Energize 3.pdf

35
ISSUE Y Development Strategy for Serbian Bunker Stations DEFINING LEADERSHIP Environment Waste the Waste Energy Efficiency and Green Energy Business By World Standards 3 APRIL MAY JUNE NIS INTERNATIONAL CORPORATE MAGAZINE INTERVIEW TANJA MIŠČEVIĆ SERBIA'S CHIEF EU NEGOTIATOR

Transcript of Energize 3.pdf

Page 1: Energize 3.pdf

Refining 1ISSUE Y

DevelopmentStrategy for

Serbian Bunker Stations

DEFININGLEADERSHIP

EnvironmentWaste the Waste

Energy Efficiency and Green EnergyBusiness By World Standards

3APRIL

MAY

JUNE

NIS INTERNATIONAL CORPORATE MAGAZINE

3

INTERVIEW

TANJA MIŠČEVIĆSERBIA'S CHIEF EU

NEGOTIATOR

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Refining2 Refining 1

Page 3: Energize 3.pdf

Refining2 Refining 3

EnergizeThe international magazine of NIS.Issue 3, July 2014 Published by:NIS, Novi Sad, SerbiaPublic relations and [email protected] +381 11 260 66 95

ISSUE

3Y: 2014

APRIL

MAY

JUNE

REGIONALMAGAZINE

ISSUE Y

DevelopmentStrategy for

Serbian Bunker Stations

DEFININGLEADERSHIP

EnvironmentWaste the Waste

Energy Efficiency and Green EnergyBusiness By World Standards

3APRIL

MAY

JUNE

NIS INTERNATIONAL CORPORATE MAGAZINE

3

INTERVIEW

TANJA MIŠČEVIĆSERBIA'S CHIEF EU

NEGOTIATOR

Art direction and design byMetaklinika

Illustrator:Aleksa Jovanović

Photographers:Mladen Janković, Dušan Đorđević

Print:„Stojkov” Energize Magazine is published quarterly. Copyright © 2014 NISwww.nis.eu

This magazine is printedon paper from responsiblymanaged forestsThe mark of responsible forestry

CONTENTS

COVER STORY

NEWS AND TRENDS

Business by World Standards

Plovdiv — An Open Air Museum

4-9

10-18

60-63

24Tanja Miščević

10Businessby WorldStandards

32DefiningLeadership

50Novak Đoković

56Balkan Trafik

fULL TANk

First Chance46-49

HR

DOSSIEREnergy connecting the Region

20-23

Balkan trafik 56-59

CULTURE

Energy of Success / Novak Đoković50-55

TRENDSETTER

Defining Leadership32-37

INDUSTRY & BUSINESS

Energetic opening for business38-41

REGION

INTERVIEWTanja Miščević

24-27

MINI-VIEWBorko Raičević

19

Waste the Waste42-45

ENVIRONMENT

New Profitable Busines28-31

INDUSTRY & BUSINESS

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NEWS AND trENDS4 NEWS AND trENDS 5

New partner ın Super Card programmeCompanies NIS, IDEA, Sberbank Serbia and Telenor, who are partners in the intercompany loyalty program called “Super Card”, signed the Memorandum of Cooperation with a new partner, the company DDOR Novi Sad on 12th May.

Kirill Kravchenko, the CEO of NIS, Alek-sandar Seratlić, the Chief Executive of IDEA, Dr Kristian Otto Noi, Chief Execu-tive Officer of DDOR and Valery Ovsyan-nikov, the Chairman of Executive Board of Directors of Sberbank, have put signa-tures to the Protocol on Cooperation to officially endorse the new partnership.

The cooperation of these five compa-nies will make possible for customers in Serbia and very soon customers in the region, as they purchase at these partners, to collect saving points granting benefits provided by the unique Super Card reward programme. DDOR Novi Sad Company, as the new partner in this loy-

NIS facılıtates oıl products qualıty boostAs a major regional oil company NIS attended the „South East Europe Oil Products Retail Market“, an international conference under the auspices of Ser-bia’s National Oil Committee.

The conference panel discussions included representatives of the region’s oil majors: OMV, AVIA, Hellenic Petro-

alty programme, rewards its customers with special offers on car insurance as well as property, life and travel insurance and gives Super Card points for every purchase or insurance policies renewal. All Super Card users who, within a single three-month long accounting period, earn a minimum of 60 points become entitled to a reward booklet with special discounts, wherein value in points varies depending on the type of insurance.

McDonald’s has also joined the loy-alty program. In a certain period of time, through the Super Card discount booklet, this company will give out promotional coupons, which the Super Card owners may use in all McDonald’s restaurants throughout Serbia.

Super Card, the most comprehensive loyalty program in Serbia’s market, is successfully expanding the network of satisfied customers and has become a part of everyday life for many families in less than a year. This is further supported by the fact that more than 25 million purchases have so far been made using Super Card in IDEA retail stores and NIS Petrol filling stations across Serbia.

NIS – Serbıa’s Top Treasury ContrıbutorSerbia’s daily Blic made public a list of 200 last year’s largest state coffers’ contribu-tors. NIS tops this list as Serbia’s only busi-ness entity that gave more than RSD 100 billion to the public purse.

Last year, NIS paid RSD 120.6 billion, 30% more than in 2012. NIS’ tax contributions accounted for approximately 14% of Ser-bia’s budget revenue.

Philip Morris, Telekom Srbija, British Amer-ican Tobacco Vranje and Japan Tobacco International are on the Blic list, with disbursements ranging from RSD 10 to 50 billion. They are followed by the busi-nesses contributing between three and five billion dinars, among them Apatinska Brewery, Telenor, Monus, Delhaize Serbia, Carlsberg Serbia and two banks: Intesa and Komercijalna banka. The companies, whose last year’s assignments to the state treasury were between one and three billion dinars include Fiat, Coca Cola, Raif-feisen Bank, UniCredit Bank and Societe Generale Bank.

The Blic reports that 80% of the 200 biggest contributors are the companies, whose controlling stake is owned by for-eign companies. Trailing behind them are state-run enterprises along with few local businessmen, who made installments in taxes and dues towards last year’s budget.

leum and Petrol. NIS Retail Director Nadezhda Korobeinikova used the venue to stress the importance of Serbia for the company as its key market.

In parallel, the company has been spreading its operations in Romania, Bulgaria and Bosnia-Herzegovina, which is facilitated by logistics advantages and the revamped refinery in the town of Pančevo.

Ms Korobeinikova was cautiously opti-mistic in her assessment of oil products

market, as it is affected by economic crisis, shrinking payment capacity of the populace and a slump in industrial activity.

- Serbia is a demanding market qual-ity-wise. We sell Euro 5 quality fuel, however, there has been a constant requirement to improve the quality of service and additional services. We are poised to make revenue and profit from non-fuel products as well– Ms Ko-robeinikova said.

- Serbia is a demanding market quality-wise.We sell

Euro 5 quality fuelhowever, there has been a constant requirement to improve the quality of service and additional services. We are poised to make revenue and profit from non-fuel products as well–

Ms korobeinikova said.

5

Debatıng waste treatment ın SerbıaNIS participated in the sixth public debate on waste treatment organised by the Central European Development Forum and Serbia’s Chamber of Com-merce. The event was held in support of the „Sustainable Energy Week“, which is marked across Europe with events promoting innovation in power genera-tion and environment protection.

The topic dominated Serbian National Assembly discussions attended by the representatives from the Ministry of Agriculture and Environment Protec-tion, Provincial Secretariat for Envi-ronment, Environmental Agency and corporate executives. A Memorandum was signed on cooperation between the Environmental Agency and CEDEF, which outlines industry recommenda-tions on the categorisation of waste in the current legislation and the one to be adopted following Serbia’s EU accession.

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NEWS AND trENDS6 NEWS AND trENDS 7

Sports agaınst vıolenceNIS, TAS (Tennis Association of Serbia) and the Ministry of Edu-cation, Science and Technological Development entitled have jointly launched the Sports against Violence campaign.

Over the course of the next school year, more than 300 Serbia’s primary school pupils will benefit from this campaign featuring The Mini Tennis Training Programme sponsored by the Interna-tional Tennis Federation (ITF) – MINI TENNIS promotes sports values, non-violence culture and fair play in sports.

Pupils from 14 elementary schools in Belgrade were introduced to mini court tennis and socialised along the way with Serbia’s top tennis player Jelena Janković.

In its capacity as the general sponsor of TAS NIS has long supported it within its “Power of Sports” programme and its corporate responsibility strategy. Thus, in a pooled effort with the Tennis Association of Serbia the Company promotes healthy lifestyle and supports young talents.

Supporting local communityby funding best projects

By the end of this year, NIS will have supported 164 projects aimed to facilitate economic and social welfare of cities and municipalities throughout Serbia. The projects have been se-lected in the open competition system as part of the corpo-rate support programme for local communities implemented under the slogan “Common Cause – Community”.

According to established criteria, the jury made up of NIS representatives and the cities and municipalities has selected the best projects out of the total of 1,173 project applications. In the selection process, the jury made sure that an equal amount of support is provided for projects in five different

NIS legal achıevements rewardedThis year’s Kapetan Miša Anastasijević Award went to Sergei Fominykh, NIS Legal and Corporate Affairs Director, for the Company’s exquisite achievements in legislation. Sergei Fominykh was awarded as NIS distinguished executive and expert, who has greatly contributed to the Company’s business results.

This is the fourteenth year that the Ka-petan Miša Anastasijević Award has been

granted within the “Aiming to the Top” project, which promotes social creativ-ity and entrepreneurship in Serbia. Nominations are sent in by the Serbian Chamber of Commerce, local govern-ments, associations of journalists and non-governmental organisations. The jury made up of university professors, evaluated professionalism, market posi-tion, social responsibility, and nominees’ moral and ethical values. The award in the recent years went to Serbia’s most prominent economic, cultural and political figures. The official awarding ceremony at the Belgrade University Chancellor’s Office was attended by numerous notable figures.

More than

300

Serbia’s primary school pupils will benefitfrom this campaign

Serbıa’s role ın the Balkans Energy MarketThe Chamber of Commerce of Serbia hosted an energy forum entitled The Role of Serbia in the Energy Market of the Balkans. The forum gathered numerous experts with a view to defining a common approach to energy policy in Southeast Europe and ensuring pan-regional collaboration among the countries inter-ested in improving the market of energy-generating products. NIS was one of the participants of this year’s forum. Ana Maćić, Head of the Strategic Development Section at NIS spoke about the investments of NIS and future strategic objectives of its business development in Serbia and the region. “NIS intends to grow into a regional energy company, which is the reason why it has been extending its operations in the region to the retail market of Bul-garia, Romania and Bosnia and Herzegovina, as well as to the area of exploration in Romania, Hungary and Bosnia and Herzegovina,” Ms Maćić said.

This year, NIS has earmarked

110 500 000 dinars for projects to be implemented by citizen

associations, and sports and professional associations

areas: sports, culture, science, environment protection, and assistance to socially vulnerable groups. Other than that, in selecting the projects the importance of resolving problems for the local community was assessed, as well as the level of inclusion of the local community in all the project stages, the justification of the budget with respect to the proposed activ-ities, the relevance of the problems that the project focuses on with respect to the needs of the local community, and the alignment between the set goals, the proposed activities, and the expected results.

This year, NIS has earmarked 110.5 million dinars for projects to be implemented by citizen associations, and sports and professional associations based in the 11 municipalities with which the company has a collaboration agreement: Belgrade, Novi Sad, Niš, Pančevo, Zrenjanin, Kikinda, Novi Bečej, Žitište, Kanjiža, Srbobran, and Čačak.

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NEWS AND trENDS8 NEWS AND trENDS 98 9

NIS na Sajmu automobila u BeograduNIS je tradicionalno nastupio na beo-gradskom Sajmu automobila „Belgrade Car show 2014 “gde je ljubiteljima auto-mobilizma ponudio bogat i raznovrstan program u okviru svog štanda. Sa pose-tiocima sajma najpre se družio najbolji srpski automobilista Dušan Borković. U okviru svog nastupa na Sajmu, NIS je predstavio i rezultate poslovanja u 2013. godini jednog od svojih biznis pravaca koji se bave mazivima. Preostali dani na sajmu za naše goste bili su rezervisani za druženje sa košarkašima Partizan NIS i fudbalerima Crvene Zvezde, dok su poslednjeg dana sajma, na NIS-vom štandu, predstavnici medija dobili priliku da isprobaju jela pripremljena kuvarima Gazprom benzinskih stanica.

Objavljen

„Gasprom njefta“ Rast proizvodnje ugljovodonika i značajno povećanje obima prodaje u premijum kanalima prometa (sitna veleprodaja i sopstvena mreža benz-inskih stanica, prodaja mlaznog goriva i bunkerisanje) obezbedili su povećanje pokazatelja korigovane EBITDA za 4,2 odsto. Čist prihod iznosi 177,92 milijarde rubalja, što za 0,9 odsto premašuje isti

Nagrada za korporativnu

NIS je dobitnik prestižne VIRTUS nagrade

nagradu za doprinos na nacionalnom nivou, generalnom direktoru NIS-a Kirilu Kravčenku uručio je Majkl Devenport, ambasador delegacije Evropske unije u Srbiji.

-Izuzetno nam je drago što smo dobit-nici „Virtus“ nagrade. Poslednjih godina NIS je napredovao u ekonomskom smeru i povećao učešće u budžetu Srbije sa sedam na više od 14 odsto, ukoliko u

obzir uzmemo i plaćanje dividendi. Za nas je veoma važno i da svake godine ulažemo više u socijalne projekte. Tako smo u poslednjih pet godina uložili više od pet milijardi dinara u različite programe – saradnju sa univerzitetom, lokalnim zajednicama, sport i kulturu. Ova nagrada će sigurno uticati da još odlučnije nastavimo istim putem - istakao je tom prilikom Kiril Kravčenko, generalni direktor NIS-a.

Tradicionalne godišnje VIRTUS nagrade dodeljene su sedmi put kao priznanje kompanijama koje su tokom 2013. godine najviše doprinele opštem dobru pružajući materijalnu ili drugu vrstu

-zacijama civilnog društva.

