant reduction in oeprational
Consequently, the scope of hydrocar-
following the first half of 2014, along
cash flow (OCF is by 93 per cent lower
bons production in the first half of the
with excise duties, tax revenue and
on the same period last year), compe-
current year slightly decreased (-1%)
tonns. This plunge in retail is first and foremost the consequen-
other tax levies exceeded last year’s
lled NIS to scale down its investment
compared to this indicator for 2013 and
ce of the floods – reduced fuel consumption and disruptions in
indicator by 15 per cent and amounts
programme scope by 26 per cent on
amounts to 809 thousand tonns of oil
the operation of quite a number of refuelling stations.
to RSD 60.4 billion. As of the end of June
the same period last year. The scope
equivalent. Following the first six mont-
2014 , the total scope of payment arre-
of capital investment made over the
hs of 2014, the scope of refining is 1.574
The key indicator of corporate efficiency, EBITDA (operational
ars due from the state-run companies
course of the first six months in 2014
million tonns, which is by 12 per cent
earnings before interest, taxation, depreciation and amorti-
for the products and services provided
amounts to RSD 17.8 billion.
higher than the same period last year.
sation) following the first half of 2014 amounted to RSD 30.9
from state owned businesses.
tonns, which is by six per cent more on
the same period last year
“
We are quite satisfied with the strides
NIS made in making its operations more
efficient, thus ensuring company’s steady
development.
”
Vadim Yakovlev
Chairman of the Board, NIS jsc Novi Sad
tment plan and developmenti strategy“.
Kirill Kravchenko, the CEO of NIS, assessed this period as a
very complicated stage in the company’s development. – Negative impact from the outside environment has been intensiefied, and we are hard-pressed to keep the finance and production indices of the company at the required level. At this
junction, NIS posts profit despite macroeconomy, rather than
as a result of it. We anticipate greater hardships in the next six
billion, which is a 10 per cent improvement of this indicator
by NIS exceeds RSD 56 billion.
possible for NIS to continue implementing its mid-term inves-
Oil products sales for the reporting peri-
last year. Other than that, the company’s operational expen-
od reached 1.425 million tonns, which is
ses are significantly lower than the indicators of other power
by six per cent more on the same period
generation companies in the Balkans.
last year. The boost in the scope of sales
was made possible by the streamlined
Comenting the company’s performance in the first six mon-
efficiency of the corporate logistics, the
ths of 2014, the Chairman of NIS Board Vadim Yakovlev said:
improved wholesale clients policy, as
“We are quite satisfied with the strides NIS made in making
well as the growing oil products sales
its operations more efficient, thus ensuring company’s steady
abroad. NIS retail following the first half
development. Never the less, some of the indicators became
of 2014 was reduced by one per cent on
negative mainly due to arrears in state-owned enterprises
the same indices for the six months last
payments, whcih calls for steady dedicated attention. We
year, reaching the level of 336 thousand
have been continuously seeking an efficient solution to this
months. This is why we will focus on the maintenance of the
production scope, preservation of our products sales market,
as well as further boost of operational efficiency. Other than
that, long overdue dept repayment by the state-run businesses
have compelled us to implement only selected investment
projects and reduce the overal scope of capital investment –
says Kravchenko.
“
In the second half of 2014, we
will focus on the maintenance of the
production scope, preservation of our
products sales market, as well as further
boost of operational efficiency.
”
Kirill Kravchenko,
CEO of NIS
13
14
COVER STORY
Sustainable Development Report
In the Big
League
Vesna Lapčić
The most successful companies
in the world, among which is NIS,
conduct business in accordance with
the principles of transparency, which
enhances their competitiveness
in the market
TEMA BROJA
15
16
COVER STORY
NIS has announced its fourth consecutive Sustainable Development Report verified by the auditor KPMG. The 2013 Report
was rated B+ with an increased number of indicators, which
is a progress compared to 2012, especially taking into account
that indicators are presented in accordance with the G3.1. Oil
and Gas Sector Supplement. It is one of only four such reports
in Serbia verified by the auditor KPMG for the previous year.
The fourth consecutive Sustainable Development Report is
NIS is Serbia's first company
to report a verified Sustainable
Development Report –
in 2010
COVER STORY
prepared in accordance with the global guidelines of the Global
Reporting Initiative, an international organisation that develops standards for sustainability reporting. The Report cites the
goals and results aimed at local community improvements,
environmental protection and successful economic growth and
employee considerations.
93 out of the world’s top 100 companies announce their sustainable development reports. In Serbia, unfortunately, only a
small number of companies have sustainability policies and
verified annual reports. A research by the Serbian Association
of Managers suggests that only 27 out of 75 companies are
familiar with business sustainability or have some form of sustainability reports or plan to introduce reporting the following
year. These include mostly foreign investors that have brought
in such business practices from their parent companies.
Ana Trbović, Dean of the Faculty of Economics, Finance and
Administration, says that sustainability is important since it
makes companies consider how to become more efficient and
to optimise their processes. “The next step for every company
is to incorporate sustainability in their business strategies.
Sustainable companies have better business performance, its
employees are more satisfied and prouder to work for such
company, and thus more productive.
Moreover, customers are more willing
to pay for a service or a product to such
companies,” Ms Trbović explains.
FoundatIon
and Three
PIllars
Sustainable development has four
elements: economic development, employee considerations, social responsibility and environmental protection.
Kirill Kravchenko, Chief Executive Officer
of NIS, stated at the presentation of the
Report that all four components were vital for operating sustainably. “However, I
would say that economic development is
the foundation on which the remaining
three pillars rest. NIS retained a growing trend in investments over the past
three years and I hope to see the same
scenario in near future. We invested as
much as 55.6 billion dinars last year
alone. NIS’ payments currently account
for 14% of the national budget and we
are certain that the growing trend in
payments will continue in the coming
years,” said Mr Kravchenko.
According to Mr Kravchenko, NIS is one
of the regional leaders, engaging several
thousands of employees outside Serbia.
“We have also recorded an increase in
the average salary, a more rapid one
than state-wise. We have provided
employment for 800 young persons. We
have tripled our investments in staff
training and development and managed to reduce the number of workplace injuries by nearly 60 per cent over
the past five years,” says the CEO of NIS.
He went on to say that the Company
had invested more than a billion dinar
in social responsibility programmes.
“We have laid the foundations of
transparency in terms of NIS-supported projects and it is particularly
important that the public has a say in
The Company has made
progress given the fact
that reporting is more
transparent and the number
of indicators rose from 41 in
2012 to 48 last year
selecting the projects that could most
contribute to Serbia's development,”
said Mr Kravchenko.
According to the Report, NIS has
met all its environmental protection
obligations under the Purchase Agreement and invested 80 million euros
in environmental protection since the
privatisation. “Not only are our business
operations compliant with all Serbian
laws and cause less pollution, but we
also adhere to all European laws. We
can thus help Serbia in its EU accession efforts,” points out Mr Kravchenko.
Number of indicators
and report assessment
Assessment:
Assessment:
Assessment:
Assessment:
Number
of presented
indicators:
Number
of presented
indicators:
Number
of presented
indicators:
Number
of presented
indicators:
Sustainable Development
Report verified by the
independent auditor KPMG
17
18
COVER STORY
Responsibly to the Community
Last year NIS invested over 414.5 million dinars in social performance. Jelena Ćeklić, Deputy Director of Public Relations and
Communications of NIS, says that the Company has set up the
following corporate programmes: Energy of Sports, Culture beyond Borders, Energy of Knowledge, Charity Projects and Driving
Development which comprises Together for the Community
Project.
“Cooperation in all fields is of major importance for us. Through
these programmes NIS, as a socially responsible company,
integrates support to local communities and their improvement
and development in its operations. We are developing corporate
philanthropy and providing support to those who need help
most. For our social responsibility scheme we received the
Virtus Award, which we are particularly proud of, for national
contribution in 2013,” explains Ms Ćeklić.
Todor Mančić, Chairman of the organisation NURDOR, says the
idea that the Company donates the same amount as that collected by employees themselves is fantastic. “While we were
raising money for a laminar cabinet used for medicine storage
and to protect the staff while handling cytostatics, I was amazed
with the fact that half of the money was actually provided by NIS
workers. This has been our first such experience ever since we
started cooperating with businesses,” says Mr Mančić sincerely.
Sandra Pajović of the B92 Fund says that support from major
companies is crucial since the foundation's projects are of national importance because they involve purchasing digital mammography receptors and incubators and constructing women
and children shelters. “We’ve been active for ten years and we
mostly get positive feedback from major corporations like NIS,
despite a noticeable impact of the crisis,” says Ms Pajović.
COVER STORY
IncreasIng EconomIc
EffIcIency
The trend of sustainability reporting emerged in the late
eighties. Towards the end of the nineties, the international
Amsterdam-based organisation Global Reporting Initiative
was set up to develop sustainability standards.
Igor Lončarević of KPMG says the end goal of business
sustainability is to increase the efficiency of entire economy.
“In Serbia, there are many EU institutions, banks, multinational companies whose supplier it is impossible to become
unless your business is sustainable. Customers have also
become increasingly critical and will prefer the companies
that show environmental consideration, for instance,” says
Mr Lončarević.
Jelena Bulatović of the Serbian Association of Managers
(SAM) says the presence of foreign investors is beneficial,
as they set an example for domestic companies. “SAM has
taken its members to visit NIS' Pančevo Refinery and see the
process of top-quality fuel production on the spot. People
need to learn, by looking to others, that business sustainability is beneficial to them,” added Ms Bulatović.
Ana Trbović stresses that the most successful companies
operate on the principles of sustainable development and
that consumers and clients turn to such companies. “Every
public enterprise, research institute or library should announce their financial reports. NIS practices put a moral
pressure on the public sector to start operating more transparently and spending the tax resources more efficiently,”
explains Ms Trbović.
Last year NIS invested RSD
414,5m
in social programmes
Open DIalogue
As part of the presentation of the Report,
NIS has run five roundtable meetings
with the aim to foster open dialogue
with its partners and the public. Apart
from the Company's representatives,
this traditional forum was attended by
all interested representatives of ministries, state institutions, Belgrade and
Novi Sad Universities, non-governmental
organisations, petroleum associations,
major companies from Serbia and
the media. The roundtable meetings
focused on the following topics: human
resources policy development in NIS, the
Company's sustainability strategy and
social responsibility, OSH management,
NIS customer and client relations and
the Company's youth programmes.
Employee Care
The gross salary in NIS averaged
143,000 dinars last year, while the
national average was around 60,000
dinars. Owing to the bonus scheme,
salaries can increase by as much as
50 per cent, and according to trade
unions, employees have one of the best
collective agreements in the region.
Nataša Stamenković, HR Director of NIS,
says that NIS' Collective Agreement is a
result of team work and partner relations
between representative trade unions and
the employer. “Through social dialogue
and excellent communication, we
have created a document intended to
safeguard the interests and lay down the
rights and responsibilities of employees and the employer alike. It provides
significantly greater rights than those
granted under the Labour Law,” points
out Ms Stamenković.
“NIS’ ads are very popular, sought after,
commented and have two times more
recommendations than other ads,” says
Ms Ćetković.
NIS Invested RSD 290m in Staff Development in 2013 Alone
Nataša Stamenković says that many
foreign and domestic companies have
cut their investments in training and
development during crisis to lessen their
operating expenses, but NIS records a
progressive growth in this area.
Snežana Milajić of the Ministry of Labour,
Employment and Social Policy says that
a vast number of companies fail to pay
regular salaries. “Only few employers are
investing in staff training, even though
the Law provides clear-cut guidance in
that segment. It is naturally important
for a company to invest in its employees'
professional development, and NIS is a
good example of a socially responsible
employer.
Nebojša Kukić of the National Employment Service particularly highlights that
NIS, Carlsberg, Coca Cola and similar
companies have raised the bar, achieving that the dream of having a good
life need not be pursued abroad, and
making it possible to work in Serbia and
earn as much as in the West. “With their
experience and effort and by investing in
knowledge, young people can make their
dream come true in Serbia as well,” says
Mr Kukić.
Visitors of the employment website
Infostud have chosen NIS as one of the
employers of choice. Sanja Ćetković
of Infostud says that this company’s
image is certainly a contributing factor.
Workplace
Safety
One of the ways how NIS tries to create a
good working environment is by improving occupational safety and health. From
2009 to 2013, the number of adverse
events significantly dropped regarding almost all key HSE indicators – the
number of workplace injuries and traffic
accidents fell by nearly 60 per cent,
whereas the number of fire incidents
and environmental accidents fell by 20
percent. The Company is investing heavily in procuring cutting-edge personal
protective equipment which must be
worn by all employees during regular
on-site duties. Apart from investing in
equipment, NIS is also investing in staff
HSE training.
In order to expand knowledge and raise
the staff's awareness of HSE, the Company has set up a system of non-material
motivation to reward the best results in
improving HSE performance.
