INTERVIEW-Serb oil monopoly NIS needs 2 bln eur investment

By Zoran Radosavljevic

BLED, Slovenia, Sept 1 (Reuters) - Serbia's oil monopoly NIS needs an investment of up to two billion euros in the next three years to be able to compete with big oil companies after market liberalisation, an executive said on Monday.

Unless there is more investment, the company will not be able to reach the European Union standards for the fuel it refines and will lose market share, said Predrag Stanojevic, a special advisor to the management of NIS.

"In short, it is 'modernise or die'," he told Reuters in an interview on the sidelines of an energy conference.

Russia's Gazprom Neft (SIBN.MM), will take over a majority stake in NIS as a part of the wider deal signed in January that included Serbia in Gazprom's South Stream pipeline.

It agreed to pay 400 million euros for 51 percent stake in NIS and pledged another 500 million in investment by 2012.

"The bottom line is, we must open the market in two or three years, about the same time we need to build new facilities for producing European quality petrol," Stanojevic said.

"Serbia must open the market in 2010, or perhaps prolong it for a year," Stanojevic said, adding that NIS needs to invest between one and two billion euros in modernising its outdated facilities.

NIS, the last of the state owned oil firms in the Balkans to be sold, was given a refining monopoly until 2010 to allow it to recover from the 1999 NATO bombing that hit its main refinery.