Proizvodnja u 2013. godini dostigla je 457,42 mln. barela naftnog ekvivalenta (62,2 miliona tona n.e.), i povećala se za 4,2 odsto u poređenju s rezultatima iz 2012. godine. Najveći uticaj na ovaj poka-zatelj imali su faktori rastuće proizvodnje u Orenburškom regionu i na Priobskom nalazištu, zatim proizvodnja gasa na Muravljenkovskom nalazištu, početak rada Samburgskog nalazišta „Sever Energije“, rast obima iskorišćenosti kaptažnog naftnog gasa, kao i uspešna primena visokotehnoloških operacija na postojećim nalazištima Kompanije.Ukupni obim prerade nafte u prošloj god-

112

110

108

106

104

1.400

1.352

1.300

1.250

APRIL MAJ JUN APRIL MAJ JUN

Dynamics of Brent and Urals Crude Oil Pricies

Brent Crude (USD/BBL) Urals Crude (USD/BBL)

Dollar-Euro Dynamics

Q2 of 2014

Italıan Ambassador vısıts refınery ın Novı SadDuring his visit to the SSV Italian Con-sortium, which has been engaged by the Novi Sad Refinery, Italy’s Ambassa-dor to Serbia, Giuseppe Monco, visited the site where the Project of the Tank and Technological System Reconstruc-

tion for Petroleum Transportation has been under way.

As part of modernization of the NIS refinery facilities in Novi Sad, the Italian Ambas-sador was given an up-date on the Proj-ect package, including the construction of primary facilities for the production of base oils which will also, as in the case of this Italian Consortium, engage numerous other local as well as foreign contractors.

NIS Solar LED treeNIS launched a Solar LED tree at a ceremony held in the Beszédes József College in the Serbian town of Kanjiža. The company support-ed this environmental project within its socially responsible business programme for 2013.

A mini solar park represents a unique architectural design with solar panels have been arranged in the form of a big tree. This solar LED tree is powered by the Sun as a renewable energy source for light and electricity consumption within the college production units.

Aleksei Belov, NIS Energy Director, took this occasion as an opportunity to reiterate NIS commitment to facilitate local communities’ development through the “Cooperation for Development” project. The solar LED tree is one out of 12 such projects backed by NIS last year. This year within a public competi-tion programme the company is to fund another 23 projects in Kanjiža.

Gazprom launches regıonal consumer web sıte A regional GAZPROM retail network web site has been launched intended for con-sumers in Serbia, Bosnia-Herzegovina, Romania and Bulgaria. It is available in the local languages and English.

The web site is so concieved to cater to all categories of consumers in Serbia, Bosnia-Herzegovina, Romania and Bulgaria. It gives easy access to details on quality of products and services in GAZPROM petrol stations. Other than that, a new online service started – petrol stations locator. The web site contains information on cur-rent special offers and promotions for local consumers and transit clients.

The portal has been devised to inform buyers of the product quality as the Company offers a wide range of premium fuel and other products that meet the needs of most demanding clients.

Gazprom Neft starts crude oıl extractıon ın IraqIn late May Gazprom Neft started extracting crude from Badra oilfield in Iraq. Complex surveys have been under way at the oilfield slated to be com-plete within three months to start the commercial extraction. Once all that accomplished Badra would be poised to reach the project extraction level of 15 thousand barrels daily.

- Development of Badra is one of the first Gazprom Neft’s international assets in terms of crude oil extraction. We have realised this project from the initial stage and shortly managed to carry out the complete range of works required for Badra’s industrial development.

Waste watertreatmentA unique synergy of modern technolo-gies in the new complex ensures the removal from the water up to 99 per cent of contaminants, 90 per-cent reduction of discharge into air during cleaning, as well as a two-fold reduction of water consumption in the Gazprom Neft Refinery in Russian town of Omsk.

- The construction of state-of-the-art closed-circuit treatment facility is one of the major environmental projects within the Omsk overhaul programme by 2020. The new complex will be put on stream in the shortest period – by the end of 2017. Simultaneously with its constructione, a multi-stage soil recultivation will be carried out on the compound of the old treatment plants – said Omsk Refinery CEO Oleg Belyavsky.

The experience gained by Gazprom Neft as operator is to improve our compe-tencies required to deliver new projects in the Middle East and in other regions, where the company has been looking into possibilities of further develop-ment, - says first deputy CEO Gazprom Neft Vadim Yakovlev.

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COVER STORY10 COVER STORY 11

Business By World standards

Energy Efficiency and Green Energy

Ana Krajnc

In terms of energy efficiency, Serbia is at the very bottom of Europe. It spends from three to five times more electricity per domestic product unit than EU countries, and two to

three times more than the neighbouring countries.

NIS is implementing the programme of increasing energy efficiency which includes the application of the best world practices in the area of electric energy cost optimization

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COVER STORY12 COVER STORY 13

installations, and we waste approxi-mately half a billion euros per year because we do not address energy ef-ficiency - believes Jovanka Arsić Karišić, Chairwoman of the organisation's Steering Committee.

NECESSARY NEW TECHNOLOGIESBased on statistical information avail-able, it is not possible to determine the accurate, final energy consumption per industry sectors in Serbia, nor can energy indicators be clearly defined. The reason for this situation is that the energy management system, which has been envisaged by the Law on Efficient Energy Use, has not been established yet.

Anđelka Mihajlov, Environmental Expert, says that energy intensity (the ratio of energy consumption and the level of GDP - an indicator of the effi-ciency of the economy) in the industry of the Republic of Serbia in 1990 was four times higher than in Western European countries, whereas in 2002, it increased by 25 per cent. - Specific energy consumption in the industrial sector grew during the 1990s, while the share of industry in the final

According to the latest information of the International Energy Agency, the energy efficiency measures imple-mented by 11 member states of the organisation in the period from 2005 to 2010 saved energy in the amount of USD 420 billion oil equivalent.

The Agency's report published in autumn 2013 envisaged that the global need for energy by 2035 would increase by a third in comparison to present consumption and that the share of fossil fuels would decrease from 82 per cent, which was their share in total energy consumption in 2010, to 76 per cent in 2035.

While the average annual energy demand rate is estimated at 2.3 per cent in the region of Southeast Europe, which is twice as much as in the previ-ous decade, Serbia has been at the very bottom of Europe in terms of energy efficiency for some time now. Accord-ing to the information of CEDEF (Cen-tral European Development Forum), three to five times more electricity per domestic product unit is consumed than in EU countries, and two to three times more than in the neighbouring countries. - Between 50 and 60 per cent of the energy we consume in Serbia is wasted due to poor insulation and

consumption decreased on account of poor use of available production capacities, outdated equipment and inadequate equipment maintenance. There has been a slight fluctuating growth of energy consumption in the industry sector in the last few years - Ms Mihajlov says.

Ms Arsić Karišić feels that in order to achieve efficient use of renew-able energy sources (RES) and energy efficiency, it is necessary to keep up-to-date with and introduce new tools, replacing the outdated technologies with the clean ones. This would ensure a practical approach to energy manage-ment, application of alternative energy programmes, efficient tariff monitoring and energy quality management. - In Serbia, this area is still entirely reserved for the private sector. Previous investments in RES have been made in more than 200 privately owned facilities although this area is considered to be the most lucrative sector in any state.

On the global level, the need for renewable energy sources has been constantly growing during the last decade. According to the latest avail-able information of REN21, the share of renewable energy sources reached 19 per cent in 2011, half of which was generated from bio-mass.

In 2012, energy from renewable sources covered 14.1 per cent of gross final consumption in 28 member states of the European Union, compared to 8.3 per cent in 2004, according to the information published by Eurostat in March this year.

The objective for 28 EU member states is to satisfy the needs of 20 per cent gross final energy consumption out of renew-able energy by 2020. Bulgaria, Estonia and Sweden have already reached the respective objectives set. To be more

Total World Energy Consumption by Source

Between

50 i 60 %of the energy in Serbia is wasted due to poor insulation and installations

and approximately half a billion euros is wasted per year since not sufficient attention is paid to energy efficiency

fossil 78.2 % | Nuclear 2.8 % | Renewable 19 %

Biomass 9.3 % | Bio-heat 3.78 % | Bio-power generation 0.35 % | Wind power 0.56 % | Solar PV 0.08 % Solar CSP 0.004% | Ocean power 0.001 % | Geothermal electricity 0.07% | Hydropower 3.73 % Solar hotwater 0.22 % | Geothermal heat 0.14 % | Ethanol 0.55 % | Biodiesel 0.23 %

precise, Bulgaria has reached the set objective of 16 per cent, Estonia has reached 25 per cent, and Sweden is using more than 50 per cent energy from renewable sources. With regard to their commitments, the Western Balkans countries have agreed within the Energy Community to reduce the use of energy by nine per cent by 2018.

Representatives of the Section for Renewable Energy Sources in the Ministry of Mining and Energy say that by 2020 Serbia must reach 27 per cent share of renewable energy sources in gross final consumption, with the share of energy from renewable sources in the transport sector of 10 per cent. Ac-cording to the official statistics, the share of renewable en-ergy sources in gross final consumption in 2013 was 19.3 per cent, which means that we replaced approximately 10 mega-tons oil equivalent with renewable sources. With regard to the structure of electricity generated from RES, energy from hydroelectric power plants is dominant, whereas bio-mass is dominant in generation of thermal energy.

As they emphasise in the Ministry of Energy, the privileged producer status may be granted not only in the area of en-ergy generation from renewable energy sources, but also to producers of electric and thermal energy in highly efficient and co-generation plants, amounting to approximately 9 MW installed capacity connected to the power grid in Serbia.

Renewable Sources:

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COVER STORY14 COVER STORY 15

PROOf Of EffICIENCYIn the last three years, NIS has been implementing the Energy Efficiency Improvement programme, which is a part of a major project involving the increase of total performance efficiency in all organisational units.

The programme objective is to introduce the practice of saving and rational use of energy in the entire Company and to imple-ment new technologies in order to reduce energy consumption.

The fact that our Company has recently been issued a certifi-cate verifying the application of (En MS) EN ISO 50001 inter-national standard in the energy management system in the operation of the Company's organisational units proves how much has been accomplished in terms of energy efficiency so far. Obtaining of the certificate represents a stage in the imple-mentation of NIS energy policy. The certificate has been issued by the Bureau Veritas certification body.

Standard EN ISO 50001 helps the Company put in place effec-tive process management, increase energy efficiency and use energy more rationally, which results in considerable reduction of operating costs without an adverse impact on productivity and quality of delivered products/services as well as in reducti-on of an adverse impact on the environment.

This certification proves that NIS has introduced an energy management system which, by applying the best international practice, ensures increased efficiency of the Company's busi-ness operations and reduction in the consumption of ener-gy-generating products and in the costs of their procurement, at the same time.

NIS is implementing the programme of increasing energy efficiency which includes the application of the best world prac-tices in the area of electric energy cost optimization.

Ilya Kutyaev, Director of the Department for Development of Energy, says that the Energy Efficiency Improvement program-me in NIS involves the use of best global practice in the area of electric energy cost optimisation. “The main consumers of energy-generating products in NIS are its refineries, which is why the facilities of the Refining will be the main place to increase energy efficiency. In addition, the implementation of the Construction of Condensate Return System in Novi Sad Oil Refinery project will start this year and it has also been planned to replace a certain number of compressors and pumps. Owing

to a series of activities aimed at increasing energy efficiency, a considerable decrease in the Solomon Energy Intensity indica-tor is planned,” Kutyaev explains.

COGENERATIONNIS and Gazprom Energoholding are planning to implement a joint project involving construction of a steam-gas power plant with the electric capacity of 208 MW in Pančevo. Ac-cording to Alexander Varnavskiy, Deputy Director of Energy for Implementation of NIS Investment Projects, the power plant is to provide reliable supply of thermal energy to the Refinery at an acceptable cost and with minimal adverse impact on the environment.

– Construction of the power plant increases reliability in the supply of thermal energy to the Refinery, which is essential. Furthermore, NIS will be able to put considerable quanti-ties of electric energy onto the market and make additional profit - Varnavskiy says.

He adds that by means of this project NIS is becoming a true energy company with the intent and plans to significantly increase its share in the electric energy market by construc-ting new power plants.

- We are planning to construct a small co-generation power plant with a gas turbine and nominal electrical capacity up to 10 MW in Novi Sad Oil Refinery. The project objective is

to increase reliability and efficiency in thermal energy supply to the current consumers on site, as well as the fac-tory of base oils planned to be constru-cted - Varnavskiy says. The power plant is going to sell all generated electricity to the public electric grid at the sti-mulating price which the Government approved for highly efficient generation of electricity, i.e. for the power plants with the average annual co-generation usefulness rate of minimum 85 per cent.

- If we achieve the annual co-generati-on usefulness rate of minimum 85 per cent, then we will sell the electricity generated at the stimulating price the Government has introduced for highly efficient generation of thermal and electric energy - Varnavskiy says, underscoring that the requirement set

in terms of the annual co-generation usefulness rate in Serbia is too high and borderline for the technology used by the Company.

-If this requirement were to be lowered to a rational amount, there would be greater use of the gas otherwise discharged, which means that a natural state resource is not used - Varnavskiy believes.

In 2013, NIS also put into operation four co-generation modules. One of them is in the territory of the gathering and dispatch station NIS Sirakovo (the municipality of Veliko Gradište), one of them is in the Company's oil reservoir “Kikinda gornje” (the municipality of Kikinda) and two of them are in the “Velebit” reservoir (the municipality of Kanjiža. The total projected electri-

The programme of increasing energy

efficiency at NIS includes the application of the best world practices in the area

of electric energy cost optimization

Source: Ministry of Mining and Energy of the Republic of Serbia

Albania

Bosnia and Herzegovina

Croatia

fYR of Macedonia

Moldova

Montenegro

Serbia

Ukraine

kosovo*

0,0%

38%

40%

5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0% 40,0%

20%

28%

17%

33%

27%

25%

11%

31,3%

34,0%

12,6%

21,9%

11,9%

26,3%

21,2%

18,9%

5,5%

Information from the region on the share of energy generated from RES in total final consumption

the percentage of share in the base year 2009 the difference required to reach by 2020 with the ultimate objective for the year

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COVER STORY16 COVER STORY 17

city-generating capacity of the four co-generation modules is 3885 kW and the annual volume of total electricity gene-ration is 28.92 million KWh. The investment in the const-ruction of four modules amounts to EUR 4.61 million. It is planned to put into operation two additional co-generation modules in Boka and Srbobran in Vojvodina within a short period of time.