According to Dejan Badnjarević, an HSE
training expert, developing the staff's
19
20
COVER STORY
COVER STORY
The Company implements Healthy
Lifestyle Policy and it will invest RSD
73
million in the program this year
HSE competencies is vital to good business performance.
“Broadening one's knowledge and skills should result in the
fact that employees carry out their duties complying with
the legislation and internal standards,” says Mr Badnjarević.
Vera Božić Trefalt of the Occupational Safety and Health Administration says that the working people, regardless of their
age, need to be aware of the fact that you live and learn, yet
people become very reluctant to accept new knowledge past
the age of 55. “NIS practices involve a higher level of education. Without upgrading the knowledge and gaining new
competencies there is no business sustainability,” stresses
Ms Božić Trefalt.
Environmental Protection
2013 investments in environmental projects total 2.1
billion dinars, which is 62 per cent of the investments
budgeted for the previous year. The Company strives to
use natural resources rationally and to reduce negative
impact on human life and the environment. Implemented
environmental projects have significantly reduced
noxious emissions into the air. Most ecological accidents
recorded in 2013 (around 94) were classified as minor.
One of NIS' key strategies is to develop alternative energy
sources and the main goals involve environment protection and sustainable development.
Since employee health is of primary importance, the Company has the Healthy Lifestyle Policy in place comprising
free sporting events, education on healthy diet and the significance of physical activity for improving one's health. Last
year 50 million dinars of investments was allocated to this
segment, while this year's budget amounts to 73 million dinars. Medical check-ups are also made available to employees, which is the Company's effort in the field of prevention
of occupational illnesses.
Customer
ResponsIbIlIty
Businesses are gradually shifting the focus onto the customer. Surveys show that 75 percent of revenues come from
15 percent of loyal clients. Social responsibility implies that
the customer is always satisfied. Mladen Vasić, Director of
NIS’ Marketing Department within Sales and Distribution,
says that customer satisfaction alone is not sufficient anymore because as much as 40 percent of satisfied customers
will switch to competitors if offered
more. “Attracting new customers costs
five times more than retaining the core
ones. We need to try to provide satisfactory service to our customers in a
proper manner,” stresses Mr Vasić.
Mr Vasić adds that surveys suggest
that even stock price trends depend on
customer satisfaction. “Openness and
transparency towards the customer
are necessary and we need to be ready
to hear what they have to say. Each of
our customer groups, be it wholesalers,
farmers or retail customers, is different and we approach each of them taking care to meet their needs. NIS has
numerous customer communication
channels, the Call Centre, surveys or
social networks helping us to identify
potential dissatisfaction. We try to use
state-of-the-art tools to track customer
satisfaction and their attitude towards
our company,” explains Mr Vasić.
SupportIng
Young Talents
The main goal of NIS, according to the
Company's Chief Executive Officer
Kirill Kravchenko, will be the Energy
says that the Oil and Gas Engineering
Department was established along
with the Faculty, but it has never attracted such great interest as this year.
“We usually have a dozen of students.
This year there are 25 students funded
through state-budget and five selffinancing students, while as many as
107 people applied. We have to thank
NIS for such results,” says Mr Cvjetić.
of Knowledge Project, that is, cooperation with universities and Petnica and
investing in young talents.
“I believe that all the steps we are making now will be of huge importance
for the Company in future,” says Mr
Kravchenko.
Snežana Lakićević, Manager for Cooperation with Universities, says that
the labour market does not follow
the needs of the commerce. “NIS is
faced with the problems of deficient
personnel in some of the Company's
important segments, but also with improper knowledge, primarily technical
competencies usually demonstrated by
young graduates. To this end, a project
was designed that meets the Company's needs, but also leads directly
to improvement and modernisation of
the curriculum. The Project is a prime
example of merging experience and
youth, commerce and education. We
have achieved results of which NIS can
be proud, but we have also demonstrated possible modalities for solving
the problem of the labour market’s inadequate personnel structure,” stresses
Ms Lakićević.
Aleksandar Cvjetić, Assistant Professor
of the Faculty of Mining and Geology,
Milan Pavlović, Dean of the Faculty
of Technical Sciences - Mihajlo Pupin
from Zrenjanin, says that NIS helped
launch new studies – Industrial
Engineering in Oil and Gas Exploitation. “Our goal is to prepare students
through their education for working
with the Company. The laboratory
will be partially remodelled to suit the
needs of NIS." says Mr Pavlović.
Marko Vanić, a participant of the NIS
Chance Programme, has been on a
three-month internship in NIS and
then started working through this
Project. “I was satisfied with the internship but I was even more thrilled
with the NIS Chance Project after I
was taken on board. Two mentors
were assigned to me, one to monitor
my professional development and
the other to monitor my technical
development and improvement of
skills and knowledge I had gained
at the faculty. I shortly joined a real
project. I also completed three major
international training courses initially
designed for permanent employees
but then us, interns, were included."
adds Mr Vanić.
In 2013, NIS decided to prepare the
Guidelines for Harmonisation with GRI
G4, the new trends in reporting. By the
end of the year, the Company should
outline and adopt its Sustainable Development Strategy, which will be the
first such business practice in Serbia.
21
22
intervIEW
interVIEW
Janez Kopač, Director of the
Energy Community Secretariat
New energy
policy
At the end of September, Serbia hosted the 6th Oil Forum of
the Energy Community whose main topics were the regulations on minimum stocks of crude oil and petroleum products,
as well as the importance of oil within the Energy Community
as a part of the general energy supply security.
- The Energy Community members are now under a legally
binding obligation to establish emergency oil stocks by 1st
January 2023 at the latest. Despite that the deadline seems far
away, this will not be an easy task, says Janez Kopac, Director
of the Energy Community Secretariat, for Energize.
He emphasizes Serbia’s efforts to establish the legal framework for compliance with the oil stockholding directive
which could serve as a model that could be followed by the
other Energy Community members.
Private investment has remained far below the levels hoped for when
establishing the Energy Community. We are most happy with NIS as the
leader in investments in Serbia
What are the key messages from the meeting?
The European Commission outlined the latest work on energy
security and its response to the current geopolitical environment and the EU´s import dependence. The International
Energy Agency will provide a general guide to the existing
emergency stockholding system for countries considering the
introduction of new stockholding systems or changes to their
existing emergency stocks.
The presentation of the latest outcome of the First Tender for
Award of the Hydrocarbons Production Concession Contract
for offshore licensing in Montenegro was of great interest.
Could you tell us something about the announced
reform of the Energy Community - the Energy Community Treaty envisaged formal boundaries of its
existence (10 years), but there is overwhelming wish
expressed to extend its duration. How do you see future role of the Energy Community? Do you anticipate
any effect on the role of Serbia as a Contracting Party
and, naturally, will it influence NIS as the biggest energy
company in our country?
The existence of the Energy Community has been prolonged till 2026 last year but I am confident that it will last
much longer, given that the organisation has evolved into a
powerful international energy policy instrument. Last year a
High Level Reflection Group under the chairmanship of Prof
Buzek, former President of the European Parliament, was
established. It was mandated to suggest needed adaptations
and changes to the scope of the Energy Community acquis.
The Group recommended that the current acquis should be
widened to include additional rules on competition, state aid
and public procurement in the energy sector and new environmental acquis. Moreover, Energy Community institutions
should be better linked to EU energy institutions created by
the Third Energy Package – ACER, ENTSO-E and ENTSO-G.
At the same time, the Group concluded that EU rules need
to be better adapted to the socio-economic situation of
the participating non-EU countries. It also recommended
strengthening and expanding Title IV of the Treaty, which
allows for designing true pan-European energy governance.
The Group recommended the introduction of risk mitigation
schemes for investments, such as an Energy Community
Risk Enhancement Facility providing investment guarantees
or insurance products and an entity allowing for demand
aggregation for imported gas.
Today's imperfect enforcement mechanisms are one of
the major obstacles to the success of the Community. The
Group proposed for the currently week dispute settlement
procedure to be gradually replaced by a Court of Justice and
financial sanctions to be introduced, as in the EU. Moreover,
the court should also be accessible directly by individuals
and companies. Having access to a vigorous and independent judicial system is also fundamental for investors.
These are only a few of the suggestions of the Group. Of
course they will be widely discussed and hopefully also
adopted in 2015.
EU acquis is only a piece of paper if the
companies do not respect it in practice.
Therefore every government has to
cooperate with the companies on its
territory to successfully finalize the
accession process
23
24
intervIEW
interVIEW
in the approach to renewable energy
sources. There, a policy, less generous
than nowadays, will have to be created
for a post 2020 period. Of course this
will influence also Energy Community
members. For Serbia, an orientation
towards diversification of gas supply
might also be important. The EU wants
to be less dependent on Russian gas
since this is beneficial for consumers and helps to stabilize supply. In
Serbia’s official positions, we haven’t
seen a serious wish to do something
similar yet.
How would you assess the level of
investments reached so far in the
countries that are the Contracting
Parties of the Energy Community
and in Serbia in particular? How important is the role of companies like
NIS who is the leader in investments
in Serbia?
From current debates in EU on
Energy and climate policy framework,
it is evident that some of the policy
implementation areas will need to be
reviewed. What are your expectations
and will those reviews have an effect
on the Energy Community strategy?
EU climate policy is currently not part
of Energy Community acquis but Serbia,
as an EU accession country, will have to
respect it sooner or later. In the energy
area we can witness two major developments. More ambitious goals in energy
policy will most probably trigger amendments to the Energy Efficiency Directive
which is expected to soon become part
of the Energy Community acquis. The
other major change can be expected
Private investment has remained
far below the levels hoped for when
establishing the Energy Community.
Besides incorporating EU legislation,
the Treaty establishing the Energy
Community does not offer any specific
instruments which could help promote
investments.
We are most happy with NIS as the
leader in investments in Serbia. This
is of utmost importance for the oil
sector and for the entire energy sector
as well.
Most of the Energy Community members are characterized by a risk profile
that is incompatible with attracting
significant streams of private international capital. This is additionally
constrained both in total amounts
The existence of the
Energy Community has
been prolonged
till 2026 last year but I am
confident that it will last
much longer, given that
the organisation has
evolved into a
powerful international
energy policy instrument
and by lending rules of the international financial organizations-IFIs (no
100% financing of a project by one IFI,
“sound banking practice”, etc).
Prof Buzek’s group suggested more solutions. Two of them are crucial. Firstly,
more funding should be made available in bilateral as well as multilateral
support from international financial
institutions (such as the World Bank
etc.) and European Union for technical
assistance as well as for investments
(at least for Projects of Energy Community Interest). Funding should be
conditional on compliance with Energy
Community obligations. Secondly, the
establishment of an Energy Community Risk Enhancement Facility (ECREF)
is suggested, to address risks such as
breach of contract by public bodies,
retroactive measures, discriminatory
taxation, payment default by public
entities, and similar risks which are a
strong deterrent to both lenders and
investors, and are difficult to mitigate
effectively.
You are aware that Serbia has
already started its accession
negotiations with the EU. How is
Energy Community supporting that
process? Where do you see possible challenges for a company like
NIS in this process? And a particular
question - do you have any specific
recommendations to the Serbian
government when it comes to the
involvement of the business in this
process?
The Energy Community is a waiting
room for every EU accession country in the field of energy. This is why
accession countries are much better
prepared in the energy sector than in
many others. The Secretariat is also an
important advisor to the members of
the Community in the negotiation process and sometimes even an attorney.
Cooperation with industry is crucial.
EU acquis is only a piece of paper if the
companies do not respect it in practice.
Therefore every government has to
cooperate with the companies on its
territory to successfully finalize the
accession process.
From your experience, what do
the countries find to be the most
difficult accession requirement
to fulfil (Energy related)? How can
companies like NIS help and support
the process?
Every country has its own peculiarity.
I think that in Serbia most problematic will be its gas sector with company
Srbijagas and all its problems. Srbijagas and Yugorosgas do not comply
with unbundling requirements of the
Second Energy Package, let alone the
Third Package.
The Energy Community is
a waiting
room for every EU
accession country
in the field of energy.
This is why
accession countries are
much better
prepared in the energy
sector than in
many others
Energy Community Secretariat
in cooperation with EURELECTRIC
coordinated efforts to supply aid in
equipment and material to network
operators in the flooded regions.
What are your estimates for the
situation at the moment, should
we expect some serious electricity
shortages this winter?
Without a major gas crisis and under
normal weather conditions, I don’t believe there will be shortages. But scarcity of electricity will raise the price.
Energy Community
Mission and Goals
The Energy Community is an international organisation dealing with energy
policy. The organisation was founded by the Treaty establishing the Energy
Community signed in October 2005 in Athens, Greece. It entered into force in
July 2006. The Parties to the Treaty are the European Union and eight Contracting Parties from South East Europe and the Black Sea region. The Energy
Community Secretariat has its seat in Vienna, Austria.
