Oil refinery in Smederevo in three years – Dutch "Comico Overseas" announced construction of unit worth 250m USD

Source: Politika Thursday, 01.01.1970. 19:39
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Providing that all items from the Memorandum of understanding, which was signed between Mayor of Smederevo, Predrag Umičević, and Dutch company "Comico Overseas" shortly before New Year’s holidays, are met, a state-of-the-arts refinery for production of gasoline, euro-diesel and aviation fuel will be built within next three years at about 80 ha in a part of Industrial zone, in the vicinity of Smederevo–Kovin bridge.

In that case, Smederevo would become a dominant point wherefrom aforementioned derivatives would be sent not only to Serbian, but also to Croatian and Macedonian market. Being worth about 250m USD, it would represent the largest greenfield investment in Serbia. Completion of the refinery within 36 months would infuse about 4.5m USD into the city budget thanks to taxes and donations. The refinery would directly hire between 300 and 500 people, while up to 3,000 citizens of Smederevo would be indirectly hired.

This city would get another big exporter and, according to the new law on local incomes, once the refinery is put in operation, the city will be collecting over 1m USD worth of ecological taxes a year. According to the pricelist in effect, 99-year rent for parcel at 80 ha amounts to nearly 1m USD, while the fee for construction amounts to approximately 400,000 USD.

– I think that we’ve done a great thing for Smederevo, as well as for Serbia, which is going to be proved in practice. When we received the letter of intent from that company last summer, it was clear to us that Smederevo was the ideal location for them because it lies on river Corridor 7 and railway Corridor 10, which is a necessary precondition for transportation of goods from the refinery to end-users. Especially when we know that the product pipeline from Novi Sad to Niš, via Pančevo, Smederevo and Jagodina, will be developed in order to reduce transportation of oil derivatives in cisterns, that is, by road. That will be the refinery equipped with up-to-date technology, and the investors assure us that, once the production in that refinery starts, refineries in Croatia and Bulgaria, maybe even in Serbia, will stop working because the technologies they use are old and they can not produce the fuel of "euro-8" and "euro-10" quality, says Predrag Umičević who signed the Memorandum of understanding after the Government of Serbia, the Ministry of Energy and the City Council in Smederevo gave their consents.

The majority of citizens of Smederevo received this news in fear of possible ecological consequences. However, according to the words of the Mayor, local self-government set environment protection as the primary condition for construction of oil refinery in Smederevo.

(Predrag Umičević)

– We are going to be very strict host when it comes to all ecological requirements that we set as an imperative since we already have a company that pollutes environment. There is no reason for worry since the vacuum oil distillation that will be used is environment-friendly. It is a closed system, like in an automobile, which means that it does not pollute air, water and earth. Our obligation is to protect environment and we will do that at any price, and the investors assure us that all ecological requests will be respected – Umičević claims.

Local self-government and authorized government organs are to provide necessary documentation in the following months. Once all the documents are collected, "Comico Overseas" will present preliminary solution for the factory and that is when the contract should be signed. That will be preceded by the design of detailed regulation plan and its adoption in local parliament, which will define the terms of future partnership more precisely. If everything goes as planned, the construction should start in 2010, while the completion of works should be expected in 2012.

According to Umičević, Serbia’s refineries have capacities to produce about 35% of euro-diesel, while the rest is imported. Future refinery in Smederevo, with the capacity of 4,000 tons a day, will satisfy domestic needs, while part of production may even be exported, which represents a great opportunity for our country.

"Comico Overseas" is the consortium made of three US companies and registered in Netherlands. One of them is a financial corporation that will use its own funds and part of funds from the loan approved by European Investment Bank to finance construction of the refinery. The second company deals with production of equipment for refineries, while the third company owns oil borings in Nigeria.

Serbia-based daughter company of "Comico Overseas" is "Comico oil" with the headquarters in Belgrade.

Local authorities will insist that the headquarters of that company be moved to Smederevo in order for complete incomes and turnover to be realized through the city where the refinery is situated.

(Note: the complete text is taken from newspaper Politika of January 10, 2009)

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