In the next three years, NIS is planning to construct six other small power plants with the total electricity installed capacity of 27 MW, the total value of these projects being approximately EUR 33.75 million.

The Serbian legislation supports the development of alternative energetics,

but it is required to adopt bylaws so the law could be enforced

PLANDIŠTE WIND fARM NIS has also made a decision to launch the project of Plan-dište wind farm, which envisages the installation of 34 tur-bines with the total capacity of 102 MW. The annual gene-ration of electricity will reach approximately 262 GW/h and the total investment in the project will amount to approxi-mately EUR 160 million. “At the moment, contractors and consultants have already been selected, negotiations with banks on designated project funding are continuing, but have been slightly complicated by the fact that the existing standard contract on the purchase of electricity (RRA) does not meet bank requirements,” Kutyaev explains.

According to Kutyaev, the decision to construct the wind farm was influenced by the possibility of achieving synergy with the primary activity of NIS, owing to quota compensation for CO2 emission. Furthermore, the deci-sion was influenced by the current system of support to electricity generation from renewable energy sources in Serbia, which makes similar projects attractive to inves-tors in economic terms.

Kutyaev adds that the Serbian legislation supports the development of alternative energetics, but it is required to adopt bylaws so the law could be enforced; this includes the RRA model, which will ensure that such projects are funded by banks. -The main problem in implementing this project is non-compliance of the above mentioned document with bank requirements. In the meantime, the Government of Serbia continues to actively engage in resolving the prob-lems which have occurred. These projects are something new for Serbia and it is therefore natural that certain prob-lems arise, but we and the Government are doing everything in our power to implement them- Kutyaev states.

Feed-in tariffs are at the same level as in other countries, which, according to Kutyaev, makes Serbia competitive. Naturally, it is in investors' interest to attain the maximum price, but the applicable tariff system is well-balanced, he concludes.

RESPOND TO CHALLENGESAntonela Solujić, Head of Section for Energy Efficiency Improvement in the Ministry of Mining and Energy of the Republic of Serbia, says that the activities on harmonisation of the domestic legislation pertaining to energy efficiency have so far been the result of obligations under the Energy Community Treaty and in the following period, the require-ment to implement the new Energy Efficiency Directive of the European Union can certainly be expected. Inter alia, this directive is to ensure achievement of the main objective in terms of energy efficiency, which involves its increase by 20 per cent by 2020.

In 2010, Serbia adopted the first National Action Plan on Energy Efficiency for the period from 2010 to 2012, which specified the medium indicative objective for the period in the amount of 1.5 per cent of the final domestic energy con-sumption in 2008 and the total objective of minimum nine per cent of the final energy consumption in the ninth year of application. As they say in the competent Ministry, it was planned to save 1.5 per cent in the final energy consumption and the saving of 1.22 per cent was made, making the plan implementation 81.5 per cent.

In October 2013, the Government adopted the second Action Plan on Energy Efficiency in the Republic of Serbia for the

“ The construction of steam and gas power plant increases reliability in the

supply of thermal energy to the Refinery, which is essential. Furthermore, NIS will

be able to put considerable quantities of electric energy onto the market and

make additional profit ”

period from 2013 to 2015, which envisages final energy savings compared to 2008 in the amount of 3.5 per cent. - The accomplishment of set objectives requires mobili-sation of significant funds, as well as accreditation of a certain number of laboratories which will be able to identify whether requirements pertaining to a product's energy effi-ciency have been met. The obligation to apply the criterion of eco-design may lead to the requirement to modify the production system in the industrial sector - she adds.

fUNDING SOURCESProjects in the area of renewable energy sources and energy efficiency in Serbia may be funded in different ways. At the moment, Serbia is eligible to use IPA funds and bilateral grants, i.e. soft loans of international financial institutions, but when it joins the EU, greater resources are expected from structural funds.

On 1 January 2014, the Budget Fund for Energy Efficiency Im-provement started working. It has been planned to earmark RSD 300 million for it from this year's budget.

Alexander Varnavskiy,Deputy Director of Energy for

Implementation of Investment Projects

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COVER STORY18 COVER STORY 19

With regard to major commercial proj-ects, there are lines of credit such as the ones granted by the European Bank for Reconstruction and Development (EBRD), IFC - a member of the World Bank and German Development Bank KfW. For minor projects it is possible to secure funds from other lines of credit most frequently made available by commercial banks.

The Ministry of Mining and Energy is launching the Reducing Barriers to Ac-celerate the Development of Bio-Mass Markets project, which is to be imple-mented in the next four years with the UNDP by using the GEF funds. Among other activities, the project involves di-rect co-financing of six SNR projects on bio-mass use, bio-mass being the most potential renewable source in Serbia.

Anđelka Mihajlov says that energy efficiency and environment opera-tive designated funds are the main financial mechanisms and institutions in many countries for the provision of funds for stimulation of rational use of energy and increase of energy effi-ciency, i.e. implementation of demand-ing EU directives in the environmental

sector. To be able to use international funds to the full extent, Serbia has to demonstrate that it is ready to provide its own share, Ms Mihajlov says. According to her, there are estimates that the investments for energy ef-ficiency increase in line with sustain-able growth requirements will reach EUR 2.7 billion by 2030. Average annual investments amount to EUR 147 mil-lion. It has been estimated that ap-proximately EUR 1.05 billion or EUR 58 million per year will be necessary for transport with the reduction of con-sumption and emissions by 17 per cent below BAU (Business as Usual) by 2030. There are estimates that the total of approximately EUR 1.7 billion (or EUR 89 million per year) will be required for the housing, commercial and indus-trial sectors and that there will be a 12 per cent improvement in efficiency in all sectors compared to BAU, accompa-nied by reduction in emissions to 32.8 million tons, i.e. 11 per cent by 2030.

As Ms Mihajlov explains, the total esti-mated investments are to be subject to change under different assumptions of target energy efficiency and interven-tion costs.

For instance, Government incentives of 20 per cent for stimulating the investment required for the 20 per cent efficiency scenario by 2030 would represent the total expenditure of EUR 25 to 35 million per year.

- However, not all is expenditure - as a result, the costs avoided by 2030 would be higher than the investments, reaching the cumulative net benefit in the amount of EUR one to two billion or approximately 50 to 100 million per year - Ms Mihajlov emphasises.

The Western Balkans countries have committed

within the Energy Community to reduce energy use by

9 %by 2018

What are the objectives that the Western Balkans countries are supposed to meet with regard to energy efficiency?

The Energy Community has adopted certain energy ef-ficiency directives, namely Directive 2006/32/EC, Direc-tive 2010/31/EU and Directive 2010/30/EU. However, some important industry-related rules, such as the EU Emissions Trading System, are not applicable within the Energy Com-munity. We are currently studying the impact of the new EU Directive 2012/27/EU on energy efficiency.

What is the situation with renewable energy sources?

In 2012, the Ministerial Council of the Energy Community de-cided to implement Directive 2009/28/EC on renewable energy sources, which its member states were supposed to adopt by 1 January 2014. This involves the obligation of all member states to set their own national objectives, which are to be met by 2020, by promoting use of renewable energy sources in energetics, heating, cooling and the transport sector. Mem-ber states are to prepare national action plans on renewable energy sources, identify sector objectives, technologies they are planning to use, as well as measures and reforms to be imple-mented in order to remove the barriers to further development of renewable energy sources.

What is the role of the industrial sector in the process?

The industry should take an active part and support decision-makers in creating relevant profitable strate-gies and measures to promote rational use of energy as a benefit to all citizens. The examples of national policy mechanisms include taxes on carbon dioxide emissions, direct regulation of industrial processes for the purpose of emission reduction and introduction of standards for end users in terms of energy efficiency increase.

In addition, the industry may include objectives and tech-nical innovations related to energy efficiency in business plans. Apart from technological innovations, companies should adopt the practice of energy management by imp-lementing ISO 50001 Energy Management Standard for a system that promotes introduction of energy efficiency improvement and reduction in the emissions of harmful gases in routine business operations.

Furthermore, oil and gas companies may offer their customers specialised energy services, such as energy revision and consultation about reduction in energy use.

The industry should take active part and support decision-makers in creating

relevant profitable strategies and measures to promote rational use of

energy as a benefit to all citizens

Energy efficiency - West Balkans' objectives

Mini-view: Borko Raičević, Energy Efficiency Expert in the Energy Community Secretariat

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DossIER20 dossIER 21

Ivana Ristić

The region of former Yugoslavia has a strategic geographic position between the east and the west. Therefore analysts agree that it has great energy market potentials. These are currently not sufficiently utilised, but this could change mainly through joint regional projects. EU funds offer the most reasonable prospects for their financing.

Serbia's Chamber of Commerce reminds that the most re-cent major project involving at least two countries from the region was the construction of Đerdap Hydropower Plant on the Danube, a joint project of Serbia and Romania.

“Đerdap was the last major regional project in the energy sector. The next one will be the South Stream Project,” Slobo-dan Petrović, Secretary of Energy Division within the Serbian Chamber of Commerce, tells Energize.

However, more than three decades have gone by since. While the region is awaiting its next gigantic project that will connect it in terms of energy supply, the South Stream Project, minor projects are also needed to integrate the energy sector.

Mr Petrović confirms that around fifteen regional projects are currently active covering all energy segments. However, he warns that these projects are based on energy products or know-how ex-change, while projects involving joint entrepreneurship are missing.

“There is no joint production or construction of energy infra-structure,” Petrović says for Energize.

He goes on to say that plans are being made but not imple-mented. He explains that the Drina Basin offers possibilities for electricity sector and that there are plans in this area, but, according to him, it is difficult to reconcile different interests and demands of the states. “This is why there are no regional projects in the electricity sector, only plans,” says Petrović.

He adds that the next project to spur the region into joint investment could be a regional exchange of energy products and electricity, which should come to life in 2017.

Petrović stresses that it is NIS that pushes regional coopera-tion forward by expanding its areas of exploration and its retail network.

The region of former Yugoslavia, as well as the entire South East Europe, has

considerable unused energy capacities. There has been no major project for

more than three decades now, yet announcements from the European

Union, which sees the energy sector as one of the future’s crucial industries,

raise hope that there will be more funds for cooperation development

energy ConneCting the region

Regional Energy Cooperation

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DossIER22 dossIER 23

Evgeny Metelev, NIS Director of Department

for External and GovernmentalRelations in Foreign Countries

NEIGHBOURLY COLLABORATION

One of the regional projects involving this company as an active member of the National Petroleum Commit-tee of Serbia (NPCS) is BIOGOS, which is based on sharing Croatia’s experi-ence in implementing the 2009/28/EC Directive on Traffic Biofuel. The project is being implemented in 2014 through expert workshops organised in Bel-grade and Zagreb, and another work-ing group is actively preparing project recommendations and draft bylaws in Serbia’s biofuel sector, which must be adopted as this is Serbia’s obligation in the harmonisation process. In this process, cooperation has also been established with Serbia’s Ministry of Mining and Energy which is competent for adopting such bylaws and is repre-sented in the above working group.

Evgeny Metelev, NIS Director of Depart-ment for External and Governmental Relations in Foreign Countries, informs Energize that Serbia needs to harmoni-se its traffic biofuel regulations with the European standards by late 2014, and it will be useful to follow the practices of Croatia which has already completed the process. “This is not a commercial project, it concerns the provision of support to Serbia in establishing the legal framework for this area,” Metelev explains, adding that the project is an example of good regional cooperation given that it is not profit-oriented but aimed at developing legislation and governmental capacities along with prompting knowledge exchange with neighbouring countries.

“Such model of NIS’s participation will be applied in other projects in the futu-re,” announces Metelev.

The EU has approvedmore than

160projects to Serbia in the past seven years, only fifteen or so

in the energy sector. A total of

5,85

billion euros of the Europe’s budget is earmarked for

energy investments by 2020.

He stresses that this is only the initial stage of harmonisation with relevant EU policies, to be followed by the implementation of adjusted policies.

Metelev explains that regional coun-tries rely on one another in terms of energy which is a necessity since they are all burdened with harsh economic conditions affecting the energy market. He stresses that countries can play key roles in this matter.

“Energy companies can’t be successful unless they actively collaborate with the state. Businesses are only initia-tors of such integration,” he warns and adds that NIS payments account for 14 percent of the Republic of Serbia’s budget revenues and that the company plans to become the regional energy leader by 2020.

This goal can be achieved by cooperating more closely in the region through various joint energy projects.

The BIOGOS Project has been developed together with the Faculty of Engineering and Shipbuilding of the Zagreb University and was approved at the Know-how Exchange Programme (KEP) of the Central European Initiative (CEI). This regional organisation will co-finance 33 percent of the approved project budget totalling around 40,000 euros, whereas the remaining funds (around 24,000 euros) will be provided by the National Petroleum Committee of Serbia.

RENEWABLE SOURCES AS A PLATfORMGiven that the EU’s energy development strategies have long been focused on renewable energy sources, energy efficiency and environmental protection, experts see these three areas as the factor that can integrate regional countries through joint projects.

Jovanka Arsić Karišić, Management Board Chairwoman at CEDEF, an expert organisation dealing in education, discusses these topics for Energize and explains her view of the renew-able energy sector as a platform for intensifying regional energy integration.

“These projects are the future of regional energy coopera-tion,” says Ms Arsić Karišić, explaining this with the fact that all countries have the same task to realise, namely to reach the renewable energy target of 27 per cent by 2020. This will be a chance for ensuring a closer regional integration.

“There are always possibilities for a more intensive coopera-tion. It is important to ensure continuity of the energy stabil-ity of each individual country and the region,” she points out in her interview to Energize.

CEDEF has already established cooperation with Hungary, Macedonia, Montenegro and Republic of Srpska, and this organisation’s upcoming International Forum will concern biomass as the main RES in Europe and Serbia.

Croatia’s distinguished economist Damir Novotny shares this opinion. In his interview to Energize, he says that it would be beneficial to regional countries to connect not only through

energy policies but also horizontally, in production. All pre-conditions for this have already been met.

