As oil tank runs dry

12:56, 21 February 2013
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The nation’s refineries on their last legs, suggests a KW article by Yuriy Savchenko.

Last year Ukrainian oil refineries hit a new low as the output collapsed twofold to 4.9 mn t. The Ministry of Energy says such a decline was due to the dramatic cut in the supplies of Russian oil. It is impossible to argue with such information: official data shows that Russia reduced oil supplies to Ukrainian plants by 6.5 times to 724.8 mn t.

Russia cannot be accused of blocking the flow of raw materials as it supplies crude in full compliance with the orders of counteragents and last spring the Lysychansk Oil Refinery zeroed its order.

Then owners of the plant – Russian-British TNK-BP Group – made the decision to stop production due to the company’s losses. Such a version is rather unconvincing taking into account that in 2011 Linik PJSC, which owned the plant, earned a net profit of UAH 110 mn. Whatever the main reason to stop production may be, it can be said that the shutdown of the Lysychansk Oil Refinery indicates that there is a crisis in Ukraine’s national oil refining industry.

Can the nation’s oil industry be salvaged after all? The author Yuriy Savchenko is trying to find the answer.

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