The Energy Community’s mission is to extend the EU internal energy market to
South East Europe and beyond on the basis of a legally binding framework. The
overall objective of the Energy Community Treaty is to create a stable regulatory and market framework in order to:
•
Attract investment in power generation and networks to ensure stable and
continuous energy supply that is essential for economic development and social
stability;
•
Create an integrated energy market allowing for cross-border energy trade
and integration with the EU market;
•
•
Enhance the security of supply;
Improve the environmental situation in relation with energy supply in the
region; and
•
Enhance competition at regional level and exploit economies of scale.
25
26
DOSSIER
Insurance and Energy
Inevitable
link in
business
Milica Bojovic
Risk management in the energy sector
is important not only for business
protection but also because this sector is
the basis of any country's industry. NIS
follows the latest trends in the protection
of people and property paying a special
attention to insurance
DOSSIER
Companies have a possibility to provide
safety through insurance so that if
some risk happens they will receive
compensation. Insurance enables the
continuity of business operations and
is one of the most efficient ways of risk
management.
This is particularly important for the
energy sector which enables the continuity of the social reproduction process
by way of providing energy carriers to
all other participants in the economy...
As a consequence of catastrophic floods
in our country in May this year, power
plants were damaged to a great extent.
The extent of catastrophe was reflected
in a report of the Fiscal Council: "Fiscal
movements in 2014 and main recommendations for the budget rebalance",
where it is stated that due to the damage caused to electrical power plants a
drop in the electric power production
could amount to about 10 % of the
plan on an annual level.
Jelena Kocovic, Professor of insurance
at the Faculty of Economics in Belgrade,
says that it is now clearer than ever how
important it is to provide insurance not
only against basic risks but also against
the additional ones, as well, such as the
risk of floods and landslides.
She warns that there are risks of high intensity and frequency in the energy industry. - They include the fire risks and
risks of other harms, risks of equipment
failure and accidents - says Kocovic.
In view of the fact that the economic
and financial environment is becoming
more complex the specialists warn that
the changes in the risk itself, subject
matters of insurance and external factors are more dynamic, and, therefore,
the need to manage the risks is much
bigger than before.
NIS follows the latest trends in the
protection of property and people, and
these matters are specially regulated by
the company policy which is in line with
the insurance policy of Gazprom Neft.
27
28
DOSSIER
Support from
international experts
Igor Basic, Head of the Risk Management Department, says
that insurance activities are centralized in the whole NIS
Group and are dealt with by the Function for Economics,
Finance and Accounting.
- We have support from Gazprom Neft and a brokerage
company Willis CIS in risk placement in the international risk
management market - says Basic.
He explains that NIS obtains services of international
industrial risk assessment engineers for the purpose of risk
management via its parent company Gazprom Neft.
He further explains that the engineers visit once a year the
most sensitive segments of the Company (Pancevo Oil Refinery and the oil and gas preparation and transport facility in
Elemir), where in the course of several days of risk assessment
and talks with lead specialists, including the personal visits to
the industrial plants, they make a complete risk assessment
report with risk elimination or mitigation recommendations.
- Recommendations are reviewed once or twice a year. Based
on that report NIS places our refineries insurance risk in the
DOSSIER
For the purpose of risk management,
Gazprom Neft hires international
industrial risk assessment engineers
international market, with the insured amounts of more than
two billion dollars, and international insurers and re-insurers
take on the insurance risks and set a premium rate which is
the insurance premium calculation basis - explains Basic.
This is the reason, explains Basic, why NIS constantly invests
in this field and provides continuing education and training
for the employees and all clients, suppliers and contractors
who have access to the production facilities of the Company.
Insurance fronting
NIS also concludes insurance fronting agreements, whereby a
local insurance company from Serbia takes on the minimum
risk, while all the remaining risk is placed in the international
insurance market through a brokerage company Willis CIS
with the support of Gazprom Neft, where an international
insurance company is a lead insurer.
These include insurance fronting of NIS refineries in Pancevo,
Novi Sad and Elemir and insurance fronting against liability
and liability excess during fuel loading to the planes at the
airports in Belgrade and Nis.
Furthermore, the Company applies the insurance of capital
projects which is among the most complex ones because it
comprises a great number of risks at the same time during
the period of construction and erection, and also during the
guarantee period and testing.
The usual insurance policies used for covering construction
and erection risks are CAR / EAR all risk insurance policies
(CAR - Contractor's All Risk Insurance - construction insurance, EAR - Erection All Risk Insurance - erection insurance).
Among capital projects, the Company successfully insured
the MHC/DHT and SARU overhaul and construction project
(SARU - Spent Acid Regeneration Unit), during the Pancevo
Refinery revamp (CAR/EAR all risk insurance policies), crude
exploration in Hungary and Romania (OEE all risk insurance
policies - risk insurance in crude exploration).
The Company is currently preparing the insurance for the
Refinery revamp project in Novi Sad involving the construction of base oil production facilities, and there is another
prospective project of deep refining in the Refinery in Pancevo.
What risks to insure
against?
Insurers explain that the first step in risk management is to
select the subject matter of insurance, the property to be insured, and to select the risks to be insured against, i.e. the future uncertain events independent of the will of the insured.
Power plants, according to Mirjana Markovic, the Director of
the Function for Actuarial Activities, Statistics and Solvency
Risk Management in Dunav Osiguranje, can be insured at
the stage of construction, equipment erection, test run, and
exploitation.
She says that these assets are insured against a group of basic
and additional risks - fire risk, natural disaster risks, operational risks, and at the stage of test run and exploitation the
equipment failure risk is also insured.
In addition, power companies may be insured against third
party risks, losses resulting from the occurrence of the above
mentioned basic and additional risks, and there is also employees' insurance against accidents.
- The above listed insurances are the basic insurance protection and safeguard the elementary public interest - explains
Markovic.
The developed countries also have more sophisticated forms
of insurance coverage which refer in the first place to the
various kinds of liability of a power company towards the
employees and third parties, retirement and health insurance,
special insurance programs for the experts, top-management.
Concerning the building structures, typically for NIS, the usual and mandatory insurance risks are fire risks, accompanied
by additional risks such as water spills from the pipelines,
floods, high water level and ground settlement.
Insured worker
In addition to the protection of property, NIS protects its
employees, as well, explains Goran Takic, the Chairman of
the Unique Trade Union of NIS, in the best way.
He points out that the Trade Union has had for many years
a successful cooperation with the Employer regarding the
employee insurance through the Collective Agreement.
He explains that the employees are insured in case of an
accident and hospital treatment, serious diseases, surgery,
death. - Furthermore, the Collective Agreement defines
the voluntary retirement insurance contribution, so that
the amount of 3,910 dinars is paid to the employees every
month - says Mr. Takic.
An employee is entitled to reimbursement from the insurer
on the basis of employee accident insurance, which includes
death in case of an accident, permanent disability, and
death from disease.
An employee is also entitled to reimbursement from the
insurer on the basis of voluntary employee health insurance
in case of surgery, i.e. operations and serious diseases.
29
30
DOSSIER
NIS follows the latest
trends in the protection of
property and people, and
these matters are specially
regulated by the company
policy which is in line with
the insurance policy of
Gazprom Neft
When it comes to the stocks, NIS has
insurance against fire risks concerning
the stocks, and among the additional
risks there are the risk of stock spills
from fixed containers, water spills from
the pipelines and flood, torrent, high
water level.
In the field of burglary and larceny
insurance, NIS is insured against the
usual risks of armed robbery, theft
of money from a cash register, theft
of money from steel drop safe boxes,
equipment and commodity theft. Casco
insurance covers the damage to corporate vehicles.
Concerning the hazardous cargo liability insurance, NIS has insurance for
damage caused to people, property and
environment, in accordance with the
obligations set forth in the Hazardous
Cargo Transport Act.
In the international transport of oil and
oil products the Company insures the
goods and assets, including the costs of
customs clearance, taxes and any value
increase if necessary.
DOSSIER
Bid selection
within a
tender
After risk detection it is necessary, according to the insurers, to obtain bids
from several insurance companies. That
way, through the bid expertise, which
includes a comprehensive technical
analysis of the scope and quality of
the offered coverage, various other elements of the contract, and finally the
price, the most appropriate and best
bidder is selected.
NIS dealt with this by conducting a prequalification process for all insurers in
Serbia. The following qualified bidders
have the opportunity to work with NIS:
Sogaz Novi Sad, DDOR Novi Sad, Dunav
Osiguranje Beograd, Generali Belgrade,
Wiener Staedtische Belgrade and
UNIQA Belgrade.
All risks for which the
coverage is provided in
Serbia are insured by
the domestic insurance
companies; this includes
the complete property of
NIS and subsidiaries from
the Republic of Srpska,
and a part of property of
subsidiaries abroad
The qualifications are valid through
2015, and after that a new round
of pre-qualifications will be organized.
The insurance services are procured in
a closed tender.
Risk insurance is carried out in two
ways: through local risk insurers and
through international risk insurers for
risks defined by decisions of the Company management, with a mandatory
participation of a local insurer.
Insurance services are obtained for the
whole NIS Group, including its subsidiaries at home and abroad. All risks for
which the coverage is provided in Serbia
are insured by the domestic insurance
companies; this includes the complete
property of NIS and subsidiaries from
the Republic of Srpska, and a part of
property of subsidiaries abroad.
For the risks regarding which it is not
possible to provide coverage, subject
to legal or contractual restrictions, the
Company places the insurance in the
foreign markets where the subsidiaries
operate.
In addition to an annual tender, there
are also mini tenders for the procurement of services upon request of the
Company departments or subsidiaries.
Usually, this includes specific requirements of governmental bodies to provide insurance against certain risks or
contract insurances, insurances which
must be provided in accordance with
contracts concluded with business partners of NIS in the country and abroad.
Quality before
the price
Mirjana Markovic, Director of the
Function for Actuarial Activities, Statistics and Solvency Risk Management
in Dunav Osiguranje, emphasizes that
the insurer's bid must also be based on
the expertise, i.e. highly professional
and multidisciplinary survey of the
subject matters of insurance and their
exposure to the insurance risks.
- It is very important to stress that
with a responsible risk management
system in the energy sector as the
strategic sector for the country, the
quality of insurance must be a dominant selection criterion rather than the
price - she explains.
When estimating the quality of insurance coverage, in her opinion, it is very
important to have in mind that it must
include several things.
In the first place it is the correct insured
property value assessment. Then,
there are all insured risks to which the
property is exposed. Also, there is the
selection of an insurer on the basis of
professionalism of the employees, their
experience and capacity for the performance of the activities - diversified
insurance portfolio, capital, solvency
and liquidity are an important criterion.
Furthermore, the quality of reinsur-
ance coverage provided by the insurer is
very important, which means, first and
foremost, the international rating of the
reinsurer, because it sometimes bears
the largest portion of liability arising
out of an insured event.
Insurance and
savings
With systematic risk insurance management the companies not only protect
their business activities, but also experience a constant insurance premium
cost reduction each year with the same
or partially increased insured sums.
That way, for example, through the centralization of insurance activities in the
NIS Group and by applying "the concept
of self-insured retention" (franchise, or
the share of the insured in a damage
case), in accordance with the company
policy the Company achieved 27 % insurance premium savings in comparison
with 2013, and 66% insurance premium
savings in comparison with 2010.
31
32
EVENTS !
! EVENTS
The 21st World Petroleum Congress in Moscow
Responsibly
Energising a
Growing World
Author: Dr Pierce Riemer,
Director General of the World Petroleum Council
Often called
“the Olympics of the oil
and gas industry”, the
21st World Petroleum
Congress, which
was held in Moscow
this year, provided
excellent opportunities
for networking and
building international
cooperation and a unique
chance to learn about
the latest scientific and
technological advances
in the global oil and gas
industry
Given the constantly growing world’s population,
“
the availability of accessible, safe and reliable energy
sources will become the key factor in improvement of
economic development and welfare of manhood.
”
Dr Pierce Riemer,
Director General of the World Petroleum
Council
Every three years the World Petroleum
Council hosts its global Congress.
Back in 1971 the Congress was held in
Russia and now 40 years later we were
back and a lot has changed.
With over 55,000 m2 exhibition space,
5000 attendees and more than 500
CEO’s, presidents and government ministers attending, the 21st World Petroleum Congress was the largest global
oil and gas event held in 2014. From
the 15th to the 19th of June,Moscow
became the world’s oil and gas capital.
Often called “the Olympics of the
oil and gas industry”, the Congress
providedexcellent opportunities for
networkingand building international
cooperation and a unique chance to
learn about the latest scientific and
technological advances in the global oil
and gas industry.
DEVELOPMENT OF
THE GLOBAL OIL
INDUSTRY
One of the most respected experts in
the field of petrochemistry and refining, Academician Salambek Khadzhiev,
confirmed that the programme reflected the current status and development
prospects for the global petroleum
industry. The issue concerning the development of Arctic Shelf hydrocarbon
resources was prominently included in
the programme, as well as a number
of issues relevant to Russian industry
and science, regarding refining and
petrochemistry.