Croatia, Serbia, Bosnia and Herzegovina and Montenegro alike have both logistic and natural resources and renewable energy sources. He points out joint projects as particularly de-sirable here, especially on the Sava and the Drina, as well as in coal, woods and biomass industries. “These are all poten-tials that we are not using. We lack investors,” says Novotny.

He points out that regarding these ideas, the EU can provide good leverage given that the EU’s 2020 Strategy puts special attention on the energy sector. “EU funds and budgets could finance as much as 80 percent of the projects,” he concludes.Macedonia is also looking to regional cooperation. Lazar Gečevski, an energy consultant and former director of the Macedonian Energy Agency, says that each of the former Yugoslav countries is not sufficiently large for major energy undertakings individually, and this is why joint action is needed.

“The energy position of former Yugoslavia with its population of 25 million was extremely good. Now we have partial prob-lems, even bigger that before, because not all of them have equally developed their energy sectors,” says Gečevski. He warns that no one in the region uses European funds suf-ficiently for energy construction. However, he says, EU money earmarked for energy is yet to come so the region, in this expert’s opinion, should immediately take this opportunity.

“ The BIOGOS project, which NIS participates in, is an instance of good

regional collaboration, as it is not profit-oriented; rather, it is aimed at developing

legislation and the state capacities alongside fostering the exchange of experience with the neighbouring

countries ”

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intervieW24 interVieW 25

Tanja Miščević, Serbia's Chief EU Negotiator

Milica Bojović

The presence of Serbian companies in Brussels will become increasingly important as EU negotiations continue, and this is why the opening of NIS

Brussels Office is an excellent move

"I believe that there are cooperation opportunities both in Belgrade and Brussels, since the advice, assessments and know-how of your expects can be highly beneficial to the ne-gotiations," says Tanja Mišćević, the Republic of Serbia's Chief EU Negotiator, as she explains to Energize how companies can contribute to the process of EU integrations.

She adds that the presence of Serbian companies in Brussels will prove to be increasingly important as the negotiations with the European Union progress. "This is why opening a NIS office in Brussels is an excellent move," Miščević points out.

When asked if there were intentions to involve the most com-petent business and economic experts in the accession process so as to bring maximum benefits to the country from these negotiations in all areas, she replied: “Absolutely.”

"It is among our priorities to ensure transparency and inclu-siveness of the negotiation process, which means that we will seek advice from all stakeholders within negotiation groups. It is in our best interest – to listen to industry professionals and seek best solutions," explains Ms Miščević.

How is the accession process developing under current circumstances and has it been affected by the state of emergency caused by the floods?

"The negotiations are going as planned, screening has been car-ried out according to a set schedule and delegations have been well prepared. This was the Negotiating Team's contribution during the severe floods in Serbia, because we believe that these processes in the country must not be halted. In addition, we have informed our European Commission counterparts about the scope of the disaster that had hit us and they showed us that the

EU is ready to help to mitigate the damage. A considerable part of administration is working on these plans and projects develop-ment, but it does not affect the course of negotiations.”

What are the next steps ahead of Serbia towards its EU goals? What do you see as the biggest challenges in the accession process?

"We certainly plan to continue with the screening, that is, the analytical reviews of our legislation's compliance with acquis communautaire until March 2015. We have so far completed both explanatory and bilateral screening for 11 of a total of 35 chapters. We are also making preparations for a new phase of the negotiations i.e. chapter opening. This means that we are beginning to outline our first negotiating positions and action plans for the areas we expect to be first covered by screening reports, namely Chapter 32 on finan-cial control and Chapters 23 and 24 on the rule of law. We are also preparing a revision of the National Programme for Adoption of the Acquis, which will be a sort of the Govern-ment's plan on compliance with the EU agenda.

We will face the greatest challenges in agriculture, environmen-tal protection, energy, transport and rural development. These sectors are very complex, their harmonisation requires exten-sive funds, but Serbia is eager to reform these areas, because it sees in them a significant potential for its development.”

Many reports warn of candidate countries often being faced with problems with administrative capacities. What is the situation like in Serbia on this matter?

"From the very beginning our Team’s preparedness has been rated very highly by our partners from the European Com-mission. But this is the fact that has been highlighted by

We will involve experts in the negotiations

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intervieW26 interVieW 27

Introducing Serbia’s energy sector into the EU market should contribute to theenergy market’s liberalization, greater

usage of available energy sources, higherenergy efficiency and better utilisation of

renewable energy sources

European institutions for many years, as regards Serbia's in-stitutional capacity. We have an experienced administration working on harmonising domestic legislation with the EU Acquis since 2004 and on the negotiations since 2005, and afterwards on implementing the Stabilisation and Accession Agreement. Serbia's Negotiating Team consists of around 2,000 highly experienced professionals in all fields, and they will be joined soon by members of our core negotiating team who will coordinate the process of negotiation with me on some chapters.”

How has the administration proved so far? Are you satisfied?

"I am very pleased and thankful to my colleagues for the ef-fort and energy they invest. As I have already mentioned, it's a team of experienced people who are very good in their jobs but they are also strongly motivated as they believe that the process they have worked on for years will modernise their country.”

Could Serbia be faced with some special conditions and ultimatums, apart from those related to compliance with standards?

"As regards specific requirements to Serbia laid down in the accession process, they are primarily political and well-known. Regarding the harmonisation with European stan-dards, we cannot claim that new conditions will never be im-

posed and this is not surprising. Namely, the European Union is a moving target and a living organism in progress, so if the acquis is amended, we will have to apply new standards. This, for example, can occur with public tenders or food safety. Yet this is a phenomenon we will encounter upon becoming an EU member state as well.”

How does EU accession assist economic development? And how is it significant for energy in particular?

“Energy is among the most significant areas of activity of the European Union, which has traditionally invested efforts to ensure competitive energy supply. The regulation of this area affects the regulation of other sectors and therefore of a country’s entire economic system. In this respect, the energy sector’s impact on economy is crucial taking into account its share in the Republic of Serbia’s national product and budget. Energy is an industry indirectly linked to competition and consumer protection, environmental protection, higher employment rates, infrastructure, transport, agriculture etc. Introducing Serbia’s energy sector into the EU market should contribute to the energy market’s liberalization, greater usage of available energy sources, higher energy efficiency and better utilisation of renewable energy sources, introduc-tion and application of state-of-the-art energy technologies, improved energy-product supply safety, better state admin-istration in this sector and strengthening of international exchange.”

How important is it for Serbian companies to adjust their business operation to EU standards? Can they oth-erwise remain competitive at all?

“We all need to adapt and learn to be competitive in the mar-ket of nearly 500 million consumers. This is a huge challenge that can encourage us to be better, to improve, to modernise and to open up possibilities in such a large market.”

How much money from EU funds is available to Serbia in this stage? To what extent are businesses participating in attracting that money with their projects and which industries are the most common recipients?

It is among our priorities to ensure transparency

and inclusiveness of the negotiation process, which

means that we will seek advice from all members of negotiation groups. It

is in our best interest – to listen to professionals and

seek best solutions

“Annually, Serbia has access to an average of 200 million euros from the Instruments for Pre-Accession As-sistance (IPA). Various companies take part in numerous projects as service providers, contractors or equipment suppliers, which brings them profit. Most often, local companies are not direct IPA beneficiaries, but there are such examples in the energy and traffic sectors as well as among the companies developing innovation tech-nologies.

Companies can also apply for EU pro-grammes. Such practice will continue in the upcoming 2014-2020 financial period through new programmes we will join. It needs to be taken into ac-count that the amount of withdrawn funds will depend exclusively on the quality and success of domestic com-panies’ projects in tenders, given the fact that no funds will be earmarked especially for Serbia.”

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industry&business28 industry&business 29

New Profitable Business

Base Oils

The most significant comparative advantage of base oils project is the secured

raw materials base for the production of naphthenic and paraffinic oils and

lubricants. The oils business that has been moving into the company’s top gear has

great prospects to spread into new areas, as the NISOTEC oils production clearly shows

Vojo Krkobabić

The base oils production project being delivered by the Refining Block on the Novi Sad Refinery premises is a new profitable business that is to draw almost 120 million euros of investment in the next two years. This investment is fully based on the NIS ten-year development strategy of busi-ness diversification, which provides for broader range of new top-quality products in the category of naphthenic and paraffinic base oils and lubricants propelling the Company into an intrepid showdown on the global arena. In a pooled effort with a highly experienced Gazprom Neft subsidiary Gazpromneft – Lubricants, NIS strategic team has undertak-en a thorough marketing survey that suggested enormous profitability of the production on the Novi Sad Refinery com-pound. The preliminary production plan sets the volume of base oils output of this unit at approximately 180 thousand tons annually.

RAW MATERIALThe Novi Sad refinery output of new oils and lubricants to be sold across Europe and North Africa is based in own exquisite raw material base. This is Velebit, a naphthenic petroleum type unique for Europe, which is named after a deposit in Ser-bia’s northern part – Vojvodina – where it is being extracted. It is the source for producing naphthenic base oils and sub-sequently the final products: expensive transformer oils and metal treatment oils, as well as primer coating for paint-and-lacquer materials and plasticizing agents for polymers and rubber. The total annual Velebit crude output ranges around 250 thousand tons. Europe’s single producer of oils and lubri-cants based on this type of crude supplied from Venezuela is Sweden’s NYNAS.

The Pančevo Refinery is to supply another component raw material to produce paraffinic base oils, specifically a converted hydro treated residue (UCO) coming from the Mild Hydro Cracking and Distillate Hydro-Treating Unit, or MHC/DHT. This will be the raw material for paraffinic base oils to subsequently produce another type of expensive transformer oil for three types of motor, transmission and industrial oils.

ExCEPTIONAL MARkET ADVANTAGEThe current market offer of the overal production of naph-thenic oils and lubricants is hard pressed to meet demand on the European continent, which calls for North American supplies. An exhaustive sift probe supporting this invest-ment envisages a growing demand for these products in the next eleven years in the Balkans, south, central and north Europe. Against this backdrop of a sole manufac-turer of this kind of base oils located in Sweden more than two thousand kilometers far from the heart of the region concerned, NIS base oils production capacity in its very center is highly advantageous, with its low-cost transporta-tion along the Balkan major waterway Danube providing convenience to South-East Europe consumers.

The completion of base oils production project rounds off the refinery processing and broadens the product range, which brings significant advantages to NIS as producer of naphthen-ic and paraffinic oils and the whole string of finished products based on these raw materials. At this junction, Europe’s output of paraffinic oils of the second group is shrinking, with trend forecast for their upturn in the next five to seven years. Gazpromneft-Lubricants will be highly instrumental in set-ting up an oils and lubricants production centre in this region poised to supply entire Europe, Middle East and North Africa. Gazpromneft-Lubricants is an indispensable partner to help us deliver the strategy stipulating for our company to emerge as a major world player in the industry.

The Novi Sad base oils production project abounds with lo-gistical advantages like crude storage facility, components reception and final products dispatch network, huge tank farm, transportation by waterway as well as tank trucks and railway tanks.

Another obvious advantage of the project is the produc-tion facility operation within a customs-free zone, which will bring about additional channels for profitable market-based business.

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industry&business30 industry&business 31

SERBIA’S BESTA huge impetus for the completion of base oils project is a great success of NIS oils and lubricants NISOTEC programme, which is successfully implemented by the Novi Sad Refinery. This programme demonstrates a fast pace of growth of the oils business within the company, with great prospects for further development.

Over the course of the recent four years the sale of NIS Novi Sad Refinery-produced oils and lubricants has been steadily growing. Last year the market share of NIS-produced oils and lubri-cants exceeded 20 percent in Serbia, as compared to only two per cent back in 2009. NIS has now emerged as Serbia’s leader in this market with more than 80 per cent of supply to major consumers of oils and lubricants. The Company boasts awards for NISOTEC items quality from a great number of producers of vehicles and equipment, such as Mercedes, Volk-swagen, Volvo, MAN, Cummins, Renault, ZF, Voith etc. The proven quality and prudent business policies have made pos-sible the supplies to authorised dealers of Mercedes and Škoda vehicles.

In merely three years on the market, NISOTEC has evolved from an unknown brand into a household name and is now the largest domestic market share brand. Import ingredients are currently indis-pensable for the production of this oil, however, once the base oils investment project is complete it will be poised for blending out of our own components.

What are base oils?Base oils constitute the base of all lubricants – lubricating oils and greases and significantly affect their main features. Naphthenic base oils are used to produce oils for transformers and electrical switches, oils for cooling compressors, process and rubber oils, metal treatment fluids, industrial bitumen and some of the lubri-cating oils and greases.

Naphthenic Base Oils

Paraffinic Base Oils

Printing Industry Paints and Varnishes, Chemical Industry

Electric Energy Sector

Car Tyre IndustryTyre Production Plastics Production

NEWS

Motor Oils Transmission Oils Hydraulic Oils

Agricultural OilsIndustrial Oils Marine Oils

- Base oils production project, exceptionally important for NIS business operation development, for its diversification, broadening of production range and opening of new sales channels. We plan to output high quality products, five types of naphthenic base oils out of the Velebit crude and four types of paraffinic oils out of hydrocracking residue (UCO) created in the Pančevo Refinery. New method of base oils production along with the streamlined blending will constitute a founda-tion to create a new lubricants business in a pooled effort with Gazprom Neft, the business to emerge as a leader in the south-east Europe and become one of major European players. “It is also important that thanks to cooperation with “Gazprom-neft – Lubricants“ the larger portion of base oils within our own blending process we will be able to “transform“ into the finished products and place them in that form on the market to gain greater profit. It is our advantage that we already have a plan for the next five to seven years stipulating the placement of 70 – 80 per cent of base oils within the best quality finished products. Sales of the base oil solely would gain much lower profits, due to the significantly smaller margins in such a case.

TOP-NOTCH TECHNOLOGYIn the words of Andrey Dyug, Director of Project Office for the Organisation of Base Oils Production, this project envisages the streamlining of the existing capacities and construction of new facilities within the Novi Sad Refinery compound, specifi-cally: for hydro treatment (HDT), Hydrodewaxing and Hydro-finishing (HDW\HF) for the production of sulphur as well as the units for amine hydrogen sulphide removal from gas. – The raw materials and half-products, which currently cannot be sold as quality products, after the most progressive technologies are involved – ISOTREATING, deep hydro treatment under high pressure of vacuum distillate of the naphthenic crude Velebit and ISODEWAXING & ISOFINISHING, a selective cracking and of paraffinic hydrocarbons saturation – will be used as the sole raw materials to produce the best quality oils and lubricants in full compliance with the EU requirements – says Dyug.

