Between competition and responsibility

EPA

Johannes Hahn (L), European Commissioner for European Neighbourhood Policy and Enlargement Negotiations, and Serbian Prime Minister Aleksandar Vucic (R) attend a session of the Serbian Government in Belgrade, Serbia, 10 September 2016.

Between competition and responsibility


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This article is part of New Europe’s: Our World in 2017

Belgium – Brussels – The history of the oil industry has certainly seen periods of greater volatility than those experienced over the last couple of years, but for today’s generation of managers the 2014-2016 oil price plunge, coupled with other externalities, will have been one of the most challenging times in their careers. The challenge is all the more evident for companies like NIS, operating in regions that are still struggling to sustain economic development, such as the Western Balkans. With our headquarters in Serbia, an EU candidate country, and operations in every South East European country, NIS also has to adhere to EU energy policies. Moreover, COP21 made it clear that oil and gas companies cannot continue to work in the same manner as they have done over the past century: the world expects a proactive approach from industry to ensure both profitability and a strong sense of responsibility towards society and the future. As a result, we, as industry must strive to sustain the economies and communities within which we operate, to inspire growth, innovation and hope.

Today’s integrated energy companies are often huge organisations that employ thousands of people and provide substantial contributions to state budgets. As such they bear a colossal responsibility towards their shareholders and to society. Moreover, energy companies are the backbone of their home and host economies, especially in developing countries.

That is why NIS chose not to rely on the traditional industry modus operandi when the oil prices go down – to reduce headcount for the sake of profitability.

The truth is that only constant improvements and complex approaches to problem solving can keep you adapted to the changing environment and ensure quick transformation and growth in challenging circumstances. So in a situation where we had to choose between staying competitive and taking our responsibilities seriously, we decided to take the road less travelled. NIS management and employees joined together to came up with a multifaceted, long term programme of operational efficiency and streamlined performance by focusing on culture and motivation.

Our employees came up with over 2000 ideas to save money and energy, and thanks to them 2016 was the third year in a row that NIS managed to deliver positive results.

Most traditional oil and gas companies were inspired by COP 21 to take action and transform their energy holdings. We did so back in 2011, when we established the unit for energy efficiency, heat and power generation, and trade. Since then we produce one third of our electricity consumption needs and have increased our energy efficiency by 25%. These measures have enabled us to maintain our investments in new projects, so that in 2017 we will continue developing two major Serbian projects: a wind park and a combined heat power plant.

Further modernisation of our refinery will also provide cleaner fuels for Balkan citizens. This contribution to the Western Balkans clean energy agenda is even more important if we take a look at the regional context.

The Balkans have a lower level of economic development and as a result consumption of energy per capita is 43% lower than in the EU, while energy intensity in the Western Balkans is 6 times higher than that of the EU.

Serbia’s path towards EU accession has required a massive overhaul of the local legal system as part of the harmonization process with the EU Acquis – and the job is far from being over. NIS is the only company in Serbia that has a dedicated unit following the EU energy and environment agenda, in Belgrade and Brussels.

With such volatile markets and a high level of responsibility towards society, we need to be proactive and analyse our upcoming obligations in order to be able to make sound business decisions. Energy companies have to lead the way in this field – we announced 2016 to be a year of Health, Security and Environment and adapted company standards beyond legal obligations. Oil companies are not what they used to be and that is good news.

Recently I was present at a Brussels’ conference dedicated to the Balkans where I heard some gloomy messages and feelings about the region’s current state of affairs. However, we shouldn’t forget that the Balkans hold untapped potential for business development. Our counterparts are usually astonished when they see that Serbia has an Amine Treating Plant for CO₂ extraction from natural gas, using state of the art Carbon Capture and Storage technologies – a rare project to find in Europe. Young Serbs are aware of their country’s potential too.

Every year, more and more young people want to return to Serbia after their education in more developed countries – to see if they can create their own success by building their own country.

Although Serbia has enormous energy potential, talented and creative people are the Balkans’ competitive advantage in shaping the future. If you cannot travel to the Balkans, we invite you to join us at the Balkan Trafik festival in Brussels in April 2017 and see it yourself.

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