“It is important for Russia to discuss
new technologies for downstream
processing with global oil and gas experts, as this remains one of the most
pertinent problems for this country.
But Russia has the opportunity to turn
this gaparound to its advantage: today,
new processes are being developed –
more effective and less ecologically
damaging than those which have been
launched in the US and Western Europe in recent decades,” said Academician Khadzhiev in his conclusions.
The Congress addressed this ambitious
goal by debating all aspects of energy
supply and energy use. As the world
population increases, access to affordable, safe and reliable sources of energy will be a key factor in promoting
economic development and well-being
for humankind. Oil and natural gas
will continue to be the world’s leading
energy resource for the foreseeable
future. Meeting future demand in a
sustainable and socially responsible
manner will require massive invest-
33
34
EVENTS !
! EVENTS
ments, leading edge technologies, the highest skilled human
resources, and superior ethical business practices. Producers,
consumers, governments and societies need to cooperate
responsibly to develop all energy resources. To do so, the industry has to energise its professionals; in particular youth,
to become even more innovative in ensuring future growth.
TAX BURDEN
Tax burden was an issue many agreed upon. In his opening remarks Rosneft chief executive Igor Sechin highlighted
that the main reason why oil and gas costs so much is that
the production costs are very high. The tax burden for oil
and gas projects is sometimes double that of other industries despite the fact that this energy is needed.India's
Minister of Petroleum & Natural Gas, Dharmendra Pradhan
proposed that transparent regulatory policies and business
climates that favour investment in technology are key to
industry continuing to commercially exploit oil and gas.
The Deputy Prime Minister, Russian Federation, Arkady
Vladimirovich Dvorkovich agreed that there is a need to
reduce tax and other fiscal burdens – relative to conventional hydrocarbons – if nations want to ensure that their
unconventional resources (shale and tight oil plays) attract
interest and investment.
ways to properly stimulate investment in its oil and gas resources. Russia can see the possible impact that
The participants of the greatest global
petroleum and gas event have discussed
all aspects of energy supply and
utilization
The majority of Congress
participants has identified
tax levy as one of the
biggest issues
the switch to renewables in Europe
and the expansion of LNG could have
on its oil and gas industry.
In the Global Launch of the BP Statistical Review of World Energy 2014,
which for the first time took place
outside BP company premises,Christof
Rühl, BP’s chief economist, introduced
a general review and outlook for the
industry must expand into new areas balanced with “wise
industry. The US tight oil boom and
environmental stewardship.” Thisinvolves managing mobile
Financing the
oil and gas
industry
the North American unconventionals
with a potential 8 billion barrels of oil equivalent (BOE) still
The oil and gas Industry will need
The industry’s “éminencegrise”, Daniel
to be discovered. Russia and Norway are leading the field
$1 trillion per year over the next 20
Yergin, saw positive signs of develop-
and Nicholas Alan Maiden, SVP of Exploration at Norway’s
years, a steep requirement made
ment in other parts of the Americas.
Statoil, thinks that the billion dollar drilling activity is reflec-
more challenging by the complexity
Mexico has taken inspiration from the
tive of the conditions and value of wells in the region. “The
of projectswhich requires a diverse
North American tight oil boom and
Arctic offers tremendous potential to meet future global en-
mix of financing models required
is aggressively looking to open up its
ergy demand and we need to do this in a safe and responsi-
from private equity to local banks. BP
resources to international operators –
ble fashion,” Hamilton said.Statoil already have a dedicated
chief executive Bob Dudley warned
oil production in Texas alone cur-
Arctic operations unit, and the company announced it will
that governments of countries with
rently outstrips that of all of Mexico.
The easy to extract oil continues to diminish and en-
be going ahead with plans to build its own Arctic Offshore
oil and gas resources need to rec-
He pointed out that the US unconven-
hancedoil recovery [EOR] is being implemented to increase
Drilling rig to “explore and develop the Arctic basin in a safe,
ognise that oil companies currently
tionals boom was not driven by large
revenues from ageing fields. Unconventional exploration
sustainable and cost-effective manner.”The Norwegian Pe-
have constrained capital, and so
oil companies, but by small indepen-
and production provide solutions for additional resources,
troleum Directorate, announced that it has plans to award11
need to introduce the right business
dents, entrepreneurs who tried and
including shale gas, oil sands, ultra-deepwater and the Arc-
to 15 licenses in the Barents Sea over 2014-15.
environments and incentives in order
tested totally new technology.
New Frontiers
pack ice and icebergs, permafrost, remoteness, extremely
low temperatures, storms, icy waves and low visibility in
an ecologically sensitive environment, according to Jed
Hamilton, a senior consultant at Exxon Mobil’s Upstream
Research unit.
drive in general were mainly behind a
growth in OECD oil demand in 2013.
Supply disruptions – in places like
Libya, Iraq and Iran – were counterbalanced almost barrel-for-barrel by
the rise in US oil production last year.
Nearly 72% of resources in Barents Sea remain undiscovered
tic. With the Congress being held in Russia, this was a major
topic for the event.
The largest
ever oil and gas
exhibition
The World Petroleum Congress was
supplemented by the World Petroleum Exhibition (WPE) showcasing
the industry and its key players on
the global level. Covering 55,000
sq.m., the exhibition is the largest
ever in the WPC history as well as
the largest oil and gas event ever to
be held in Russia. More than 3000
global operators, contractors, suppliers and services presented their
companies and strategic operations
in front of over 20,000 visitors.
to attract companies to exploit the
Of the 113 Russian offshore blocks, 67 are in the Arctic.
resources. Countries that fail to do so
The event closed to great acclaim
Rosneft has already partnered with ExxonMobil, Eni and
will see large projects fail to materi-
with a rousing Closing Ceremony after
According to the US Geological Survey, the area north of the
Statoil.“Abnormally high reservoir pressure and good poros-
alise, and will have to import hydro-
a week of high-level presentations,
Arctic Circle has an estimated 90 billion barrels of undiscov-
ity in the Russian Arctic fields generally bodes well. Russia
carbons rather than move towards
discussions, debates and networking
ered, technically recoverable oil, 1,670 trillion cubic feet of
needs to cooperate with oil majors to tap the potential. The
self-sufficiency.
on the general consensus that it had
technically recoverable natural gas, and 44 billion barrels of
findings could be as surprising as US shale, the scale of
technically recoverable natural gas liquids in 25 geologically
which took everyone, including the Americans by surprise,”
Russia’s Deputy Energy Minister for
the World Petroleum Council. Minister
defined areas thought to have potential for petroleum.
explained Vasily Bogayavlensky, Deputy Director of the Oil
Oil and Gas, Kirill Molodtsov, acknowl-
Novak passed the baton to the host of
Canada, Norway, Russia and the United States are all
and Gas Research Institute at the Russian Academy of Sci-
edged that the Russian government
the next World Petroleum Congress,
looking at developing their resources in that region. Rex
ences.But Bogayavlensky admitted general knowledge and
is aware of the capital constraints on
Turkey, who will be organising the
Tillerson, Chief Executive of ExxonMobil, told delegates the
studies of the Arctic were in his opinion very poor.
oil companies and is actively seeking
22nd WPC in Istanbul in 2017.
been another world-class Congress for
Mr Kirill Kravchenko, the Chief Executive Officer of NIS, attended 21st World
Petroleum Congress in Moscow, where
he spoke about transformation from
petroleum into energy companies
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New Strategy of Wholesale and Corporate Sale
Road to
Success
Anatolij Pomorcev
At the right time, at the right place,
with professionals… NIS successfully
introduces the new strategy of wholesale
and corporate sale of company products
The need for reforming the wholesale and corporate sale
model appeared on the NIS management agenda towards
the end of 2010. A full liberalization of the petroleum product
market in the country was planned for the very first day of
the following year, after which the company was to irrevocably lose the monopoly in the Serbian market (the state borders opened up earlier still for importing Euro-standard diesel
fuel, which NIS produced in limited quantities up until 2012).
Surviving in the wholesale market, amid fierce competition
and with the modernization of the Company’s refining complex still in progress, and retaining corporate clients to boot,
could only be pulled off through a U-turn in the approach to
wholesale and work with company corporate clients.
Optimizing wholesale
Up until 2011, in its monopoly position, NIS was practically
the only player in the wholesale fuel market and the Government of the Republic of Serbia argued that the additional
Company profit was to be invested primarily in reconstructing the Company refining capacities. Several tens of businesses were an exception and they had permits allowing
them to import the so-called Euro-diesel into the country.
NIS produced limited quantities of this fuel, and so was unable to meet the demands of the market.
The first step in the optimization of wholesale was the
decentralization of business processes and establishment of
four regional wholesale centres: Belgrade, Novi Sad, Niš, and
Čačak, covering thus the entire territory of the Republic of
Serbia. Privately-owned petrol stations used to be supplied
only from Belgrade, so the changes implemented in the
wholesale network resulted in the increase of efficiency and
shorter times of delivery of fuel to the end user. Only a small
segment remained centralized – fuel oil sale and petroleum
product transit deliveries.
In addition, in order to have a balanced and attractive price
policy, it was necessary to create such instruments as would
allow the price policy to be adjusted quickly in response to
the market demands. This is precisely why in 2011 a wholesale price monitoring system was developed and implemented in the Serbian market; when sale channels appeared outside of Serbia, it was implemented in other countries as well.
With the help of this system, accurate and timely information on the condition of the markets in which the Company
conducted business became available to the NIS Group sales
division. Later on, in 2012, the implementation of the model
for calculating the impact of changes of petroleum product
quotes and the dollar exchange rate on wholesale fuel prices
was completed. This instrument allowed daily monitoring of
the market indicator fluctuations, as well as calculation of
the margin for each Company warehouse.
In the words of Yusif Abbasov, Deputy Director of NIS Sales
and Distribution responsible for supply, logistics, and commercial matters, it is essential that all participants in the
dialogue follow the dynamic of petroleum product dispatch.
“The contracts precisely define the deadlines and quantities.
The work algorithm of the modernized Pančevo Refinery,
which is in strict conformity with the sales plan, helps us
meet our obligations, “ Abbasov points out.
Establishing the NIS Pricing Committee in 2012 was a special
step taken in the sale reform. Representatives of organizational units take part in the operation of the Committee,
and control all the channels through which the petroleum
products produced by the Company are sold. The operation
of this body enables flexible responses to the market situation and efficient coordination of the retail and wholesale
pricing policy. The coordinated efforts aimed to increase
wholesale have yielded positive results – the accumulated
growth (taking into account the 2011 drop in sales) for the
period between 2011 and the first half-year of 2014 stood at
3 per cent.
But it would be a mistake to consider wholesale without one
of its main segments –relations with corporate clients. Corporate client relations create the company image in a business
environment, and are an indicator of success.
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38
indusTRY&BUSINESS
ADVANTAGES OF
INTEGRATION
In the period preceding the liberalization of the Serbian petroleum product market, the Company fuel (above all petrol
fuels and D-2 diesel) was purchased by virtually all the state
bodies in the country as well as big businesses, but the majority of them had difficulty paying. For all intents and purposes,
the instruments of collaboration with solvent, commercial clients did not exist – the corporate sale strategy up to 2011 was
often founded on the special status of the Company as “the
supplier one cannot avoid”.
It would obviously be overconfident to rely on the success
of such a strategy in a free competition environment. This is
precisely why, soon after the full liberalization of the Serbian
fuel market, the efforts of the Sales and Distribution management resulted in creating a long-term strategy of corporate
sale development in the period up to 2020, which is adjusted
every year in response to the macroeconomic situation in
Serbia and the region.
indusTRY&BUSINESS
After the full liberalization of the
Serbian fuel market in 2011, a long-term
strategy of corporate sale development
in the period up to 2020 was created,
and is adjusted every year in response
to the macroeconomic situation in
Serbia and the region
“At the moment we are finalizing the strategy of local and
regional development of this business segment. The ideas are
many, and so are the possibilities for implementing them, but
the time is short, as always. In this business segment, also
known as V2V, it is necessary to plan three to four years ahead,
and that is no mean feat amid a permanent economic crisis in
Serbia and the region, “ Yusif Abbasov argues.
In the process of reforming the Corporate Client Sector, which
was transformed into a department bearing the same name,
the decision was made to abandon the functional principle of
the division of labour, in view of the fact that a portion of the
employees is responsible for attracting buyers, and another
portion for providing support for concluded contracts. Instead, a
horizontal-type network has been created: a regional representative office is given the whole responsibility package, from attracting buyers through contract monitoring to providing a wide
range of support services. New services were also added – from
now on owners of the corporate fuel card can use it to pay for
car wash or for purchases at NIS petrol stations. In line with the
new requirements, the client base has been systematized, and
its application adapted to the new work conditions.
Enhancing the security of fuel card use was an important task,
aimed to reduce the risk of abuse both by owners and by petrol
station operators. The Sales and Distribution experts worked
on this alongside their Corporate Security colleagues, and the
number of abuse cases has plummeted as a result.