- The Base Oils Centre construction is planned to involve around 20 local companies specializing in mechanical and construc-tion works, telecommunications, electricity networks, process equipment design and installation. Almost 10 thousand people will be directly or indirectly involved in the implementation of this investment. The pivotal business effects of this investment are: use of the Novi Sad assets and a revamp of production process, strengthening of Serbia’s real economy by reinvigorat-ing economic and production entities, Serbia’s increased foreign trade balance, increased budget revenues levied from additional taxes, gaining additional margin form the development of finished oils production, consolidation of the complete oils business into one hub, will bring about significantly diminished production and logistics cost, as well a synergy impact from the processing of the hydro treated MHC residues from the Pančevo Refinery.

Andrey Dyug,Director of Project Office for the Organisation of Base Oils Production

Dmitry Vukolov, Lubricants Department Director

Base Oil CharacteristicsBase oils to be produced out of the Velebit crude in the Novi Sad Refinery shall have the following physical and chemical properties: zero poly-cyclical aromatics, low yield limit, resistance to oxidation, very low sulphur con-tent and low volatility. Due to these features the finished products are made with the use of base naphthenic oils, which is their advantage. Tires made of naphthenic oils have longer useful life.

Naphthenic base oils are top quality raw material to produce transformer and

process oils, greases and refrigerant-lubricating fluids, with paraffinic base

oils used to make oils and oils for hydraulic systems

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industry&business32 industry&business 33

Defining Leadership

Development Strategy for Serbian Bunker Stations

Uroš Popović

Bunkering activity is becoming an increasingly predominant form of

business, encouraging intense traffic on the Danube River. Until recently,

ships that have been passing through Serbia had almost nowhere to fill the tanks with fuel. Although under the

original business plan, the products at the forefront of corporate operations

are undoubtedly intended for the road transport, the portfolio of the Petroleum Industry of Serbia includes fuel supply

on the major river routes as well

From the historical perspective, the river Danube has always had strategic significance for Serbia. Hydrologically speaking, Serbia holds a great potential for improving bunker station networks, the potential that can match significantly more advanced countries in the Old Continent. This position is ex-tremely favourable for vessel supply especially those sailing

from Regensburg to Constance and vice versa.

DANUBE BUNkER STATIONSAs the dominant navigational route providing Serbia with 588 km of middle course, allowing navigation and multi-mode transport, the Danube also represents a significant pan-European Corridor VII and the strategic link with Europe and Eurasia which should encourage the development of trade, tourism and service support, especially because the river transport is one of the cheapest. As it flows through ten states, from its source in Germany all the way to its outlet into the Black Sea, there are numerous bunker stations set up at the distance of 2,888 km. In terms of significance and the quality of services they provide, the ports falling under the category of the distinguished ones comprise the Port Rousse, Bulgaria, and Budapest on the territory of Hungary

(1640 km). In Slovakia we will certainly mention Bratislava, providing complete bunkering service at the distance of 1,866 km, whereas in Germany we would certainly single out Pas-sau (2228.38 -2233.45) and Regensburg (2373.00-2379.00 km). In Austria there are five points: Linz (2,128 km), Enns (2,112 km), Korneuburg (1,942 km), and Vienna (1,920 & 1,929 km). Ukraine is distinguishable by 61. Mile, and as far as the Re-public of Croatia is concerned, there is currently one bunker station, Nautica Vukovar (1335+500 km), synonymous with the town it is located in, providing fuel and lubricant supply services since 1999.

In accordance with the development strategy, two years ago NIS launched a new business- ship bunkering, i.e. supply-ing domestic and foreign vessels with the superb quality EURO Diesel. In this way, the Petroleum Industry of Serbia guarantees a reliable fuel supply on the important water-ways in the country to all interested shipping companies. Considering the fact that the demands of domestic shipping companies, as well as foreign fleets in transit are estimated at approximately 40,000 tonnes per year, the Bunkering Sec-tor promotes a development plan implying the expansion of the existing network. Since, taking into account current and projected needs of the domestic fleet, coupled with all the other international lines available, the necessity for the expansion of the existing facilities is imperative. Current fa-cilities include three modern, fully equipped bunker stations,

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industry&business34 industry&business 35

positioned to extremely favourable strategic locations on the Danube - in Novi Sad, Veliko Gradište, and since recently in Prahovo. Mihajlo M. Đurovic, Director of the Bunkering Sector operating within NIS j.s.c., states that the company's top competitors tend to be Vienna, Rousse and 61. Mile (near the Port of Reni in Ukraine) bunker stations. The total capacity of the Novi Sad bun-ker station amounts to 2,000 tons, and the one in Veliko Gradište to 1,280 tons. The latest in a series is the Prahovo bunker station with the total capacity of 2,342 tons. Namely, a significant capacity of the bunker stations ensures a great stability in supply, guaranteeing an exceptionally high level of reserves and the possibility of providing services without any delays.

BACk TO WHERE IT ALL STARTEDMihajlo M. Đurovic says that every beginning is hard, and so was the be-ginning of the bunker supply project in the territory of the Republic of Serbia, which, according to him, was expected after all.

-Namely, NIS j.s.c. used to supply vessels with fuel at several installa-tions, but these operations were put to an end after the NATO bombing in 1999 due to the significant destruction suffered by many facilities. After the company’s acquisition by Gazprom Neft, the logical step to follow was to re-activate the bunkering operations among the rest. Also, I have to add that the major problem we encoun-tered was the lack of legal regulations in place which would regulate this activity and significantly shorten the implementation of many projects. In December 2013, the adoption of the Act by the Government of Serbia fol-lowed, governing vessel fuel supply in the technical sense. Elaboration of this regulation was supported by our experts with an international experience, making thus the use of the experience of the Danube River

The total capacity of the NIS bunker stations is currently

5.622 t of euro diesel, which ensures a constant availability and secure supply to our customers at every moment

Basin District countries in particular, such as Germany and Austria - says Đurovic.

Two years following the official com-missioning of the first bunker station in Novi Sad, visits and sales reported a growing trend.

Should we compare the first four months of 2014 to the same period of 2013, the results would reflect an evi-dent 15 per cent increase in the sales - emphasizes Mihajlo M. Đurovic. - Also, when it comes to commercial fleet, which constitutes the greatest custom-er segment, we can say that, compared to 2013, recording the total number of 883 vessels calling at the station for fuel supply, these figures are expected to rise. The 2014 Calendar Year End is

CZECHREPUBLIC

SLOVAKIA

HUNGARY

POLAND

UKRAINE

MOLDOVAAUSTRIALINZ

REGENSBURG

VIENNA

BUDAPEST

BRATISLAVA

BUCHARESTCONSTANTA

VIDIN

NOVI SAD

GOLUBACBELGRADE

MOHACS

GERMANY

SLOVENIA

CROATIA

BULGARIA

FYR OF MACEDONIA

MONTENEGRO

BOSNIA ANDHERZEGOVINA

ITALY

SWITZERLAND

SERBIA

ROMANIA

40.000 tons of EURO diesel needed by the vessels on

the Danube through Serbia

883 vessels docked at NIS

bunker stations in 2013.

1.000bunker services

expected in 2014.

530 cruisers dock at Belgrade

during the season

70 % of the total vessels

docking are overseas

BUNkERINGIN fIGURES

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industry&business36 industry&business 37

expected to record more than 1,000 registered bunker operations. As far as the domestic/foreign fleet ratio is concerned, as expected , the overseas transit fleet seems to prevail 70 - 30- as stated by Nikola Bogicevic, Expert Sales Co-ordinator, Bunkering Sector.

PREVENTION ECOLOGY All bunker stations have been granted permissions by the compe-tent authorities, primarily Decisions issued by the MOI as a documentary evidence of compliance with the fire safety technical requirements, as well as regular inspections conducted by the competent authorities.

In particular, when it comes to the oil spill protection, all our bunker stations possess adequate protec-tive barriers, equipped with special absorbents for collection of potential spills, and special "Euro-couplings" for spill-free and safe fluid handling, the so-called “drybreak loading” prevent-ing spillage during loading. Also, there is an additional automatic shut-off system to prevent potential overflow of a shipping tank. As far as the fire safety is concerned, our bunker stations have both mobile and stationary systems equipped with fire safety systems with manual and automatic remote con-trolled water cannons. These systems are subject to regular inspections and functionality checks - specifies Đurovic.

Nikola Bogicevic, Bunkering Sector NIS j.s.c. says that bunker stations operated by the Company employ highly trained personnel, i.e. the crew, which represents the key and one of the most efficient protection from any environmental threat owing to the strict procedures.

PLANS AND PROSPECTSIn the forthcoming period, as explained by Đurovic, the commissioning of the Smederevo bunker station is scheduled, which will exclusively be intended for domestic fleet operating in the territory of the Republic of Serbia. - This bunker station is expected to launch its formal operations during the upcoming summer season. As far as the Bezdan installation is concerned, currently it is in its recon-struction phase, whereas the ongoing works should be completed by the end of the year- Đurovic concluded.

Ljubinko Savic, an Independent Expert on Energy Issues from the Serbian Chamber of Commerce states that a bunker station does not need to be only a place to fill up the ship tank, moreover, it can be a perfect rest area offering minor servicing in addition. - One of the

emerging opportunities to recognize and act on under this development strategy is the construction of the LNG (lique-fied natural gas) vessel supply stations servicing the ports to be included in the TETN (Trans European Transport Net-work) system. The construction of LNG stations is envisaged under the proposal of the new EU Directive governing al-ternative fuels infrastructure across the EU. The Danube River is certainly a part of the TETN system, with Belgrade and Novi Sad marked as so-called "nodes" in-tended for future network of intermodal transport system - clarifies Savic.

-There is also room for improvement seen in taking a position in the market of providing fuelling services for the so-called "White fleet", the popular river cruisers which can be seen on the Sava Port.. Around 530 cruisers dock at the Belgrade Port during the season, which lasts for approximately seven months. We have already undertaken certain activities aimed at implementation of this project - highlights Đurovic.

First Class Fuel

Providing fuelling services for domestic and international ship liners falls under the scope of the portfolio compris-ing a full product range that can be classified into the category of premium fuels in all parameters. With the strong desire to provide its customers with the highest-standard service, NIS j.s.c. in line with its firmly estab-lished reputation, opts primarily for the high- quality fuel that complies with the applicable standards at the inter-national level to seal this leadership position. Namely, the Euro Diesel produced by the Petroleum Industry of Ser-bia allows maximum ship performance, proper function-ing, ignition and operation of the engine. Produced under most stringent specifications, the EURO Diesel quality is fully compliant with the European standard EN 590.

Upon receipt of the goods at the bunker station, an independent quality control specialist performs a fuel sampling sourced from the ships carrying the cargo. Then the samples are to be tested in an accredited labora-tory. It is only after obtaining the certificate of quality, that we proceed to unloading. Upon receipt of the fuel at the bunker station, the sampling procedure follows once again coupled with the quality and quantity controls respectively. Certificate of quality for fuels from the bunker station tank is submitted to the customer along with the shipping document, and one-litre arbitration sample sealed in the specimen bottle marked with a number registered in the supporting shipping docu-ments, i.e. a dispatch note accompanying the goods - bunker delivery note.

Also, the Petroleum Industry of Serbia shall attempt to expand the scope of its activities and introduce providing fuelling services for Sports & Recreation fleet in the forthcoming period. If we take Belgrade as an example, which is positioned on two rivers and features a large number of small vessels berthed at the growing number of marinas, and at the same time take into account the fact that there is no station to provide fuelling services, it is clear that it is more than necessary to regulate this area in a safe and environmentally friendly manner, concludes Bogicevic , Bunkering Sector, NIS j.s.c.

For customers in the transit fleet, supplied through customs warehouses, fuels are less costly for the amount of VAT and excise duties, in accordance

with the applicable legal regulations of the Republic of Serbia in place. In other

countries of the Danube River Basin District, there is a VAT burden imposed on fuel, even though they get the VAT refund indeed, as a result of refraction

proceedings, but it is a time consuming and often expensive process

003

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region38 region 39

energetiC openingfor Business

Bulgaria

Beloslava Petrova

Bulgaria is one of the priority targets for NIS retail network development in the region, since it provides the strongest synergy effect and creates a favourable environment for market entry.

The subsidiary NIS Petrol EOOD is registered in this country; it is currently in possession of 42 assets – petrol stations and construction land. The first GAZPROM-branded petrol station in Bulgaria opened in mid-2013 and by late 2015 there will have been more than 58 GAZPROM facilities in operation in that country. NIS Petrol has also acquired a storage facility in Kostinbrod near Sofia having thereby created opportunities for fuel distribution from Serbia to its own retail facilities, as well as for launching wholesale.

A NEW PLAYER ARRIVESNIS Petrol's entry into the Bulgarian market has been „highly energetic,“ as commented by the eminent magazine Kapital - Top 100 companies in Bulgaria that publishes research, current information, analyses and trends in Bulgaria's eco-nomy annually.

- An investment player with a highly energetic entry, setting out to grow in wholesale and retail and aiming at taking a market share in the upcoming period” is how this magazine describes NIS Petrol when analysing the fuel market.

Bulgarian economic experts are expecting a market rearran-gement and changes in the sector, both in wholesale and re-tail, in view of the fact that NIS Petrol relies on importing fuel from its Pančevo Refinery, which is owned by NIS. NIS Petrol

Experts are expecting a rearrangement in the Bulgarian petroleum product wholesale and retail markets. The entry of a new player,

NIS Petrol, has been described as highly energetic and

30 Gazprom-branded stations have opened

in that country to date

has also invested in purchasing a new fuel storage facility in Kostinbrod with a storage capacity of 15,650 m3.

So far 69 million euros have been invested in petrol station network development and the acquisition of the oil storage facility. “Petrol station network development is crucial for att-racting new clients and increasing fuel sales. The company's goal for this year is to open more than ten petrol stations, - says Ivan Kostadinov, General Manager of NIS Petrol Bulgaria.Meanwhile, NIS Petrol EOOD has won numerous awards including the “Successful Market Entry Award,” presented by the eminent economic and political magazine Economy, and “Investor of the Plovdiv Region Award” in April 2014.

