Ukraine`s PM says new management at refinery soon

15:11, 19 March 2008
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Russian shareholder Tatneft wants to take the case to an international court

Ukraine will soon appoint new management to the country`s largest refinery, in dispute with Russian shareholder and oil supplier Tatneft, which has cut deliveries since October, Prime Minister Yulia Tymoshenko said, according to Reuters.

Tatneft objects to the current manager, who took over last year after a court ruling, and says it is owed hundreds of millions of dollars in unpaid bills and wants to take the case to an international arbitration court.

But it was not immediately clear whether the move, announced by Tymoshenko on Wednesday after a cabinet meeting, would placate Tatneft and restore supplies, as she promised.

"This enterprise was seized by a specific commercial entity, which has only a 1.5 percent stake. The government, which has a 62 percent stake, has neither management, nor a representative (at the refinery), nothing," Tymoshenko told journalists.

"In the coming days we will name the management and ... we will do everything so that the refinery becomes well-supplied and oil products are put on the internal market at normal prices," she said.

Tatneft disputes that Ukraine owns a 62 percent stake in Kremenchug, saying that 18 percent of that landed in government hands illegally, through a transfer of stakes belonging to two offshore firms controlled by Tatneft. The company, based in Russia`s Tatarstan region, has hired international law firm Cleary Gottlieb for its case, but a ruling may be a year away.

In the meantime, going as far as to Iraq for alternative supplies, Kremenchug has had to cut production by about 10 percent, while prices for its oil products have soared.

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