RESULTS AS RECOGNITION
Corporate retail and wholesale management: Yusif Abbassov
(third from the left) with Serguey Suslov, Vojkan Janićijević and
Aleksandr Makarevich (from left to right)
The results were not long in coming – as early as 2012 the
issues of client debt were being resolved, contract numbers
were going up, and sales via corporate channels, as evidenced
in 2014 Q1 results, rose by 59 per cent, compared against the
2011 indicators. The number of contracts concluded with corporate clients
went up by 17 per cent in 2011, standing at 21 per cent in the following year,
and reaching 12.3 per cent in 2013.
“Active introduction of advanced technologies is an important point in the
development of all kinds of sales, not
just corporate. First and foremost, we
have started to work on the automation
of our servicing systems for big clients,
together with our colleagues from the
NIS Call Centre,” Abbasov adds.
In addition, in 2013 the website (www.
nispretrol.eu) was launched with
corporate clients in mind. Using this
website, operational access to current
information, the option of submitting
online requests for the conclusion of
contracts, and contract management
in the CMS system are available for the
present and future clients. In the SAP
system, CRM and SBA have been introduced as integral components of active
sales and post-sale monitoring in the
global market environment at modern,
vertically-integrated companies.
The start of the NIS regional business
sale development has affected the rate
of development of corporate sales as
well. After the period of business process synchronization, the volumes of
sales to legal entities exceeded the indicators of OMV petrol stations in Bosnia
and Herzegovina before NIS bought
them. Also, efforts have been put in to
introduce the same business schemes
in Romania and Bulgaria, where NIS
has a significant number of petrol stations and many logistical strengths.
“We have introduced the system of sale
channel management. The responsibility matrix is already developed, or,
more specifically, the redistribution of
responsibilities between the central
office and the “daughter”, which operates in the field. The processes are
synchronized, and the positive impact
is already evident in our current operations, “ Abbasov holds.
“
Active introduction of advanced technologies is
an important point in the development of all kinds of
sales, not just corporate. First and foremost, we have
started to work on the automation of our servicing
systems for big clients, together with our colleagues
from the NIS Call Centre.
”
Yusif Abbasov
Deputy Director of NIS Sales and Distribution responsible
for supply, logistics, and commercial matters
The task of the Corporate Sales Department and the Sales and Distribution
division for the entire upcoming period
is integration of the system of mutual
fuel card acceptance at the regional
level. This would presumably make it
possible to attract clients from different countries to the regional network
of Gazprom petrol stations and NIS,
in all of the four countries where the
Company conducts business: Serbia,
Bosnia and Herzegovina, Romania, and
Bulgaria. It is safe to assume that even
in the unstable regional economy the
use of fuel cards will have the expected
effect. This projection is based on highly
specific data indicating the rise in
popularity of this means of payment. In
2011, the number of issued cards went
up by 43 per cent, in 2012 by 25 per
cent, and in 2013 by 24.5 per cent.
Alexander Malanin, Deputy CEO of NIS
and Director of Sales and Distribution,
says that by the end of 2014 the project
of unifying the corporate systems of
cashless payment among Serbia, Russia, Romania, Bulgaria, Kazakhstan,
Kyrgyzstan, Tajikistan, and Belarus will
be launched. Once the integration is
complete, we will be ready to break into
Western European markets. I would
like to stress the fact that without the
help of our colleagues from Gazprom
Neft it would have been very difficult
to achieve all of this. Their experience
and expert advice, even direct involve-
ment in our development, have made it
possible to take this line of business to
a higher level of quality.
In conclusion, active development of
corporate sales and wholesale has made
a significant contribution to the increase
of the total NIS share in the Serbian
petroleum product market in the period
from 2011 until the end of 2013. NIS
retail network has certainly made its
own contribution as well, but a strategic
approach to the planning of wholesale
and cooperation with corporate clients
have enabled the Company to become
a serious and most reliable long-term
fuel supplier, even for the competitor
networks in Serbia and the region.
Compared to 2012, the
number of contracts
concluded with corporate
clients went up by
12,3 %
in the last year.
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Compressed Natural Gas
Cleaner
Future
Ana Krajnc
Over the last decade, the number of
natural gas vehicles has grown globally
by 15% a year. The European Union will
invest around EUR
160 000 000
in the construction of infrastructure for
compressed natural gas (CNG) loading
terminals, so as to enable CNG to become
a sustainable alternative to gasoline and
diesel fuel at the old continent
With the lowest carbon-dioxide emission, compressed natural
gas is believed to be one of the most promising, environmentally-friendly fuels of the future. In addition to the environmental aspect, the benefits of using compressed natural gas
(CNG) are a considerably lower price of fuel in exploitation
and sale, and its role in promoting energy independence from
accessible petroleum fuel reserves. Conversely, the high price
of vehicles due to CPG tank installation and engine conversion to CNG, underdeveloped infrastructure – network of CNG
filling stations in many countries, as well as the high cost
of vehicles for CNG transportation to filling stations are the
main obstacles that stand in the way of a more widespread
use of this fuel type.
According to NGVGlobal 2013 data, there are 18.09 million
natural gas vehicles in the world, which is less than two percent of more than one billion vehicles on this planet. Nevertheless, taking into account that there were merely 1.7 million
CNG-powered vehicles in 2001, their number has evidently
been increasing by around 15 percent annually over the past
decade. The association of natural gas vehicle manufacturers
forecasts that the share of these vehicles will increase globally by 2020 at an annual rate of as much as 18 percent.
Most CNG-powered vehicles, around 70 percent, are driven
in only six countries in the world, namely in Iran, Pakistan,
Argentina, Brazil, China and India. As for the European Union,
Italy has by far the largest number of natural gas vehicles,
around 820,000. The reason is its openness to new makes
produced by domestic car manufacturer Fiat, but also cheaper
fuel. The number in Germany, however, is 96,000, in Russia
it is slightly above 90,000, whereas Ukraine has as many as
388,000 CNG-powered vehicles.
EU Targets
There are currently slightly over a million CNG-powered cars
EU-wide, which is around 0.5 percent of all vehicles in the EU
member states. The car industry’s 2020 target is five percent,
most of which is anticipated in Bulgaria, Germany, Italy, the
Netherlands and Sweden.
The European Commission’s expert analyses pinpoint three
main obstacles to a more widespread use of this environmentally-friendly fuel, namely the high price of vehicles, low user
acceptance rate and low CNG filling station network coverage
in most of Europe.
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NGVs and filling stations in the region
Top 10 countries using NVGs
Country
Vehicles (in million)
Share in global NGV number (%)
Iran
3.50
18,61
Pakistan
2.79
15,74
Argentina
2.28
Brazil
Country
No. of NGV
No. of filling stations
Bulgaria
61,270
102
12,66
Hungary
4,062
3
1.75
9,84
Serbia
1.57
8,89
838
8
China
India
1.50
8,46
Croatia
155
2
Italy
0.82
4,77
Slovenia
48
2
Columbija
0.46
2,54
Uzbekistan
0.45
2,53
Macedonia
54
2
Thailand
0.42
2,33
Bosnia and Herzegovina
21
/
Source: NGVGlobal
In January 2013, the European
Commission announced a series of
measures to encourage and provide
for the construction of alternative fuel
stations around Europe that would
meet equal standards regarding design
and use. It was proposed that CNG filling stations be located at a maximum
distance of 150 kilometres all over
Europe by 31 December 2020. The construction of CNG stations is estimated
to cost the European Union around 160
million euros.
The idea is to ensure free travel for CNG
vehicles across Europe and make CNG a
sustainable alternative to diesel fuel.
The availability of compressor stations varies between countries. There
are nearly 20,000 public CNG stations
around the world, whereas in Europe,
according to Cngeurope.com, Italy has by
far the largest number of stations, as
Source: NGVEurope
many as 999, followed by Germany with
912 and finally Austria with 176.
This field is still in its infancy in the region, except in Bulgaria which has more
than a hundred public gas stations.
Vasil Katinčarov, a European Commission fuel quality expert living in Bulgaria, says that savings are the main
reason behind such a large number of
gas-powered cars in this country. "CNG
is twice cheaper than conventional liquid fuels and biofuel, and consumption
per kilometre is also lower," he says.
In Croatia there are only two public
CNG filling stations in Zagreb and
Rijeka. Montenegro has none, while
B&H has only one internal CNG filling station in Sarajevo. There are two
such stations in Macedonia, namely
in Skoplje and Kumanovo, as well as
in Slovenia, namely in Ljubljana and
Jesenice.
In Serbia, there are currently two stations in Pančevo and Belgrade each, one
in Kruševac, Kraljevo, Čačak and Niš,
while the country’s second-largest city,
Novi Sad, after many years of anticipation, is still waiting for its public CNG
filling station to open.
Plans and
Expectations
It is due to the very fact that CNG sales
network is so underdeveloped that NIS
has launched a pilot project for preparation and compression of natural gas at
Palić oil and gas plant. New facilities are
also planned to be constructed i.e. one
will be constructed by the end of 2014
at Novi Sad 10 petrol station, and three
new facilities are planned for 2015.
The oil and gas plant at Palić was put
into operation on 1 July this year. According to Velibor Đurić, B-C Projects
Manager in charge of the construction
of compressed natural gas plant within
Energy, the daily output and delivery is
currently around 7,000 kg/d.
“For vehicles with average CNG tanks
as currently used, it is possible to fill
around 200 vehicles per day," Mr Đurić
explained.
NIS has invested 540,400 euros in
constructing this plant under a turnkey
contract with GasTeh. Mr Đurić says that
functional testing will soon be finished
and final calculations will be made
upon acceptance.
"The first phase includes know-how
pilot projects like Palić and will be
used for wholesale or industries using CNG as energy source for burners
that are currently using heavy fuel oil,
diesel fuel etc. Five locations are being
analysed for the purpose and it is likely
that two to three mobile units will also
be built up. Apart from these projects,
the pilot project at NS-10 PS will serve
as the basis for developing a network
of plants producing CNG for passenger
and specialised vehicles and buses,"
said Mr Đurić.
He went on to say that car industry was
soon to start using NIS' high-quality
CNG primarily with an aim to reduce
emissions of noxious gases and suspended particles.
According to the latest data on CNG
sales in Serbia, Panledi Pančevo leads in
wholesale (around 70t/d) and Criogas
Novi Beograd in retail of CNG (passenger
vehicle consumption is around 7,000
kg/d, or around 200 vehicles/d, while
the rest is for buses).
Only slightly over a million
natural gas vehicles are
driven in the EU, which is
around
0,5%
of all vehicles in the
member states
43
44
indusTRY&BUSINESS
Environmental
benefits of CNG
compared to other
fuels:
90%
less emissions of volatile
hydrocarbons
30%
less hydrocarbon
emissions emissions
60%
less nitrogen oxide
emissions
65%
less carbonmonoxide emissions
indusTRY&BUSINESS
Impediments to
More Extensive
Use in Serbia
Taking into account that CNG is a relatively new energy source in the local
market, NIS made the Marketing Study
in 2012 aiming to examine the demand.
Mr Đurić says that chief impediments
to using CNG in Serbia are no CNG
regulations and an underdeveloped filling station network in Serbia.
"Fuelling must be available along main
roads, at every 100 kilometres. Another
problem is the fear of the unknown and
the misconception that this fuel is dangerous due to the high pressure when
used," he says.
After the testing period of six months,
Serbia will receive precise indicators
from NIS and will be able to develop a
network tailored to its customers.
"We have launched the pilot project
cautiously, avoiding major investments
and the problem of underused capacity.
The experience from an internal pump
of Srbijagas after more than ten years
of operation suggests that there should
be around ten vehicles a day in the
initial period," says Mr Đurić.
Ivan Blagojević, assistant professor at
the Motor Vehicle Department of Belgrade Faculty of Mechanical Engineering,
says that the scope of gas usage for passenger vehicles in Serbia does not meet
the expectations from few years ago.
"CNG use in Serbia has always been
marked with ups and downs depending
on fuel price and installation, but has
never become massive," he explains.
As regards freight transport, the low
use rate in Serbia is believed to stem
from the cost of initial investment, even
though CNG in freight transport which
entails huge mileage proved to be costeffective, like in Russia.
Cleaner
Cities and
Government's
Role
The government has the greatest leverage in extending the use of alternative
fuels, both through benefits and positive
campaigns. Buses, for example, which
are one of the major air pollutants in
urban areas, were increasingly converted to CNG in many European capitals
including Paris or Berlin through various
initiatives, city projects and subsidies in
the past decade. In the City of Bologne,
for instance, CNG-buses account for 90
percent of the public transport vehicles.
Mr Blagojević said that western countries give incentives, especially for use
in city and freight transport, while some
even provided subsidies for engine
repair. Poor as it is, Serbia offers no such
possibility. Neither is there any domestic regulation governing the matter of
CNG whatsoever.