“ Our company's goal is to provide high-quality fuel and attractive products to our clients. Furthermore, our goal is to set a new, high standard of service. It is

very important for us that each customer returns after the first visit to one of our

petrol stations and becomes our partner and clienti ”

Ivan kostadinov, General Manager

of NIS Petrol Bulgaria

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region40 region 41

SUCCESS ACkNOWLEDGED

Meanwhile, NIS Petrol EOOD has won numerous awards, inc-luding the "Successful Market Entry Award", presented by the eminent economic and political magazine Economy, as well as the "Investor of the Plovdiv District Award" in April 2014.

NIS Petrol EOOD received the "Investor of the Plovdiv Distri-ct Award" for the development of its retail chain under the GAZPROM Petrol brand. Daily Maritsa, the leading newspaper in the Plovdiv district, traditionally awards the companies making a major contribution in terms of investments and tax payment in the region.

At the moment, there are seven petrol stations in the Plovdiv district operating under the Gazprom brand. On this occasi-on, Ivan Kostadinov said that the company had come to the Bulgarian market to stay for long.

- Our company's goal is to provide high-quality fuel and attractive products to our clients. Furthermore, our goal is to set a new, high standard of service. It is very important for us that each customer returns after the first visit to one of our petrol stations and becomes our partner and client, said Kostadinov.

So far

69 million euroshave been invested in petrol

station network development and the acquisition of the oil storage facility

BOTH REVENUES AND PRICES GROWThe Bulgarian market has been characterized lately by reduced gasoline consumption and an increase in diesel and LPG sales volume. The increase in diesel consumption may be explained by an increasing use of the fuel in transport industry, as well as by the emergence of modern and more efficient engines.

Fuels have traditionally been the pillar of economy. As the data of the magazine Kapital - Top 100 Companies in Bulgaria show, in 2012, the revenues from this industry for the first 20 companies grew by 4.45% on average year-on-year. Meanw-hile, average wholesale and retail fuel prices rose by 3.21% compared to 2011. In retail, the growth was 4-5%. The sales increase resulted from higher prices, and not from the overall sales volume increase, the magazine says. This, naturally, does not apply to all players - some have sold more compared to their competitors.

BUSINESS IS THE kEYGergana Sheytanova, Corporate Sales Manager in NIS Petrol Bulgaria, says that corporate clients have various shares in the total fuel consumption depending on fuel type.

BULGARIA

In Bulgaria, NIS Petrol EOOD has introduced a modern concept of petrol stations that offer a variety of

additional services, bringing consumers to the focus attention

In order to attract corporate clients, the Company implements numer-ous measures and tools. In the first five months of 2014 these activities led to a reported fuel sales growth of 52 percent. The number of contracts concluded directly with corporate clients grew by 31 percent in average, while the average increase in Gaz-prom cards, which offer special terms of use, amounts to 36 percent in the observed period.

Gergana Sheytanova also stresses that - the fact that clients have been successfully won over from competi-tors results from NIS Petrol's competi-tive financial offer – discounts, flexible payment terms and product quality.- This business segment is expected to continue its positive trend through corporate debit card sales and the pos-sibility to use these cards in our petrol station retail network abroad – in Ser-bia, Romania, Bosnia and Herzegovina, as well as through partnerships with international companies such as DKV, UTA, E100, Evrowag.

In Bulgaria, NIS Petrol EOOD hasintroduced a modern concept ofpetrol stations that offer a varietyof additional services, bringingconsumers to the focus attention.

- The advantage of Gazprom petrol station retail network lies in the bal-ance between fuel price and quality, which distinguishes this network making it more attractive to our clients and their preferred choice. This is a successful formula: to attract clients, to make a trademark recogni-sable thus building loyalty,- explains Ivan Kostadinov, General Manager of NIS Petrol Bulgaria.

Gazprom as a premium chain intro-duces top standards, and its products are compliant with the latest European standards. Gazprom petrol stations offer top-quality fuels which improve engine performance and lifecycle, reduce exhaust gases and therefore bring less damage to the natural environment and more pleasure in driving. Each petrol station has a convenience store, a res-taurant and a cafe. Stations also provide other services such as wireless internet.

- Our company's goal is to offer high-quality fuel and attractive products, tailored to our clients' needs. It is also our goal to set new, high standards for services. It is highly important to us that each customer returns after his/her first visit to one of our sta-tions and becomes our partner and a long-time client,- said Ivan Kosta-dinov, General Manager of NIS Petrol Bulgaria.

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ENVIRONMENT42 ENVIRONMENT 43

Wastethe Waste

Environment protection

Serbia’s industry faces numerous problems concerning the adequate non-

hazardous waste disposal, hazardous waste in particular.

NIS hazardous waste management system made novel technologies part and parcel of its operation, seeking to reduce

hazardous waste quantities

Nenad Stanojevski

Serbia’s factories have generated more than a million tonns of historical hazardous waste in the past, with up to 200.000 tons of new waste piling up every year and being randomly disposed of. The recent floods that befell the country and the whole region, have yet again highlited the importance of responsible waste management, the hazardous waste in particular, as its irresponsible random disposal might, under the circumstances, have a devastating environmental impact. Siniša Mitrović, advisor to Serbia’s Chamber of Commerce chairman, describes the aftermath of the floods in Serbia as both a predicament and an opportunity. – The time is ripe for new solutions and new technologies – Mr Mitrović said.

Hazardous waste disposal is a pressing problem that has now come to a head, as currently there is not even reliable data on the quantities of hazardous waste being generated.

In the words of Radmila Šerović, who heads the Waste Disposal Department in Serbia’s Agriculture and Environ-ment Ministry, amendments to the Waste Management Law provide guidelines for responsible hazardous waste manage-ment, specifically its recycling. – Endorsement of this law is a priority, as it is to determine criteria stipulating under what circumstances waste can be considered raw material. We seek to set up a plant in Serbia for mechanical and chemical treat-ment of waste, and the location for it is soon to be determined. This incinerator is needed to further treat the communal and medical waste. We have been making the respective efforts based on National plans and reports – Ms Šerović said.

Tatjana Đurić, assistant secretary for urban planning, cons-truction development and environmental protection in the Autonomous Province of Vojvodina, points out that the hazar-dous waste management pivotal problem is the inexistence of national plant for mechanical and chemical treatment of hazardous waste and regional hazardous waste disposal areas envisaged by Serbia’s spatial planning, inadequately solved management of packaging waste contaminated with hazardous substances as historical contamination. – The cur-rent problems might be solved by putting urgently in place a national plant for physical-and-chemical treatment of waste and another five regional waste disposal areas in conforman-ce with the National Waste Management Strategy, as well as by raising public awareness - asserts Tatjana Đurić.

EU SUPPORTEuropean Union also lends its hand in settling the issue. Rainer Freund, project manager for environment protection and agriculture within EU Delegation to Serbia, says that hazardous waste makes up only 4% of the EU-generated waste. However, if not properly treated, hazardous waste might cause great prob-lems both to humans and environment. Around 25 per cent of EU-allocated funds are intended for environment protection, specifically 700 million euros has been set aside for the purpose since early 2000. In the period since 2004, 60 million euros

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ENVIRONMENT44 ENVIRONMENT 45

have been earmarked to facilitate Serbia’s seeking solution for waste management – Freund points out. According to him the largest portion of funds has been used to construct facilities for communal waste management in Serbia’s towns of Užice, Pirot, Sremska Mitrovica, Šabac, with more venues of the sort still to come in the future. – The allocat-ed funds were also partly intended for the management of specific waste streams in Serbia, such as medical waste and Serbia is expected to prevent the untreated landfilling of this waste. A feasibility study is being drafted for Serbia’s first industrial waste treatment. Furthermore, an agreement has been reached with the country’s government to put together the National Hazardous Waste Management and Action Plan – this calls for an assessment of all waste streams, including the specific ones and creation of a long-term framework for priorities and investment in this realm – says Freund.

WASTE MANAGED BYNOVEL TECHNOLOGIES

Svetlana Duvnjak, NIS environment protection sector director highlighted the problems facing Serbia’s industry in terms of appropriate disposal of non-hazardous waste, in particular the hazarous one. – Scarce operatiors possessing licences for stor-age, treatement, and most importantly disposal of industrial waste, poses a serious problem for us, as it hampers the statu-tory handling of waste. The capabilities belonging to several

operators, who in effect manage the communal waste landfills, are insufficient. The hazardouse waste generated by industrial production is required to be exported, which significantly in-creases the waste management cost – Ms Duvnjak says.

The NIS company, on top of numerous other problems, and tak-ing into account organisational complexity, as well as the wide plethora of hazardous waste generated annually, has managed to properly dispose of significant quantities of hazardous waste.

- We seek the soonest permanent disposal of all generated waste, hazardous in particular – she states.

According to her, in terms of hazardous waste management NIS has been actively reducing the quantities of hazardous waste by incorporating ultimate technology in its operation. The company obtained a drilling mud recycle plant for oil and gas exploration process, as well as tank cleansing device, which significantly reduces the quantity of solid oil waste (up to 70%), and the Spent Acid Regeneration Unit. These activities have significantly diminished the waste quantities, however, the problem is still not settled...

DRILLING RIGSNEAT AND DRYOver the course of 2013 NIS outfitted its four drilling rigs with a “Dewatering System“ which puts in place a flocculation circuit with two hydraulic centrifuges.

Dewatering System supplants disposal of spent drilling mud (working fluid used in drilling) in mud-storage pits at the very location of drilling well construction, while minimising the drilling negative environmental impact.

This type of drilling meets the most stringent occupational and environmental safety standards. It envisages a continued draining of mud-storage pits and its disposal at dedicated landfills. So, this is a closed-circuit system, which ensures a maximum soil protection from contamination and con-forms to the strictest environment protection standards.

The completion of this project has brought about adequ-ate working conditions, both in terms of environmental

“ NIS hazardous waste management system made novel technologies part and parcel of its operation, seeking to reduce hazardous waste quantities ”

Svetlana Duvnjak, Director

NIS Environment Protection Sector

MOBILE TANk CLEANSINGThe crude and its products storage process during extrac-tion and refining as well as the sales and distribution of petroleum products, involves a great number of tanks (over and underground), which require regular cleaning once in 10 years. Estimated quantities of oily waste generated in the process of tank cleaning in one year is 3000 m3. In 2013, NIS acquired a Mobile plant for tank cleansing and crude oil residue. By treating this residue this plant significantly di-minishes the oily waste quantities ( up to 20 per cent of the overall crude oil residue in a tank) which reduces the cost of oily waste treatement and significantly reduces the area for waste disposal.

Major economic effect is achieved in the quantities of pe-troleum products set off from the residue and subsequently recycled in production (depending on the type of petroleum products, this percentage is between 60 and 80). Available capacity of the plant makes possible the treatment of crude oil residue of 10 cubic meters per hour. This practically means that the refinery tanks with the highest level of resi-due may be cleaned in only ten days.

The dewatering system implemented by NIS makes it possible to protect the environment, above all the ground, and ensures occupational safety and health

for the employees during drilling operations

protection, soil protection most importantly, and in ter-ms of providing safe and healthy workplace for drilling opertors. The incorporation of this equipment will result in more efficient and prolific use of available resources, whereby environment-wise the impact is evident, as mud pits digging becomes redundant, there will be no negative effect on soil and the whole drilling process will comprehensively diminish its netative environmental effects.

According to Predrag Plančak, manager of HSE Unit within NIS Oilfield Services, the implementation of this project, in addition to the perfected environmental protection, we will have improved occupational health and enhanced working conditions at the very locations, drilling rig compounds.

- Pit-free drilling project, other than putting in place the gear for treatment of drilling fluid (mud), shall greatly diminish the risk of wet and slippery surfaces at locations, it will make possible easier sanitation management at drilling compounds and inside the personnel housing units, as well as conditions for safer vehicle movement (lorries, car-lift trucks, cementation rigs...) around the compounds - Plančak says.

Environment-wise pit-free drilling ensures: • reduced drilling mud required for drilling, which, in turn diminishes the quantity of spent fluid (bentonite clay with some chemicals) and drilling cuttings,• luid phase may be used for makeing the drilling mud or freely disposed of in the environment,• during drilling the spent drilling returns are removed into metallic containers, which prevents soil and ground water contamination,• reduced overal period for well completion (high pace drill-ing, bigger productivity), thereby the impact time of drilling on the environment (chemicals handling, equipment opera-tion, use of vehicles etc. ).

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hr46 hr 47

FIRST CHANCE Slotting Graduates into Jobs

HR

Youth unemployment figures cause alarming concern both in developing countries and in west European states. An entire generation of people younger than 25 face a bleak prospect of failing to enter the labour market. The European youth unem-ployment rate is 23 per cent according to official data. Only 34 per cent of EU denizens aged between 15 and 29 employed, majority of this group being part-time workers. The problem is especially pronounced in some EU member-states in the east and south of Europe, which along with the very high unemployment rate among youngsters are plagued by brain drain. In the future, these countries might even experience a shortage of qualified workforce.

Serbia’s Labour Ministry said in its last year report that 50 per cent of the young in the country are jobless. World Economic Forum’s most recent Global Competitiveness Report ranks Serbia third in terms of brain drain. Circumstances are not more cheerful across the region. Youth unemployment rate stands at 48 per cent in Croatia, 53 in Macedonia and stagger-ing 57 in Bosnia-Herzegovina. The young are typically the first to face the loss of employment in the time of crises.

INVOLVE THE BUSINESSESThere has been a raft of European Union activities intended to provide the young with jobs, with respective allocation of funds, which makes the leading EU members assured that the existing programmes will bring about favourable outcome over the course of the next two years. One of the EU countries’ central programmes envisages the involvement of private businesses in settling this issue, as state agencies alone cannot cope. As German Chancellor Angela Merkel put it: - Companies create jobs, not politics.

Along these lines the “Adriatic Initiative for Employing the Young” has been launched. As many as 21 companies operat-ing in the Balkans, including NIS, have joined the initiative. The signatories to this cooperation charter pledged to bring young people aged between 18 and 30 into the labour market by of-fering them employment according to their corporate needs.

