Background Information ....................... Very shortly 600,000 bpd of oil will be avaliable by pipeline to the Black Sea.
Kazakhstan's recent moves
...AS KAZAKHSTAN'S STATE OIL COMPANY PLANS TO EXPAND
PRODUCTION, EXPORT. Nurlan Balghymbaev, who is president of
Kazakhstan's national oil company KazakhOil, told the lower
chamber of Kazakhstan's parliament on 4 December that
KazakhOil plans to increase production to 9.9 million tons in
2001, compared with an estimated 5.5 million tons this year,
Interfax reported. Kazakhstan's total oil production for the
first 10 months of 2000 was 31.86 million tons. Balghymbaev
said that much of KazakhOil's planned increase will be sold
to Ukraine for refining at the Kherson Oil refinery.
KazakhOil has stated its intention to participate both in the
privatization of that refinery and in construction of the
planned Odesa-Brody oil pipeline. Kazakhstan's Prime Minister
Qasymzhomart Toqaev, however, had publicly stated his
opposition on 16 November to KazakhOil's participation in the
former project, which he termed "not rational." Toqaev argued
that it would be more profitable to refine Kazakh oil at the
Pavlodar Oil Refinery in northern Kazakhstan. LF
DISPUTE OVER EXPORT OF KAZAKH OIL TO UKRAINE CONTINUES. The office of Kazakhstan's Minister of Energy, Industry and Trade, Vladimir Shkolnik, issued a statement on 12 December accusing Nurlan Balghymbaev, who is the president of the state oil company KazakhOil, of violating the law by refusing to make the company's transactions public, RFE/RL's Kazakh Service reported. Shkolnik also took issue with Balghymbaev's assertion in the parliament last week that the export of Kazakh crude for refining at Ukraine's Kherson oil refinery is legal. He again called for a halt to such exports. LF
Ukraine situation
UKRAINE MAY WELL DO WITHOUT IMPORT OF DIESEL FUEL, DOMESTIC PRODUCERS BELIEVE
KYIV. In their letter to President Kuchma, Prime Minister Yushchenko, and the speaker of parliament, managers of Ukraine's leading oil refineries urge them to backtrack on their promise to award tax breaks to oil products importers. If tax breaks are scrapped, the managers can guarantee that all demands of Ukraine's farmers in diesel fuel will be met by domestic oil refineries. Given the tax breaks become effective, refining oil at Ukraine's oil refineries will become a loss-making business and the owners of Ukrainian refineries will view the situation as force majeure circumstances when they will be unable to meet their investment commitments to modernize the oil refineries and supply inputs. The authors of the letter urge to cancel the provisions of the law of Jan.18, 2001 on the stimulation of Ukraine's agriindustrial complex. This law imposes ceilings on petroleum products and offers tax breaks to importers of diesel fuel for the period from Jan.1 through October 1, 2001-2004. This law has already come into effect but its controversial provisions are not applied yet by the Customs Service. In addition, the managers propose to cancel centralized import of oil products and extend privileged credits to farmers to buy domestic diesel fuel via tenders and auctions. According to the authors of the letter, the purchase of 1.4 million tons of diesel fuel on privileged terms is equivalent to the purchase of 2 million tons of oil from which 0.6 million tons of diesel fuel, 0.4 million tons of gasoline and 0.7 million tons of burner oil could be made. The letter was signed by the president of TNK-Ukrayina (LINOS oil refinery owner) Olexandr Horodetsky, general director of Lukoil-Ukrayina (owner of the Odesa Oil Refinery) Mykola Kadeniuk, the representative of Kazakhoil-Ukrayina (owner of the Kherson oil refinery) Petro Miroshnykov, and the president of Ukrtatnafta Volodymyr Matytsyn. At their press conference on March 12, the authors of the letter made public the information that, according to the 2000 Statistics committee report, consumption of diesel fuel was 4.7 million tons. Ukraine's oil refineries can produce 5 million tons of diesel fuel, the authors maintain. Last year's production was over 2.4 million tons. According to TNK-Ukrayina president Olexandr Horodetsky's assessment, LINOS alone can produce 2 million tons of diesel fuel. He thinks that losses to the state budget from the tax breaks may reach UAH 1.5 billion in 2001. Lukoil-Ukrayina deputy manager Dmytro Kryzhanivsky said that the tax breaks can lead to the closure of the Odesa Oil Refinery and personnel downsizing. As Olexandr Horodetsky stressed, even if the Ukrainian authorities turn a deaf ear to the letter, LINOS will not stop its diesel fuel production and will try to expand its exports, although selling diesel fuel in Ukraine is more profitable. In March, for instance, LINOS has plans to export 75,000 tons of diesel fuel. He also stressed that sales of diesel fuel via auctions have virtually stopped since the law came into force, as buyers preferred to take wait-and-see positions expecting to buy imported diesel fuel at lower prices. The price on diesel fuel is going down with each auction, dropping to UAH 165 per ton at the last auction. Further drops in prices on diesel fuel are inadmissable for oil refineries will then be forced to operate at a loss. Deputy Minister of Economics Olexandr Shlapak said at the press conference on March 12 that the ministry has prepared a draft law cancelling ceiling prices and seasonal tax breaks for diesel fuel importers. The draft is to be considered by the Cabinet at its March 14 session, he said. But the government is far from unanimous in supporting these measures, he added. The official assumed that the government will support the draft law in package with other measures aimed to resolve the problems related to the payment of excises on fuel by domestic oil producers. According to Olexandr Shlapak, in January of 2001 domestic oil producers paid only 30% of excises
[ April 10, 2001 13:22 ]
On April 7, there was a shareholders meeting at Kherson Oil Refinery (HNPK). The meeting reduced the Supervisory Board to two members down from seven, keeping only representatives of Kazakhstan's Kazakhoil, which holds 60% in the plant, on the board. |