NIS' high-quality CNG
would soon be used in
car industry primarily
to reduce emissions
of noxious gases and
suspended particles
Average CNG prices
in the region
Serbia
“Back in 1995, I was involved in the first
pilot project of installing CNG equipment in several vehicles of GSP Beograd,” Mr Blagojević says. The Faculty of
Mechanical Engineering and the Faculty
of Mining and Geology and the City of
Belgrade were all involved in the project
and everything started very ambitiously.
A plan has been prepared for the entire
project, but everything stopped when
the money ran out. To be more precise,
it stopped with the construction of CNG
filling stations. At that moment Serbia
had two filling stations, one of which
was in Belgrade.
There have been few more attempts,
as Mr Blagojević says, to increase the
number of methane-powered vehicles
in transport companies GSP and Lasta,
but have not gone any further from
having a few buses remodelled.
According to Slavica Stevanović of
Belgrade’s Public Transport Service, the
construction of gas station is underway. However, since it involves large
financial resources, it is uncertain when
the project will finish. In 2011 GSP
purchased 10 new gas-powered buses
and they are still used in the capital’s
public transport. It is still a very small
number against a total of 1,019 buses in
Belgrade. Novi Sad also purchased six
buses a few years ago, but there is no
news of new purchases to be made by
this city either.
0,75 €/kg
The European
Commission’s expert
analyses pinpoint three
main obstacles to a more
widespread use of this
environmentally-friendly
fuel, namely the high
price of vehicles, low
user acceptance rate and
low CNG filling station
network coverage in most
of Europe
In the region, Bulgaria has the most
developed bus programme. The transport service lines in five largest cities
as well as intercity lines are covered
by 105 CNG buses. Out of a total of
61,000 passenger vehicles, as much
as 95 per cent have been converted to
CNG, mainly to make savings, even 75
percent being taxis.
Despite all the impediments to using this gas type, CNG is regarded as
the fuel of the future because of its
environmental properties, and judging
from the current situation, the price is
not an insignificant factor either.
Bulgaria
0,90 €/kg
Croatia
1,16 €/kg
Italy
0,99 €/kg
Macedonia
1,04 €/kg
Slovenia
1.22 €/kg
Cngeurope.com
45
46
intervIEW
interVIEW
Miloš Stanković, inventor
Young people
need support
Vesna Lapčić
It is my wish to make a contribution
to the development of a society based
on knowledge, intuition, and courage. I
would like to see my inventions serving
as a basis for the production of a great
many practical devices, creating thus an
array of new export products which could
help the economy move forward
Even though he has turned thirty just this year, Miloš
Stanković has about 30 inventions under his belt, many of
which have gained international recognition. He gets his ideas
out of the drive to solve problems, and is actively involved in
the areas of ecology, energy, and electrical engineering. Unlike
many of his colleagues who have left the country in pursuit
of greater support and opportunities to develop and improve,
this young innovator is trying to achieve his goals in Serbia. So
far he has only gone abroad on business, but he does not rule
out the possibility of leaving permanently. Nonetheless, he
would like to stay on. “At the moment I’m in Serbia because
of my family, work, and PhD studies. The truth of the matter
is that in our country initiative and hard work are not considered as valuable as they should be, in the degree in which
talent is appreciated and supported in other markets. In more
developed markets, working on innovations is especially appreciated. This is why many of my colleagues have left the
country. Recently I’ve often travelled abroad on business, and
now I’m in negotiations with foreign and domestic companies
over starting mass production of one of the inventions. I cannot say that I will never leave, but that’s not the plan at the
present moment,“ Stanković says in a statement for Energize.
It is nice to create, invent, and develop new projects,
but every scientist’s dream is to see his idea applied in the economy,
to “get off the ground”
You have won numerous recognitions both in the
country and abroad. What do awards and recognitions
mean for inventors?
International recognitions are very rewarding and mean quite
a lot as indicators that relevant and competent international
institutions have acknowledged and recognized innovation
and creative contribution. The awards that I have won have
been a source of moral satisfaction, and I think that all scientists appreciate recognition as a confirmation of the value
of their work. Also, when you want to present your work to
foreign institutions or investors, recognitions can be an advantage, especially if the innovator aims to commercialize the
projects. It is nice to create, invent, and develop new projects,
but every scientist’s dream is to see his idea applied in the
economy, to “get off the ground”, so to speak. In view of this,
I see awards as help towards accomplishing this very goal.
My mission is for the projects that I work on to help people in
their lives, because to get awards and afterwards do nothing
in practice is a waste of time and money.
What would truly help you in your further professional development, seeing as you have said on a number
of occasions that you were faced with an unsympathetic
state? What is the extent of support for innovators in
Serbia and in the countries of the region?
A tangible investment in an innovation project would go a
long way in furthering development and production. As far
as professional development is concerned, it is very useful to
collaborate with companies and innovation centres. In addition to Serbia, so far I have had stints of professional development in Russia, Sweden, China, Switzerland, Germany, Japan,
and the US.
Support for innovators in Serbia is lacking. Primarily because
of the lack of funds, but also due to the fact that competent
institutions are often not appreciative. The situation is far
better in the countries of the region, as competent institu-
tions and ministries support innovation projects and cover all
expenses of travelling to international innovation fairs.
NIS is trying to promote young talents through its
“Energy of Knowledge” project. To what extent is company support for young geniuses important?
Company support is very important for young people because they gain new experiences, knowledge, and skills in
practice, which they will need in their further work. This is
why I mentioned before that working in specific companies
(depending on the project) is very important for professional
development. Financial support is also very important for
young talents, as it allows them to present their achievements at numerous competitions and fairs around the
world. The best thing is for the collaboration to be mutually
useful - both for the young talents and the company.
It would appear that you talent has been especially
recognized in Russia? How is it that the majority of the
awards comes from Russia?
The collaboration with the Russian institutions and the Innovation Centre has lasted for more than 10 years. It was in
Moscow that I first (outside of Serbia) presented the innovations at the biggest International Fair of Innovations and New
Technologies – Archimedes 2005. After the fair organizers’ visit to Belgrade, when they visited my stand as well, I received
the invitation from them to come to Moscow. Thousands of
inventors, scientists, institutes, and world companies have
presentations at this fair. The presentation I gave and the
recognition I received was very important for me because a
competent jury of 50 members decided on the awards. My appearance at this fair was in fact a springboard for my career,
and I remember that my family and myself had to borrow
money so that I could go on this trip.
Since then I have been actively collaborating with Russian
institutions, and I often present my projects at their fairs. I
47
48
intervIEW
interVIEW
Company support is very important for young people because they gain
new experiences, knowledge, and skills in practice, which they will need
in their further work
would like to make special mention
of the fact that Russian Army General
Viktor Genrikhovic has awarded me
the Order of Valour and Courage, the
Russian section of the International
Academy of Sciences, of which I am a
regular member, has awarded me the
greatest decoration – the Order and
title of “The Knight of Science”, and the
International Innovation Centre has
awarded me the Golden Order of Creativity, for a significant contribution
to the development of international
science and technology.
In additional to the collaboration
with the countries of the East, you
are actively collaborating with some
Western countries. At the moment
you are collaborating closely with
Swedish institutions? Could you tell
us a bit more about this?
It is true that I am actively collaborating with Western countries. At the
moment I am collaborating with the
Swedish University of Agricultural Sciences and the greatest weeds experts,
with whom I am testing the device for
destroying ragweed. I attended the last
tests in June. Professors at this University will help me improve the product
and make it more efficient, as well as
issue attestations.
What was the response of foreign
experts to the invention you mention, one of your most recent ones –
the device for ragweed destruction?
In their opinion, there is potential,
and I am very honoured that they
invested their knowledge and experience to help me improve the device.
This project is especially significant for
me because my PhD thesis, which I am
currently working on, is based on the
ragweed destruction device.
How difficult is it to commercialize an invention?
Inventions are very difficult to commercialize because substantial funds are
needed for their production and marketing. A product must be technically better
than an existing one as well as more
economical. Key in commercialization
are a good lobby and good marketing.
What are your goals and aspirations, seeing as you were bestowed
by the Vice President of the Republic of China with a lifetime achievement award for extraordinary international achievements at a young
age of 29?
I would like to see my inventions serving as
a basis for the production of a great many
practical devices, creating thus an array of
new export products which could help the
economy move forward and improve the
social condition in general.
It is my wish to make a contribution to
the development of a society based on
knowledge, intuition, and courage, so
that awards are just a way to dotw the i’s
and cross the t’s. I would like to be the
first person to identify the best opportunities and create conditions for developing new technological innovations,
expanding business operations, breaking
into new markets, and creating new jobs.
The vision I have is an innovative approach to social development by
resolving problems before they arise
through developing innovations which
are simply better.
Out of all the areas you are involved in – energy, ecology, electrical engineering - what are you most
interested in? What inspires you,
how do you get ideas for inventions,
and is there one you would like to
make special mention of, and why?
I focus primarily on ecology. Electrical
engineering is the foundation since I
am an electrical engineer by profession,
and I can apply this knowledge in numerous other areas. I am not involved
in ecology because it is popular, but
rather because I truly want to help
people; this is why I have developed the
weed destruction device which uses a
certain frequency and electrical current
to destroy weeds at the root so they
do not not grow in season anymore.
So, without chemicals, pesticides, in
an environmentally-friendly way. I get
ideas out of the wish to solve a specific
problem; first I make drawings and do
calculations, then I develop the prototype and conduct tests; this is followed
by additional modifications, testing, and
technical adjustments of the device in
the research and development stage.
Who is Miloš
Stanković?
Miloš Stanković was born in 1984 in Belgrade, Serbia. He finished the Secondary School of Electrical Engineering in
Zemun, and graduated from the School
of Electrical Engineering in Belgrade,
course of study: Computer Technology;
he went on to study at the University of
Novi Sad’s Technical Faculty, course of
study: Production Management, which
is where he completed his graduation thesis on the topic of innovation
entrepreneurship. Subsequently, he
obtained his Master’s degree at the
Faculty of Applied Ecology in Belgrade,
course of study: Environmental Protection (Master’s thesis: Air Pollution and
Automobile Industry).
He is a researcher working specifically
on innovations. He owns about 30 inventions which have been awarded at
numerous domestic and international
fairs. This year, he was elected honorary member of the National Academy
of Science of Ukraine, while the European Academy of Sciences awarded
him honorary European Inventor Award
in 2014.
In 2013, he was awarded the academic
lifetime achievement award for extraordinary international accomplishments in
the Republic of China. The International
Innovation Centre has bestowed him
with the Golden Order of Creativity for
a significant contribution to the development of international science and
technology in 2012.
Based on the overall scientific and
innovative contributions, effort, hard
work, recognitions and achievements,
the Russian section of the International
Academy of Sciences elected him a
regular member and awarded him the
honorary title “The Knight of Science”.
Russian Army general decorated him
with the Order of Valour and Courage.
Miloš Stanković has been proclaimed
a Worthy Citizen of the Belgrade Municipality of Zemun, and has received
a Citizen Merit Plaque and medal. At
the Serbian Chamber of Commerce,
the Yugoslavian Association of Inventors awarded him in 2002 the Golden
Plaque “Tesla-Pupin” for extraordinary
results in encouraging, developing, and
enhancing social relevance of invention,
for applying innovations, and for a special contribution to the development
and improving of the organization of the
Yugoslavian Association of Inventors. In
the same year he was declared inventor
of the year.
49
50
SOCIAL RESPONSIBILITY
Citizens’
reliable
partner
Vesna Lapčić
Joint action of the local community
and influential business entities
becomes an imperative in modern
business environment. By implementing
the program “Cooperation Driving
Development”, during the last five
years NIS has supported more than
600 projects which have contributed to
development of local communities and
their citizens
SOCIAL RESPONSIBILITY
By implementing the program “Cooperation Driving Development”,
NIS has invested more than
RSD 680 million
in more than 600 projects which have been implemented in local
communities in which the Company conducts business operations
With the aim to improve the quality
of life in the communities in which it
operates, NIS organizes a public competition, “Cooperation Driving Development” every year to support the implementation of projects in sports, science,
culture, environmental protection and
humanitarian projects. The Company
wishes to strengthen partnerships
with the regions in which it operates,
with local authorities and population.
The program “Cooperation Driving
Development” was launched back in
2009 when projects were proposed by
local communities, but in the last three
years projects have been proposed by
their creators, which actually brings to
life the idea that all funds should be
awarded through public competitions.
The Committee composed of NIS representatives and the representatives of
the local government in whose territory
the project should be implemented decides who should be awarded the funds
based on clearly defined criteria. To
date NIS has entered into agreements
with 10 cities and municipalities in
which projects are implemented, and in
2014 it concluded the agreement with
the City of Belgrade under which RSD
20 million have already been allocated
during the first year. Apart from Belgrade, the participants in the competition “Cooperation Driving Development”
are Novi Sad, Niš, Pančevo, Zrenjanin,
Kikinda, Novi Sad, Žitište, Kaniža, Srbobran, Čačak.