This Charter was signed at the international “HR Business Arena 2014” held in Dubrovnik this time round. This was the 12th conference organised by Infoarena. Karmen Majetić Pavić, the conference programme director, who also runs the “Tagoras” company used the opportunity to make public the corporate pledge to pool effort in the next three years to di-minish the unemployment rate by creating joint programmes and providing education. – This initiative emerged in the aftermath of great unemploy-ment among the young world over, especially in the Balkans. Its objective is to involve the signatories in the settlement of the issue. Each one is to appoint a representative and set up a small association to provide the exchange of information on the ways to employ the young and involve them in their train-ing programme – Ms Majetić Pavić explained.

She went on to say that the objective is to inform the young and pinpoint the businesses having the youth employment programmes.

The conference was attended by more than 200 participants from 17 countries. NIS used the opportunity to present its two projects “The Power of Knowledge” and “NIS Chance”. “The Power of Knowledge” project envisages partnership with educa-tion institutions in the country to help them train quality pro-fessionals for subsequent employment in NIS. This cooperation made scholarships available to many students, gave them op-portunity to undergo vocational practice and further develop, acquire new knowledge and deliver research projects.

European Bank for Reconstruction and Development has thrown its weight behind the Initiative of Dubrovnik. Vedrana Jelušić Kašić, EBRD Croatia director, pledged to make the en-tire initiative part of their projects. “This would represent our clients’ commitment, in a way, to employ a certain number of the young, or at least revamp their employment rules, or provide training”, she claimed.

More than 700 young people has found job through NIS “First Chance” programme of employment for inexperienced youth. 90 per cent of them are still on the company staff. This year the com-pany plans to give a chance to another 150 young people to work.

Providing employment to the young requires well-thought-out corporate-subsidised vocational practice, overhaul of education

system along with encouragement of entrepreneurial spirit

Vesna Lapčić

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hr48 hr 49

NIS representatives, who attended the conference, took part in panel discussions focusing on talent management and the future of trade, i.e. which professions and job profiles will be in employers’ demand in the near future. The focus was also on the problem of employers’ readiness to absorb new genera-tions of employees, the young often described as Generation “Y”, with their special outlook, value system and demeanor in the work place.

UNIVERSITIES AND COMPANIESPublic sector, state agencies and education system are to be involved in the entire Project.

Numerous surveys found that upon graduation the young are not ready for labour market and that it is not an easy task to find up-to-the-mark professionals to meet high requirements of modern business operation, which makes close cooperation with universities a must. A pervasive acute question in the EU countries is a wide gap between the skills acquired by the young professionals in their curricula and the employers’ needs.

Neda Stanković, who coordinates Smart Collective – Serbia’s Youth Business programme, says that a pivotal pre-requisite

for the youth employment is a reform of educational system along with the involvement of private companies by provid-ing serious vocational practice for the young. – It is a fact that the young are extremely incompetent upon graduation and that companies perceive employment of the young as a loss. This is why a greater number of companies ought to develop prudently devised vocational practice for which the young would get paid as they train. Currently, there are precious little programmes of the sort, and they ought to be compulsory for both the companies and the students, Ms Stanković points out.

Nataša Stamenković, NIS HR director, says her company is focused on the newcomers. - A lot is being invested in the cooperation with universities that train the staff we need, as it is crucial for a long-term sus-tainable development of NIS. It is not always possible to find on the local market specific professionals to meet high require-ments of modern operation of our company. So, we make ef-forts to shape the young professionals before they come on NIS staff, while they are still students. We try to compel them to “attach” with NIS, to start perceiving our company, before they graduate, as a desirable work place, hence to develop loyalty towards the future employer. Other than that, as they work with us, we convey to them the business operation rules of the best world practices. The young are quick in gaining experi-ence, skills and capabilities to assume responsibilities in the Company’s pivotal positions – said Nataša Stamenković.

The Dubrovnik conference participants were informed of NIS vibrant employment of the young and the company’s estab-lished cooperation with two biggest universities in Belgrade and Novi Sad, involving scholarships for students in the coun-try and abroad, creation of curricula in conformance with the corporate requirements, exchange of knowledge between NIS professionals and academics, outfitting classrooms and sup-porting competitions in physics, mathematics, chemistry and Russian language.

Milan Matić, a junior engineer in charge of power generating equipment in the Infrastructure and Operational Support De-partment of Exploration and Production, came on NIS staff on 1 July in the capacity of junior engineer for power generating equipment through the “NIS Chance” programme.

- This is my first work experience, so it is very important as the employment came right on the heels of my graduation, which brought about a continued process of further development and professional progress. My job is primarily about drafting trans-former stations mains supply block diagrams as well as bore holes mains supply block diagrams. In addition to this I moni-

tor diesel electric power units operation. The experience gained in making analyses, design briefs for electric power equipment and cable networks, monitoring the electricity consumption, as well as the acquaintance with functioning and organisation of a major company as NIS is really of huge importance – he says.

Karmen Majetić Pavić has announced another HR Arena for late September in Croatia, with another one to be held early October in Belgrade, where the local challenges will come under operative discussion.

- We aim to somehow set in motion the consolidated efforts by the economy and the state, because we see that state agencies cannot cope with the youth employment problem, and this is our future - Majetić Pavić said.

On its way to the European Union Serbia is in store for ob-ligations in terms of providing employment to the young. It is not going to be an easy task, unless these initiatives are implemented. This is unless the state is poised to increase its already cumbersome public sector, which would spell bankruptcy for the country. To be specific, the European Commission in its annual survey of growth and develop-ment (2013), pointed out that the member-states are to provide to the young a successful transition from educa-tion system into the realm of employment and to actively facilitate development and implementation of programmes and arrangements for education, employment and social inclusion of the young. One of the guarantee arrangements for the young is based on the rule to provide each individ-ual younger than 25 with employment or internship within four months of their graduation. Croatia has accepted this arrangement as soon as it acceded to the European Union, seeking to improve the position of the young.

Entrepreneurial spirit strengthening

To bring about the youth employment, educational reform along with vocational practice, it is essential to develop entrepreneurial spirit. 70 per cent of the young people in Serbia wish to get employed in a state agency, which, in her words, reflects the culture and parental advice. – Parents typically claim that for their children the most important is to land in a secure job. Young people are pretty much afraid of failure, so risk is not something plausible. This is why it is essential for the state to provide incentive to the youth entrepreneurship by offering tax breaks, and encouraging banks to allocate funds for this. People with developed entrepreneurial skills, even if their private business fails, are subsequently much better equipped to find a job due to their profound familiar-ity with business processes – explains Neda Stanković.

Serbia’s Labour Ministry said in its last year report that

50 % of the young in the country are jobless. World Economic Forum’s most recent Global Competitiveness Report ranks Serbia third in terms of brain drain

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Energy of Success

Interview, Novak Đoković

Novak Đoković, one of the world's top tennis players, speaks for Energize about his road to success, believing

in himself and his goals, rivalry, team work, Serbia and other topics

Nenad Stanojevski

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What guided you through your formative years and gave you strength to carry on and persist with your goal to become the world No 1?

First and foremost, it's love. Love for tennis, the sport I breathe, live and en-joy every day. When you love what you do, it’s far easier to overcome all the obstacles in front of you. You don’t find it hard to train five or six hours a day, abiding by a strict schedule of activities and rest, while your friends go out to concerts or clubs. You don’t find it hard to sacrifice other things either, knowing that you are dedicated to your goal to rise to the summit and that your family and the people closest to you support you. When success comes, others start supporting you as well, more and more people start encouraging you, believing in you, expecting you to give your best, so soon you find you simply don’t want to slow down or back away.

You are known for your belief that nothing is impossible and you are a living proof of that. In Serbia, however, people often seem to give up easily. How does one motivate oneself to keep trying even when nothing seems right? Have you your-self ever come close to giving up? You must believe in yourself, in what you do. It is important to be surrounded by people who will guide you and give you the strength when you need it, and

not to pay too much attention to what others say or think. It is important to stay focused on the goal and rise to face the challenges encountered on the way. That, of course, is not an easy thing to do. I myself nearly gave up several times. In 2010 I even considered leaving tennis altogether. I kept asking myself if I was able to outdo Federer and Nadal; the pressure was huge, be-cause I had failed many times playing with them. I knew, however, that I had to beat them. Luckily, I succeeded.

How did Serbia winning the Davis Cup help boost your self-confidence and energy on your way to the top?

In fact, that victory marked a turn-ing point in my career and helped me overcome the crisis I have mentioned. The 2010 title is one of the nicest things that has happened to me since I started playing tennis. We celebrated before 20,000 fans that day, the emotions were really special, unforgettable and beauti-ful. That trophy meant a lot to me; it gave me the inner strength so, carried by that success, I embarked on the 2011 season and everything that followed.

What does playing for the nation-al team mean to you, even when you are the world number one tennis player?

It is an honour to represent my country through sports. I carry Serbia in my

NIS has sponsored the Serbian Tennis Association for years and was with our team when they won the famous Salad Bowl. How important is it that large, socially responsible companies help Serbian sports, which have not been invested in for decades? To my knowledge, NIS has always invested heavily into Serbian tennis through sponsoring the Serbian Tennis Association (STA) and I’m sure that without your support many things wouldn’t function well. I’d like to thank you immensely for that and I hope other companies will follow your example and assist in proportion to their capabilities. Sponsoring sports is a sound investment in a nation's health, children and role models which every-one can benefit from.

What strategy does Serbia need for investing into sports and youth development?

In tennis specifically, I would like to see a national tennis centre and a system in place which would develop new talents and players. That is the basis we need so as to achieve success in the long run. Unfortunately, we don’t have the NTC yet but once it is established, hopefully in the near future, we will be able to create the conditions for all young talents to be able to have a home, a base, a centre

to train in, rest and hang out. I remem-ber when I was 12 or 13, Serbia was at war and tennis wasn’t too popular, unfortunately. I had to go to Germany, to Nikola Pilić's Academy. I remember how much that sense of belonging and growing up in a group has helped me in my career later on. That is what we need, a collective identity in indivi-dual sports. Parents cannot carry the burden of their children's careers for long, as has been the case. That is not a key to success. We need to set up a viable system.

Tennis is an individual sport. However, you are known for your tight-knit team of people accompa-nying you for years, with whom you are rather close, just as you are with your family. How important is team work for you and how can a strong team and the support from the fam-ily contribute to a tennis player's success?

I am so lucky to have around me the people who wish the best for me, who are sincere and who I care for so much. They help me stay on the right track and support me in what I do. That is so rare these days because unlike those who focus on invest-ing their energy into their own goals, my friends are focused on me. That is why all of my accomplishments are not only my personal success but theirs as well, to a large extent.

To my knowledge, NIS has always invested

heavily into Serbian tennis through sponsoring the

Serbian Tennis Association (STA) and I’m sure that without your support many things wouldn’t

function well. I’d like to thank you immensely

for that and I hope other companies will follow your

example

heart, and that is not a cliché - it has a special and deepest meaning for me. The more so if you are among the world’s best tennis players, because you are constantly in the spotlight and scrutinized much more than earlier. This is why I try to represent my coun-try and myself in the most appropri-ate way, which was not the case in the past, unfortunately. Serbia had its share of tough times in the economy, politics, and even in sports. That is why every athlete needs to represent it in the best manner, showing the world that sport can influence individuals and bring about positive changes in every sense and that not everything is as bad as the foreign media report.

What was your role in influenc-ing top tennis players to turn to their countries and play for na-tional teams? Do you believe that you helped raise the Davis Cup standard?

Each of my colleagues makes their own decisions regarding what's best for their professional career and when to play the Davis Cup tournament. I know them all quite well, those are my friends and I must point out that all of them are fantastic guys, top professionals, but patriots as well. They are all very keen to bring joy to their nation and play for Serbia’s team whenever possible, just like me. With such attitude we certainly helped build up a strong team and raise the quality of the Davis Cup, as you suggested.

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Is rivalry intense in tennis? Do you find it easier to communicate with the junior or senior rivals? Rivalry is really intense, but we all respect each other deeply and have a rather good relationship off court. We don't let the competitive drive affect our relationships privately, which is not an easy thing to do at times. The seniors among us, so to speak, have been facing such challenges for years now and we’ve got used to what life of a professional tennis player brings, so we try to pass on some of that experience to younger generations to make it easier for them. Personally, I have equally good com-munication with Federer and Nadal, with the Bryan brothers, with Dimitrov, Nishikori and others. Sound and normal relationships are based as much on sincerity as on mutual respect.

Do you intend to stay in tennis after your career of an active player is over?

I see myself as part of the efforts to de-velop Serbian tennis. I’m not sure what my official role will be, but I will try to help young players even more than I do now. Though I am very busy during the season, I always find the time to train with some of our talents, to talk to them and hear their opinion. I will be able to seriously devote myself to it after my professional career.

to Serbia whenever I can and enjoy the beauty of our country. I have nothing to hide; apart from Belgrade, Kopaonik is where I feel most comfortable. I have such fond memories of this mountain, and the nature is fantastic both in summer and winter. I try to discover the beauties of other places as well and there are plenty of such places throughout Serbia. Every time I see and find something new, some new place, and I’m glad for that.

for top sports players, proper diet is very important. What do you eat? Do you have a nutritionist and what is your favourite food?

I like pasta and eat it almost on a daily basis, following the gluten diet, of course. I drink rice milk in the morning; generally, I eat a lot of rice, white fish and chicken. That is what I must eat, but luckily it’s the food I like. My mother

makes the best pancakes in the world and I often get a craving for them.

What is your message to young athletes? What is the key to success?

I'm often asked about the recipe and the secret of success, but frankly there’s nothing special to say. Young athletes should keep things simple; avoid complicating things and falling under pressure. Also, a lot of pieces need to come together. The process of growing up and gaining experience is crucial, as well as understanding what to do on and off court, learning about the sport itself as much as possible, acquiring the skills and knowledge needed for maximum improvement. Confidence and self-assur-ance are equally important, but success always comes from having a firm charac-ter. It is important to be mentally strong and constantly strive for improvement, for being the best.

It is important to stay focused on the goaland rise to the challenges encountered on the way.

In 2010 I even considered leaving tennis altogether. I kept asking myself if I was able to outdo Federer and Nadal; the pressure was

huge, because I had failed many times playing with them. I knew, however, that I had to beat them.

