Comico Oil, the Serbian unit of U.S.-Dutch Comico Overseas, won approval from the city of Smederevo, some 40 kilometers (25 miles) southeast of Belgrade, to lease land where it wants to build a $250 million refinery.
The municipal assembly agreed today to lease a 113-hectares (280 acres) plot for 652 million dinars ($7.7 million) for 99 years, Brance Stojanovic, assembly president, said in a phone interview from Smederevo today. Comico Oil will pay for the lease upfront, pledging to employ at least 540 workers and to meet environmental safety requirements, he said.
“We expect that the lease contract will be signed soon, after which Comico can proceed with obtaining construction and other necessary permits,” Stojanovic said. Comico Oil’s Serbian representative, Radivoje Radivojevic, was not immediately available for comment.
The new refinery, with planned output capacity of as much as 100,000 barrels of crude a day, would end the monopoly of Naftna Industrija Srbije AD (NIIS), Serbia’s top oil company, controlled by OAO Gazprom Neft. (GAZP) Naftna Industrija owns both Serbian refineries, in Pancevo and in Novi Sad.
The agreement came after more than three years of negotiations between Comico and Smederevo. The city lost a big foreign investor earlier this year when U.S. Steel Corp. (X) sold an unprofitable steel mill there back to the government for $1.
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