JoInt Efforts
for CommunIty
Joint action of the local community and
influential business entities becomes an
imperative in modern business environment which is confirmed by Vojislav
Ilić, Mayor of Čačak, one of the cities
cooperating with NIS within the above
mentioned project. – Companies should
foster “good neighbour” relations with
the community in which they operate as it ultimately results in mutual
benefits. That’s what NIS does, so it is
not surprising that our citizens see it as
a company which belongs to all of us –
Ilić says.
Ilić points out that entering into cooperation agreements with NIS is a great
privilege both for him and for the citizens of Čačak. - In this way, we started
to cooperate with the Company from
which other companies in Serbia, as
well as representatives of local government, can learn a lot – Ilić says.
He added that in its activities NIS shows
that it thinks not only on its own future
but also on the future of citizens. - The
Company shows great responsibility not
only in the field of environmental protection, but also a high degree of social
responsibility – Ilić points out.
Since 2009, more than 600 projects
which contributed to the development of local communities were
supported within the “Cooperation
Driving Development”. The projects
facilitated the operation of numerous
institutions and improved the operation of cultural, educational and sports
institutions. During the last five years
NIS has invested more than $ 680 million. Only in 2014, the support under
the competition was provided for 164
projects in which RSD 110.5 million
will be invested this year.
Mihalj Bimbo, Mayor of Kanjiža says
that owing to the program “Cooperation
Driving Development” NIS motivates
and supports creativity and accountability of organizations and individuals.
- This project contributes to creating a
better future and a more humane society due to which NIS is an important
strategic partner of the Municipality of
Kanjiža. Help and support for vulnerable
people with disabilities, construction or
reconstruction of sports facilities, implementation of international cultural and
sporting events, projects to enhance
environmental awareness of citizens ...
are the interfaces where the Strategy for
Development of Kanjiža Municipality
and NIS’ socially responsible approach
meet – Bimbo says.
One interesting environmental project
was implemented in that municipality.
A solar LED tree has recently started
51
52
SOCIAL RESPONSIBILITY
2014
1.173
number of registered
projects
164
projects for
implementation
RSD
110.500.000
invested
The project “Cooperation
Driving Development” is
implemented in
11 municipalities:
Belgrade, Novi Sad, Pančevo,
Čačak, Niš, Zrenjanin,
Kikinda, Srbobran, Žitište,
Kanjiža, Novi Bečej
Investments in the areas of:
science, sport, culture, ecology,
humanitarian projects
SOCIAL RESPONSIBILITY
During public competition,
priority is given to
concepts which should
basically assist children,
youth, persons with
disabilities, elderly
people…
working in the Technical School “Besedeš
Jožef” in Kanjiša. Solar panels are placed
on the structure in the shape of a big
tree. Solar LED tree uses the sun as a
renewable source of energy for providing
light to the environment. Not only that a
schoolyard is lit in this way, but sustainable development and environmental
protection are also promoted.
Zoltan Šarnjai, Head Master of Technical School “Besedeš Jožef”, which is the
creator of the project, says that the
installation of a solar LED tree at the
school’s entrance has an aesthetic, sociological and educational message and
functional value. – The oldest European
vine variety, 400-year-old Slovenian
vine variety “Žametnina” was planted
around this futuristic design and it
symbolizes the natural solar power.
Classes in nature can be organized in
this refined space and it is also a perfect
place for students' socializing activities. The functional value of the project
is reflected in the modernization of
school entrance lighting and savings.
We would not be able to implement
this project without NIS’s support and
the implementation team members
who believe that modern can be both
useful and aesthetic, while at the same
time it conveys a message about the
importance of sustainable development
- Šarnjai explains.
AssIstance to
Vulnerable
Groups
During public competition, priority is
given to concepts which should basically
assist children, youth, persons with disabilities, elderly people as well as to projects that improve physical conditions for
long-term development in these areas.
The Association of Paraplegics of Banat,
with the member count of 96, was
granted funds for the implementation of
the project “Čep za hendikep” (Cap the
Handicap) last year.
Tihomir Đurić, Secretary of the Association of Paraplegics of Banat, says that
they would not be able to implement
the project without the funding received
from NIS. The idea of this project was to
promote and protect the environment,
but also to help people with disabilities
to obtain medical aids. - One of the most
expensive parts of the project was the
logistics, because it was necessary to
go and collect bottle caps. We used the
money we were awarded after the public
competition “Cooperation Driving Development”, for these purposes and project
promotion - Đurić says.
As a result of this project, Snežana
Nikolič obtained lightweight active
100 %
of total funds under the
program are allocated
exclusively through public
competition
wheelchair which will facilitate her
engagement in various projects implemented in relation to strengthening
the rights of persons with disabilities
to a great extent. - Lightweight active
wheelchairs are very expensive and only
disabled persons with a driver's license
can obtain it under social security
coverage. Thanks to the project “Cap
the Handicap” and in particular to NIS
support without which the project could
not be implemented, I have practically
been given the freedom of movement.
Otherwise I certainly would not be able
to afford such a wheelchair, and everyone who has remembered to support us
should be given credit. Many people do
not know, but the wheelchair available
under social security coverage is very
heavy, and when I used it I was not independent to the extent I am now with
this orthopedic aid - says Nikolič.
The sound library was launched at the
website of the Association of the Blind
of Vojvodina www.ssv.org.rs with the
support of NIS, enabling users with
visual impairments to listen to, and/or
read books. Vladan Petrović, a longtime
user of the Sound Library, says that the
upload of audio books on the Internet
is a great step forward and that books
have never been more accessible. - I love
to read and now I can do that in the
simplest way, on the Internet and by using my password. Up to now, books were
recorded on a digital reader and Iwe still
had to wait to get a new disc which I had
to take over and it often happened that
a book I wanted to read was already issued to another user, which now cannot
happen - Petrović explains the importance of this project.
The main objective of successful companies like NIS is certainly to assist the
community to develop, or at least to
have such an objective. – Culture cannot
finance itself. NIS has no obligation to
support these projects, but I'm very happy that it has recognized the importance
of online sound library – Petrović adds.
LearnIng
Freely
A math teacher from Niš, Saša Popović,
has designed the online project “Learning Freely Academy” which was granted
NIS support. In 2011 he started to upload
short video clips on YouTube in which he
gradually solved problems in mathematics, which eighth grade students used to
prepare for the final exam. Popović says
that the Government’s support to social
activism in the fields of education is almost negligible. - This is why the support
of socially responsible companies such
as NIS is invaluable for the development
of civil society in the education sector.
Thus, the companies like Google and
Microsoft in the United States are main
donors in similar projects. Although
it might seem illogical, big companies
have an interest in supporting educational projects because only educated
societies can be advanced and provide a
good business environment for further
business operations - says Popović.
He adds that projects of this scale which
are non-commercial require thousands
of hours of work. - The only way to implement them is to provide the funding
from donations. For years I have more
or less successfully managed to explain
to potential donors how much this
project is important for the society as a
whole, but I was usually misunderstood.
Fortunately, people who implement the
program “Cooperation Driving Development” have recognized the vision shared
by the project owner, “Pedagogical
Information Society of Serbia”, and me,
and by providing the financial support in
2013 enabled the recording of video lessons in math and the start of recording
video lessons in physics for elementary
school students in 2014 - says Popović.
Projects that used to be funded by
donations in the past or which are still
ongoing can participate in the program
“Cooperation Driving Development”. The
requirement that must be met is that
they should be implemented in the territory of one of mentioned municipalities, and one organization can compete
with up to three ideas. Year in, year out,
the number of registered projects is
growing, as well as the total money to
be allocated, which means that NIS has
been recognized as a reliable partner in
implementing plans to improve life in
the local community.
53
54
CULTURE
CULTURE
Summer Festivals
The Prettier Side
of Serbia
Ekaterina Jakovljeva
Nisville Jazz Festival, Guča Trumpet
Festival and Bolshoi Russian Music
Festival have enriched the cultural and
musical scene in Serbia this summer.
Events such as these promote talented
people, attract tourists and improve the
image of Serbia
Serbia is widely famous for hospitality and cheerful disposition of its people. One of the best ways for visitors to experience this is in summer music festivals. They provide an
opportunity for Serbian people to show how much they enjoy
having fun and what excellent hosts they are to all visitors
to their country. NIS has traditionally been giving support to
summer festivals across Serbia by its corporate social responsibility programme Culture without Borders, thus providing
an opportunity for a large number of local and foreign visitors
to enjoy the rich cultural and artistic scene. Be it the sound of
trumpet, which traditionally accompanies all major events in
Serbia, sophisticated jazz rhythms or classical Russian tunes
- music fans have certainly been able to find a festival to their
liking this summer.
55
56
CULTURE
CULTURE
Nisville Strings Attached?
Owing to the Nisville Strings Attached? music competition organised by NIS in order to support young music talents, seven lesserknown Serbian bands had an opportunity to perform at Nisville
jazz festival. The total of 47 bands applied for the competition and
the winning bands, which performed at the Youth Stage, include:
FingerbanG, Jazus Jayy, Hipnagoga slike, Jazzmo Quartet, Oganj
Band, Tevarbulebra and Masterflow&Bandtronica. Representatives
of one of the winning bands in NIS competition - FingerbanG, a
quartet from Bečej, say the most important thing for them is the
fact that an expert jury made selection. – This is an indication that
our work matters, after all. It is an incredible honour to perform at
a festival like this one, with so many well-known performers. When
Serbia is concerned, we have only performed in Vojvodina so far –
say members of this quartet.
NIsvIlle Jazz
FestIval
In summer time, the town of Niš is
home to many jazz musicians from all
over the world. The Nisville international jazz festival, which NIS has been
supporting for six years in a row, is a
prestigious music event which gathers
well-known international musicians
and fans of this music genre. The festival was officially declared the cultural
event of national importance in 2009,
also winning the best local brand status.
Nisville director Ivan Blagojević says
that the famous Russian composer Igor
Stravinsky wrote that jazz is the classical music of the 20th century. - As part
of its Culture without Borders programme,
NIS has recognised the concept of
Nisville as promotion of art music and
has become the most reliable partner of
Nisville in the last six years. It is owing
to the continuous support that Nisville
was declared the art music brand in the
Best of Serbia campaign launched by the
Ministry of Trade and the Chamber of
Commerce and Industry of Serbia. NIS
has also won the Best of Serbia award
and has, being an energy giant itself,
instantly recognised the energy of
young people, one of the key features
of Nisville. It is via their joint support
that Nisville has gained the status of a
regional leader - Blagojević says.
On average, 100,000 people visit the
Nisville declared the
European Face of Serbia by
the New Europe magazine
event and enjoy jazz music. The festival celebrated its 20th
anniversary this year with 560 performers and 80 concerts in
three days. The most important jazz festival in the Balkans
gathered major international and domestic jazz bands and
artists, including one of the most famous rhythm and blues
bands in the world - The Original Blues Brothers Band (USA),
Iyeoka (USA), Candy Dulfer Band (The Netherlands), The
Cookers (USA), Tania Maria (Brazil), Vlatko Stefanovski and
Miroslav Tadić (Serbia, Macedonia), and Viva Vox (Serbia).
Apart from these outstanding figures, the festival featured
other, lesser-known jazz, blues and fusion bands from all
over the world.
Zoran Perišić, Mayor of Niš says that it is estimated by the
organiser that Nisville could be among the top ten global
festivals by 2015. - The town would certainly see that as a
challenge, hoping to attract larger crowds from other towns
and countries by well-designed programmes – Perišić says.
In addition to the main programme in the Earth and Sky
stages, Nisville introduced a number of free music programmes this year (Open, Youth, Welcome and Matinee
Stages), screenings of jazz and music films at the Movie
Stage, exhibitions, book and magazine promotions, as well as
the traditional Nisville workshop.
Famous jazz saxophone player Candy Dulfer says she
loves the festival since it connects different music styles
and populations. – Nisville connects the young and the
elderly, fans of jazz and modern dance music. I think that
is good and that is why I feel good and at home in Niš –
Ms. Dulfer adds.
The Jazz - Multicultural Expression project was held as part of
the Festival with the support of the European Union Delegation to the Republic of Serbia. Music academy students,
music school students and self-taught musicians from six
towns in the south of Serbia attended free music workshops
as part of the project.
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58
CULTURE
Guča Trumpet
FestIval
Dragačevo Festival is an annual event
celebrating trumpet players, folk music
and folklore which takes place in Guča
near Čačak. The trumpet is the symbol
of this village with several thousand
CULTURE
inhabitants. The first Dragačevo Festival
was held as far back as in 1961, with
four bands taking part. Nowadays, the
Festival gathers many trumpet bands
from all over the world and nearly a
million visitors flock to the village every
summer both from Serbia and abroad.
Guča has become famous in the entire
world as the venue for the greatest
global trumpet music festival incorporating other folklore activities, such
as art exhibitions, literary gatherings,
selection of the most beautiful national
costumes, folk all-around, etc.
