The Oil Refinery in Brod Offers Grass Mowing Services, Management Earns Over 100,000 KM Monthly, while Workers Face Delayed Payments!

The Oil Refinery in Brod Offers Grass Mowing Services, Management Earns Over 100,000 KM Monthly, while Workers Face Delayed Payments!

While the Brod Oil Refinery is struggling with incredibly large debts for our country, the director and his associates earn tens of thousands of marks

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While the Brod Oil Refinery is struggling with incredibly large debts for our country, the director and his associates earn tens of thousands of marks net per month, with the gross salary of director Anatoliy Karalyus amounting to around 28,000 marks, according to Infoveza portal.

Namely, it is known that just last year, the Brod Oil Refinery ended with a loss of 42.5 million KM, bringing the accumulated losses of this company to 821 million. Despite the massive losses and non-payment of taxes, the Tax Administration of Republika Srpska does not plan to block the company’s account and states in a statement to our portal that the Refinery has no outstanding debts!

“Dear Sir/Madam, in accordance with your questions, we inform you that the taxpayer AD ‘Rafinerija nafte Brod’ does not have matured and unpaid obligations for taxes and contributions, so there are no grounds for blocking the account,” said Goran Maricic, director of the Tax Administration.

During this time, just over 20,000 KM gross is earned by other executives (deputy directors) of the Refinery, so the logical question arises of how the company can even afford to pay so much money to executives, especially executives who have recorded catastrophic business results.

This is just one of the things that are questionable about the Oil Refinery, given that the Refinery has not been engaged in what it used to do and what it should be doing for a long time, but rather in completely different activities. Recall that two years after the accident that occurred in October 2018, the Refinery switched to the production of compressed natural gas, and from next year, it will also produce polymer bitumen that is delivered to the Refinery and mixed with other raw materials.

“Since the Brod Oil Refinery stopped working, a certain deficit of bitumen has formed on the market, which we have managed to close in this way. We have a stable supply, the product is of European origin, and this will meet all the market’s demands,” explained Aleksandar Ivankovic, commercial director of Optima Group at the time.

Our portal exclusively reveals that a company that is supposed to be engaged in the production/processing of energy sources has been offering grass-mowing services to the Brod municipality for quite some time, and recently it has been trying to impose itself as a company that would provide heating services to the municipality during the heating season. However, as things stand now, the Brod municipality refuses to accept these services.

The fact that the company’s management had the idea of maintaining grassy areas as far back as 2019 is confirmed by the documentation in the possession of our portal when they began buying brand new tractors and trimmers for mowing.

On the other hand, the Oil Refinery regularly pays all taxes and other obligations to the municipality, but the employees suffer as their salaries and hot meals are delayed. As of January 1, 2023, there were 473 workers, including 170 who were “on standby” and received 70% of their regular salary. For comparison, there used to be over 1400 workers.

Considering all the aforementioned and the extremely difficult financial situation in the Refinery, it is especially concerning that the Capital portal has uncovered that the owners of the “Optima Group” in Banja Luka, investors from Russia, injected 1.77 billion KM into the company through its recapitalization in less than three years (2019-2022). Although this is the largest foreign investment in Republika Srpska since its inception and an opportunity that both the government and the investors would not miss to promote, everything happened under a veil of secrecy and far from the public eye, as reported by Capital.

It seems that the institutions of Republika Srpska always remain silent when it comes to the oil sector in RS, and responsibility is shifted from one to another, and then to others. In an attempt to get any feedback, we also contacted the Ministry of Economy and Entrepreneurship, which further referred us to the Ministry of Energy and Mining, and they, in turn, referred us to the Refinery where, as usual, we were left without any comments.

Economists believe that everything related to the privatization of the oil sector in Republika Srpska is controversial.

“Everything related to the privatization of the oil sector in Republika Srpska is shrouded in secrecy, and this is because the oil sector was sold to a company that is partially Russian-owned and partially offshore ownership, meaning ownership registered in one of the ‘tax havens,’ and there is no way to determine it exactly. The situation is like this for two reasons: First, the management operates similarly to how Russian companies operate in Russia, and very little information is transparent. For example, there is no accurate information about who Refinery in Brod owes so much to,” questions economist Zoran Pavlović.

The second problem Pavlović identifies is commented on from personal experience.

“I tried to establish cooperation with them in the form of a consulting company, but despite my efforts to present the good things the company has done, they did not agree to it. This means that the company has no media access; people do not know how the company operates, what good and less good jobs they have done, etc.,” Pavlović explains.

When asked why the Refinery is not operating, or why it is not engaged in its core business but rather enters into the maintenance of grassy areas and heating of the municipality of Brod, Pavlović responds that it is probably because starting it would require serious renovations that are very expensive, so their calculation is better with them being traders rather than producers.

“On the other hand, the Optima Group, which owns Refinery Brod, has its oil refinery that operates well and makes losses, which is incomprehensible,” Pavlović points out.

It is also interesting to note the explanation that Pavlović gives for the large amount of money, i.e., the recapitalization of the Optima Group.

“I was involved in a project, and I came across various pieces of information related to ‘payment procedures on behalf of others,’ which is one variant that I think is possible. In other words, payment to suppliers to whom they were indebted was made through a specific contract system. Instead of the money being paid to Optima, it was paid to another company and only recorded in the Central Bank of Bosnia and Herzegovina. It does not have to be recorded in ministries. This is one of the possible options because in that case, there is no payment traffic or transfers within the country,” Pavlović concludes.

Whether Pavlović is correct and whether this really happened cannot be proven since both institutions and the Optima Group remain silent.

Written by: Stefan Blagić