Luckily, I succeeded

You travel a lot. Where do you like to travel most and what are your favourite places in Serbia?

Unfortunately, I don't have much free time over the year, but I like to come

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Balkantrafik

festival of Balkan art

Balkan Art Festival, held for the eighth time in Brussels is one of the major European events. Traditionally, each

spring, the Balkan Trafik brings together people from all over Europe by offering a wide array of music and movies from our region. It takes place in the most famous

cultural center of Brussels, the BOZAR Palace

their first appearances, while the focus of the festival was on Roma music and original Balkan jazz.

The 3rd day of the Festival was closed at dawn featuring the winners of "Guca 2013", the Kristijan Azirovic Brass Band, in concert.

This was the second year in a row that NIS has sponsored the event, hosting the greatest stars of South East Europe.

The opening ceremony was in Greek-Blues style, spiced up by the concert featuring Yorgos Dalaras, the legendary Rembetiko performer. One of the most visited festival appearances was made by “Les Femmes des Balkans”, namely the concert featuring Bilja Krstic, Amira Medunjanin and Tamara Obrovac, each performing traditional music from their own countries, Serbia, Bosnia and Herzegovina and Croatia respectively, accompanied by Serbian French jazz pianist Bojan Zulfikarpasic and his orchestra. Numerous visitors were delighted at this fusion of ethno and jazz music.

Visitors had the opportunity to experi-ence the Queen of Roma music from Macedonia, Esma Redzepova, perform-ing live with her 17 member-band Amazing Roma, as well as Johnny Iliev from Bulgaria, and Romanian band Ma-hala Rai. This year the festival hosted Ukrainian and Polish groups making

This year, from 1st to 4th May, the BOZAR Centre for Fine Arts (Palais des Beaux-Arts/Paleis voor Schone Kunsten) in Brussels was a temple of entertain-ment for more than 7,000 people who had gathered from all over Europe and beyond to hear the sounds of the Balkans, watch movies from these areas and participate in debates, as well as to enjoy the authentic tastes of wine, beer and a variety of food from the Balkans.

This year’s Festival of Southeast Euro-pean music, film and culture hosted more than 200 artists from Serbia, Macedonia, Bosnia and Herzegovina, Romania, Albania, Bulgaria, and Greece, including Turkey, Moldova, Ukraine and more..

The Balkan Trafik is rejoiced by everone - the generation gaps and contempo-rary geographical determinants seem to vanish for a few days blending into the perfect fusion of the European heritage. Performers from all over the region are eager to perform at this famous festival, whereas Serbian performers such as Bora Dugic, Goran Bregovic, KAL have been welcomed as dear guests of the festival for a number of years now. Folk-lore ensembles also take place at the festival, and the sight of them dancing kolo around the corridors of the BOZAR Palace together with senior representa-tives of the European institutions is not a rarely seen one.

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Serbian Wine Tasting with NISPrior to the performance of “Les Femmes des Balkans”, NIS hosted a Serbian wine tasting party for the Ambassador of the Permanent Mission of the Republic of Serbia to the EU, as well as representatives from the Embassy of Serbia, Belgium and representatives of the European Parliament and the European Commission. NIS is the first local company to set up a Repre-sentative Office for cooperation with the European Union in-stitutions for the sake of contributing to the rapid inclusion of Serbia into the European single market and boosting its growth within the energy sector. Aside from Serbia, the company has expanded its operations to Bulgaria, Romania and Bosnia and Herzegovina, from where the most eminent artists came to perform at this year's Brussels Festival.

Contrast Fans should visit the Balkan Trafik by all means, and witness the

rising of the very core of the heart of the city, embodied in the BOZAR

Palace, from a seemingly administrative and uniformed environment. Time is suddenly not measured in hours and minutes, but by beats of the melodies familiar to the Balkan music admirers

The Balkan Trafik Festival is a collage of Southeast Euro-pean cultures, giving visitors the perfect opportunity to taste food and drink in an authentically stylized Istanbul Mehana or a Greek Rembetiko Kafe, while enjoying the music and folklore.

Brussels itself is a multicultural city, a melting pot welcom-ing people from different nationalities, primarily owing to the numerous representatives of EU countries employed at the headquarters of the European Commission, the Council of the European Union and the European Parliament, as well as other European institutions, so it comes as no surprise that the cultural exchange-oriented Balkan Trafik Festival was well-received. The audience seemed to be diverse, the most numerous visitors coming from the Balkan Diaspora, but there were also locals born in Brussels who came, as well as many people from other continents.

Twenty-year-old Julien from Montreal came to the Festival on the recommendation of a friend from Brussels she is staying with.

Acoustic Labyrinth The BOZAR Palace was designed by the famous Belgian ar-chitect, Victor Horta in such a way that on the outside, Bozar tends to be quite inconspicuous, but on the inside it resem-bles a maze of acoustic halls, exhibition rooms and intimate cocktail reception rooms. Today’s Bozar hosts world’s best known performers including artists and orchestras from all over the world; there’s even a Royal Gallery with a VIP seat in its largest hall, and this is exactly where Barack Obama deliv-ered his speech during his last visit to Brussels back in March. Rumour has it that throughout the year, the Bozar is shrouded in a pretty uptight atmosphere ... until the veil gets torn by the Balkan Trafik.

“I came here to listen to the music. I’m not familiar with folk mu-sic or with any other Balkan music, I do not listen to it, generally speaking, but I like the music. A friend who was here earlier told me to be sure not to miss it. I like the atmosphere, the food, the people. I would like to come again next year” - says Julien.

Her friend, 22-year-old Kroa, also from Quebec is at the Bal-kan Trafik Fastival for the second time.

“I like Balkan music very much. I'm a big fan of Emir Kusturica films. I’m familiar with the history of Yugoslavia, which I find quite interesting. I've been to Croatia a few times, and Slovenia, made some friends there and was introduced to the culture of your region”

Organizers emphasize that throughout the year they travel around the Balkan countries in search of the most repre-sentative national artists to perform at the BOZAR Center. At the same time, national does not necessarily mean tradi-tional. BOZAR featured ethno jazz and ethno rock, whereas

a massive electronic party closed the four-day festival, since all of these make up the Balkans, and the people visiting the festival must be able to feel the richness and diversity of the region’s culture.

The Southeast European culture comes to life in Brussels owing to the Balkan Trafik which is truly a scrapbook of the Balkan Peninsula; cherishing traditional and modern cultural aspirations of the countries that share a common history. The fusion of the Austro-Hungarian and Ottoman style in music, film, gourmet specialities, as well as in other aspects of daily life, the Balkan Trafik prides itself on, keeps delighting its loyal visitors over and over again.

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an open air MuseuM

Plovdiv

"The City of the Seven Hills"is extremely important economic and

cultural center of Bulgaria. Having been conquered in past by many emperors,

today, due to its rich heritage, it’s conquered by throngs of tourists. The number of visitors has increased by

seven percent in last year only

Vesna Lapčić

The second most important city in Bulgaria, Plovdiv, has a six-millennium long history. It is the oldest settlements in Bulgaria and an open air museum of sorts, with a rich heritage of antiquities and monuments of the ancient past to the pres-ent days. It used to lean on seven hills – “tepetas”, and although there are only six of them today, Bulgarians still call it “the City of the Seven Hills” and they are an inseparable part of the city’s history. As the Mayor Milkov Chomakov says, the hills are the source of confidence for the people of the city, but they also give them the sense of responsibility and duty. The people of this town, which has over 365,000 inhabitants, according to the Mayor, are in love with the spirit of their Plovdiv, which is embodied in mutual understanding, support and respect.

The number of tourists in this town increased by seven per cent in the last year compared to the year before, reaching the number of 14.261, according to the National Statistical Institute data. The number of individual visits to museums, which this city is abundant in, increased by five percent in the same period. Seven-year strategy for the development of Plovdiv’s tourism from 2014 to 2020 is based on using all that the city has to offer, cultural heritage, history and nature, in order to attract even more tourists. The strategy includes promotions of various public events, wine tours, sports and convention tourism primarily intended for business guests. Tourism workers have already prepared two packages which they will offer to tour operators to include in their offer.

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THE OLD TOWNPlovdiv is now divided into two parts - the Old Town, which is located on three eastern hills (Dzhambazova Hill, Nebet Hill and Taksim Hill) and the Lower Town which extends in the plain below the town. The ancient part is a complete architec-tural entity that has preserved the atmosphere of the Bulgarian Revival whereas the modern Plovdiv - which offers fun and exciting experience – is a tourist and cultural center.

One of the oldest cities in Europe, situated on the banks of the Maritsa River, Plovdiv was held by Philip of Macedonia, and then it became a part of the Roman Empire. A number of well-pre-served artifacts have remained from that time such as cobbled streets, old walls, buildings, water and sewage systems. During the Roman Empire it became an important regional center that remains to this day recognized by its International Fair and the International Theater Festival “Scene on the Crossroads”.

The old part of the town houses the remains of a Roman sta-dium and ruins of a Forum, but there you several mosques and an original Turkish bath can also be seen. The most remarkable Philippopolis legacy from the time of Roman administration – the amphitheater used to be adorned with lavishly decorated floors, usually with large mozaic compositions. With its amaz-ing size - 240 meters long and 50 meters wide, the Philippopolis Stadium used to receive 30,000 visitors. This rich Roman legacy is on the UNESCO's World Heritage List.

The old part of Plovdiv actually has a long history - from the Thracian fortification built by Macedonian builders, surrounded by Byzantine walls and beautiful colorful houses, framed by massive beams, painted in brick red, yellow and beige, built in the style of Bulgarian national revival, symbolically look on abandoned mosques and small craft shops of the Lower Town.

Plovdiv is now divided into two parts - the Old Town, which is located in the

three eastern hills (Dzhambazova, Nebet and Taksim hills) and the Lower Town

which extends in the plain below the city

The oldest preserved examples of Plovdiv’s houses built in this architectural style originate from the mid to late 18th century. The houses are not large, with asymmetric bases and two floors, vibrant facades which are broken by windows on enclosed bal-conies, which protrude above the street, with open porches on the ground floor and verandas with wooden poles that overlook the courtyard. This first type of Plovdiv’s residential houses is built of dilapidated timber on solid stone foundations, which was a feature of the construction period of the Bulgarian revival.

This city is also known for its mosaics, the oldest dating back to the 2nd century, but most mosaics date from the 4th and 5th centuries.

THROUGH HISTORYThe city was returned to Bulgaria during the reign of Khan Malamir (who reigned from 831 to 836). Over the centuries, the town was ruled by either Bulgaria and Byzantium. Plovdiv was briefly even taken by the knights of the Fourth Crusade, and it finally became a part of the Bulgarian state in 1344.

In 1364 army of the Ottoman Empire attacked and gradually con-quered Bulgaria, taking the town in a new direction in terms of its development. Byzantine architecture was replaced by new buildings with typical oriental characteristics. The town was renamed to Filibe.

During Bulgaria’s recovery (18th and 19th century), Plovdiv was a major economic center. It was inhabited by many rich and ed-

ucated people who traveled Europe and brought new cultural trends. Wealthy merchants showed their wealth through the construction of beautiful and richly decorated houses. Unlike brick houses built at the beginning of the Bulgarian recovery, which were small and practi-cal, the art of construction later devel-oped with more imagination, focusing on size, splendour and detail. In addition to being a center of architecture, the city was an important cultural center and made a significant contribution to the spiritual awakening of Bulgaria. Plovdiv was of great importance in the struggle for independence of the church.

The town was liberated on 16 January 1878 after the war between Russia and Turkey. The long-awaited St. Stephen Peace Treaty, signed on 3 March 3 1878, led to the establishment of the free Bul-garian state. However, several months

TreasuryArchaeological Museum Plovdiv has one of the richest collections of 100,000 exhibits that reflect the history of Plovdiv and the environment and heritage of the biggest and most famous ancient city in the Balkans. Ethno-graphic Museum Plovdiv is located in the original house from the Bulgarian national revival period in Old Plovdiv; it belongs to the protected cultural heritage of Bulgaria and is one of the most interesting museums in Bulgaria. Its exhibitions are displayed in a beautiful house, which is a good example of the Bulgarian Baroque architecture from the period of national awakening (recovery). It was built in 1847, and the main facade of the house faces the west - a spacious and nicely landscaped garden.

later, the Berlin Peace Treaty obscured the joy of liberalization and splintered the country into several small parts, and large border areas were given to neighboring countries. Bulgaria became a small, weak principality. Plovdiv re-mained within the autonomous province of Eastern Rumelia, which was under the Ottoman rule, and was chosen to be its capital. This dramatic period of separa-tion lasted for seven years. During this period massive construction contin-ued. Many new modern administrative buildings were built for the new capital. Meanwhile, a specially appointed com-mittee prepared the coming uprising, which was supposed to result in the merger of separate regions of Bulgaria. The city was captured on 6 September 1885 and Eastern Rumelia was again annexed to the Principality of Bulgaria. This date marked the beginning of a new history of the country and is celebrated every year as Plovdiv’s memorial day and an official holiday.

OASIS Of SPORTS AND RECREATIONIn addition to its cultural attractions, the city offers very good conditions for sports and recreation. At one end of the

town there is an Olympic-sized rowing base, which offers excellent conditions for rowing, running and cycling. As we have mentioned, in the past Plovdiv had seven hills six of which still stand today. Marko’s Hill was turned into a pave-ment for the cobblestone streets. Those who choose to count the hills of Plovdiv should remember that the elevation of the Old (Ancient) Plovdiv consists of three hills.

Dzendem Hill, also known as the Hill of Youth, is the highest and was declared a protected area because of its endemic plants and preserved nature. A variety of animal species may be found there, such as squirrels, rabbits and jackdaws. Monu-ment in honor of the Soviet Army was built on the Bunardžik Hill (Alyosha). Sa-hat Hill (sahat – clock, tur.), with a clock tower, has become a park, a favorite place for couples and young people with guitars. The clock tower, which dates from the 16th century, stands on top of a hill. All the hills of Plovdiv are well main-tained parks with paths and benches.

The city is one of the most popular tour-ist destinations in the country and the cultural and economic center of south-ern Bulgaria. In the city there are many options for accommodation, from luxury hotels to hostels. The town’s main street offers excellent opportunities for shop-ping and entertainment, and abounds in restaurants.

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