INA could abandon arbitration if the FBiH Government cedes its shares in Energopetrol

A delegation from Zagreb-based INA is expected to arrive in Sarajevo next week to continue negotiations regarding the purchase of government shares in Energopetrol, the largest oil company in Bosnia and Herzegovina, writes Patria.
Currently, the majority owner of Energopetrol is the Croatian oil company INA, with 67 percent of shares, the FBiH Government holds 22 percent of shares, and 11 percent of shares are owned by small shareholders.

INA recently requested to purchase shares from the FBiH Government and small shareholders, which would make them a 100 percent owner of Energopetrol. The FBiH Government did not agree to the sale at the time. Small shareholders also did not agree to the sale. However, a second round of negotiations has now begun.

Did INA 'blackmail' the FBiH Government with arbitration?

The Croatian-Hungarian oil consortium INA-MOL sued the FBiH Government before an arbitration court in France several years ago (at the time, the Hungarian oil giant MOL also held shares in Energopetrol). The consortium did not want to take over the obligations towards Energopetrol employees that arose in the period before 2006, i.e., before this consortium entered Energopetrol. This concerns employee claims exceeding 60 million KM. INA claims that these claims were not part of the contract when they took over shares in Energopetrol in 2006, so the entire case ended up in court.

The FBiH Government now claims to have reached an agreement with INA regarding the arbitration. INA, they claim, will withdraw the arbitration, meaning they will agree to pay the obligations of around 60 million KM to the employees. The government does not explain what the government will give to INA in return. Nor does it explain how INA was even given the opportunity for arbitration.

When asked by Patria, INA neither confirmed nor denied the information about withdrawing the arbitration.

As things stand, it is increasingly likely that INA will indeed abandon arbitration, but they might ask the FBiH Government to sell them their package of shares in Energopetrol. In this way, INA will acquire the desired package of shares in Energopetrol, and the government will boast about saving the Federation from a multi-million burden. It is increasingly likely that INA initiated the arbitration precisely to be able to blackmail the FBiH Government.   

- We think INA has kept the arbitration 'alive' all along, so they could force the government to sell them their package of shares. The price of around 60 million KM that INA would acknowledge to them is not much compared to the power they would gain in Energopetrol if they took over the government's package of shares – claims Patria's source from Energopetrol.

- Ultimately, INA would recoup that money very quickly through its operations in FBiH – adds this source.

INA is the largest individual distributor of petroleum products in BiH. It owns more than 100 retail gas stations. By purchasing the government's shares and the shares of small shareholders, INA is essentially buying absolute control in Energopetrol, writes Patria.