This year's international trumpet band
competition, which lasted for seven
days, was won by the Macedonian
trumpet band Uska Kan, whose amazing
performance captured both the audience and the jury, proving that they can
compare to other bands with an undisputed reputation for this type of music
and performance. Ekrem Mamutović,
the winner of many festival awards and
59
BolshoI RussIan MusIc
FestIval
Bolshoi Festival, a classical music festival, was held in the
ethnic village of Mećavnik in Mokra gora in the western Serbia
in mid-July for the second consecutive year under the general
sponsorship of Gazprom Neft. This three-day event promotes
both the greatest stars of the Russian classical scene and
young talents.
one of the best trumpet players in Serbia nowadays, took the title of the best
trumpet player. Sokol Band from Poland
was ranked second and The Zuralia from
Romania came third. The winning titles
make it possible for trumpet players
to perform in metropolises around
the globe, domestic and international
festivals, music shows, on television
and in films.
Director Emir Kusturica says that cultural cooperation of the
Russian and the Serbian people is significant.
- I have dreamed for a long time now of seeing a piano and a
philharmonic orchestra performing great Russian authors in the
hill of Mećavnik, where there only used to be a lamppost and a
haystack and now there is a wooden town. One of my dreams
has come true and the lamppost and the haystack are in the
past now. The cooperation with Gazprom Neft confirms that two
brother nations have joined each other in the cultural scene.
More than 100 students of secondary music schools and
academies from Serbia and the Republic of Srpska compete
in performing classical Russian musical compositions in this
event and winners get matryoshka dolls, an award designed
to stimulate young talents and serve as a stepping stone to a
worldwide career.
Violinist Alena Baeva
A concert of one of the most famous pianists in the global
musical scene, Denis Matsuev, opened this year's festival. Matsuev performed the compositions of Pyotr Tchaikovsky, Sergei
Rachmaninoff and Igor Stravinsky for approximately 300 event
participants and guests, also performing jazz compositions as a
special surprise. Alena Baeva, Russian violin player, and Aleksandar Madžar, world-renowned pianist, performed on the second
and third day of the festival.
The Czech National Symphony Orchestra under the direction of
Jan Kučera has performed in the festival for the second consecutive year, both accompanying the musicians mentioned and
taking part in a concert performance of the Time of the Gypsies
opera together with Emir Kusturica's No Smoking Orchestra. This
orchestra created a special atmosphere by its solo performance,
which included playing famous tunes from feature films.
NIS CEO Kirill Kravchenko says the Company always supports
young talents, which is the essence of the festival. - It is not
widely known that the great Pushkin could speak Serbian and
that he translated Serbian epic poems into Russian, while one
of the greatest composers ever, Pyotr Tchaikovsky used Serbian
songs when creating the Serbo-Russian March. We have always
supported young talents, which is the essence of this festival. I
hope that talents such as Matsuev, Pushkin and Tchaikovsky will
be discovered in Mećavnik – Kravchenko says.
Pianist Denis Matsuev
Cultural events most often depend on the support of large companies and their existence is significant for several reasons. In
addition to stimulating music talents and enriching our country's culture, these summer festivals attract foreign visitors and
improve the image of the country on a global scale.
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Višegrad and Andrićgrad
HISTORY WRITTEN
IN STONE
Nenad Stanojevski
Child Bajica Sokolovic, an Orthodox
Serb, was abducted from his parents and
taken to Turkey to join the Janissaries,
the famous soldiers of the Turkish army.
As a powerful Turkish vizier, now a
Turk and a Muslim, at the end of his
life he returns to his hometown with
an overwhelming inner need to do
something important and leave a trace.
And he managed to do just that – he
built the famous bridge in Visegrad,
which has been a source of inspiration
for many artists, most of all to the only
Nobel Prize winner from this part of the
world, Ivo Andric, the author of the novel
"The Bridge on the Drina"
Bridges are not only the roads and means to cross a river.
They have always had a deeper symbolism and meaning.
They have represented the achievements of civilization,
cultural connections and have brought people and nations
closer, the architectural wonders of art, cultural monuments and traces of times past ... It is no wonder that when
wars break out and madness starts to reign, bridges are first
destroyed, and all enemy armies target and destroy them
first. A similar fate befell the bridge on the Drina in Visegrad, which, fortunately, survived all the plights, both those
brought on by time and by humans and, powerfully arched
over the waters, it continues to defy time and keep many
secrets of many people and many fates...
Visegrad was first mentioned in 1433 when it belonged to
the powerful Serbian patrician family of Pavlovics, who also
administered the medieval town of Dobrun. Remnants of
the old town or Pavlovina (named after Duke Pavle Radenkovic) lie at the top of the hill above the Drina bridge. The
ruins are located in two places and are called "Upper Town"
and "Lower Town". At the bottom of the old town, the rugged cliffs above the Drina house a tower which is popularly
known as the "Tower of Prince Marko", which acted as a
watchtower in yesteryears.
As the famous Turkish traveler Evliya Çelebi recorded in his
writings, around the year of 1577 Mehmed Pasha built the lower
Visegrad town, and since there was also a settlement above or
over him /Serbian: više – over/, the city was named Višegrad.
According to Turkish sources, Osman Pasha conquered the
town in the 16th century, and it remained under the Turkish rule until the Congress of Berlin in 1878 when AustriaHungary takes over the administration of the entire Bosnia.
With the arrival of Austro-Hungarians, Visegrad takes
shape of an urban environment. They build a water supply
system, introduced the land register, constructed a narrowgauge railroad and public buildings. After the First World
War, Visegrad became a part of the Kingdom of Yugoslavia,
within the borders of Bosnia and Herzegovina ...
Visegrad Bridge on the Drina is the endowment of the
Grand Vizier Mehmed-pasha Sokolović. He was one of
the great Ottoman military leaders of Bosnian origin. He
was born in the village of Sokolovići near Rudo in 1505 or
1506, as a child of Orthodox parents. At that time, there
was a tradition known as Divširma, or "blood tax". Serbian
children were forcibly abducted and taken to Turkey, where
they would be converted to Islam and trained in their
military schools to become the Janissaries, elite soldiers of
the Ottoman Empire. Bajica Sokolovic was also abducted as
a child from the environs of Visegrad and named Mehmed.
Thanks to his skills, he would later become an officer of the
Ottoman army, and at the peak of his powers he became
the grand vizier, or a prime minister of the state by today's
standards. At the height of his powers he ordered that a
bridge be built in Visegrad on the Drina River and that it be
unsurpassed by any other...
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62
FULL TANK
There are many ways to travel to
FULL TANK
FROM BELGRADE 247 KM
FROM BUDAPEST 574 KM
How long will it take you to get there
FROM ZAGREB 457 KM
FROM BUCHAREST 720 KM
depends on where you come from...
FROM SARAJEVO 112 KM
FROM SOFIA 489 KM
Visegrad and walk over the famous bridge.
The idea was made public in late 2010,
About
Andrićgrad
and in April 2011 Andrićgrad Ltd. was
formed as a company based on a public
- private partnership with the mission
of building and later managing the
complex. The construction began with a
Andrićgrad complex was built in Viseg-
formal ceremony held on 28 June 2012
rad after the vision of a famous film
with the sounds of the opera "Carmina
director Emir Kusturica, and is a kind
Bridge on the
Drina
The bridge was built in the period from
1571 to 1577, by then probably the most
famous Ottoman architect Kodja Mimar
Sinan. It was built in the oriental style
and is a masterpiece of that era. It has
11 arches with a slight rise towards the
middle and a descending ramp on the
left bank. Above the arches, over the
entire length of the bridge, a molded
crown spans with the bridge fence
above it. The total length is 179.5 m, the
height with the normal water level of
the river is 15.40 meters and the width
is 6.30 meters. The bridge was built of
stone, travertine or tufa, which was
brought from the Visegrad spa. Extensions are built above the sixth pillar on
both sides of the bridge. On the access
ramp on the left bank, there are three
openings finished with broken arches.
A sofa was built in the middle of the
bridge designed for passers to rest, and
a stone portal is built across the sofa.
The centre of the bridge once had a
house with a wooden gate and bridge
guard, which is why this part of the
bridge is called the Gate. Here are two
slabs of white marble with verses of
poet Nihadi in Arabic script, which tell
the tale of the builder and the year of
construction.
Older, upper inscription was written
in year 1571/1572:
"On the Drina in Bosnia he built a magnificent bridge and pitched a string of arches
on the river, on the water deep and loud. His
predecessors could not build anything like
that thus, on God’s order, the grand vizier
BUDAPEST
574 KMwith
did so, soFROM
that his
name is mentioned
respect and
gratitude,
and he built
a bridge
FROM
BUCHAREST
720
KM
that has no equal in the world ... "
FROM SOFIA 489 KM
A record from 1577 reads the
following:
"His excellency, benefactor Mehmed Pasha,
who loyally served three rulers as the grand
vizier, constructed the highest wonderful
endowment, may good Lord count that in
his good deeds. In pure intentions, with his
graceful sight, he built the large bridge over
the Drina River. Its design is so beautiful,
that one who sees it thinks it is a pearl in
the water, and the heavenly sky is its shell! "
Phoenix
In its centuries of existence the bridge
has suffered many misfortunes. The
first recorded damage of the bridge
was the destruction of one arch in the
Middle Ages. The bridge underwent a
repair in 1873, and in 1896 a large flood
destroyed much of Visegrad, but the
bridge remained almost intact, although
the Drina reached record 14.6 m depth.
Only the stone railing of the bridge was
damaged.
In 1914, two pillars were destroyed and
arches that rest on them, and in 1943
four pillars with the surrounding arches
were mined and blasted. In the period
between the two world wars, the bridge
was temporarily able to take traffic
with the help of a metal construction.
Detailed reconstruction of the bridge
was carried out in the period from 1949
to 1952.
The bridge is one of the most important
national monument of Bosnia and Herzegovina, and in July 2007 it was entered
in the UNESCO World Heritage List.
Burana," performed by the Belgrade
of historical reconstruction of the stone
Philharmonic Orchestra.
town with elements of different architectural eras and styles. It is a blend of
Ottoman architecture, Byzantine period
The legend of Stana
and Ostoja
with elements of the Moravian school,
Renaissance and neoclassicism.
Andrićgrad is a multi-functional space
with tourist, cultural, educational, administrative and commercial buildings.
Andrićgrad scientific institution - Institute of Ivo Andric should be noted in
particular, but also the Academy of Fine
Arts, the Renaissance theater with 300
seats, a multiplex cinema with three
cinema theatres and the new municipal
administration building.
sance and other historical periods. In
architectural terms, the city is a blend
It was born from the idea of a stone
medieval city, inspired by works and
characters of Nobel prize laureate
Ivo Andric. It is, in fact, that vision of
Višegrad as it might have been had
it not been bypassed by the Renais-
“
Andrićgrad has
originated from the idea
of a medieval stone town
inspired by the works and
characters of the Nobel Prize
winner Ivo Andrić.
”
of different eras and styles that have
taken turns through the history of this
area: the Byzantine style, the Ottoman
period, the Renaissance classicism.
When walking through the main street
promenade, visitors will be able to
return to the past.
"It practically merges two periods - the
Renaissance fragments with the Ottoman period and the Byzantine Empire.
At the entrance to the caravan serai,
one encounters the Byzantine palace,
and further one one sees what Austria
could have built, but did not, just as
the Ottoman Empire did not built
what it was supposed to build. Finally,
towards the main square, which is a
kind of classicism, which was supposed
to occur during the kingdom between
the two world wars, a street will be
Emir Kusturica,
director
built with elements of the Renaissance,
which could have been made by Austria", said Emir Kusturica.
The Bridge on the Drina was sponsored by Grand Vizier Mehmed Pasha
Sokolovic, and built by Rade Neimar,
who must have lived for hundreds
of years to be able to build all that is
beautiful and durable. However, the
construction of the bridge was disrupted by the ship fairy. At night the
Fairy destroyed what was built in the
day. Then "something" spoke out of
the water and advised Rade Neimar
that, if he wanted to build a bridge,
he ought to find two children, twins,
brother and sister, Stana and Ostoja,
and pour them in the concrete in the
cetral piers of the bridge. He immediately began searching for such children and promised a reward to those
who find and bring them to him.
Vizier authorities found the twins in a
remote village and took them from their
mother by force. In an attempt not to
be separated from her children, she ran
after them stumbling and crying, insensitive to their curses and blows.
So Rade Neimar built the children into
the piers. In his repent, he left openings in the pillars through which the
bereaved mother could breastfeed
her sacrificed children. In memory of
this sacrifice, for hundreds of years
the mother's milk runs from the walls
leaving an indelible mark on the rock.
Short text of the legend from the
novel "The Bridge on the Drina"
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64
COVER STORY
COVER STORY
The Company has invested
more than a billion RSD in social
responsibility. NIS supports all
projects transparently, most
importantly with the participation
of citizens in choosing the
projects that best contribute to
Serbia’s development
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COVER STORY