18:14 04.03.2013

LUKOIL signs deal to sell Odesa refinery

2 min read
LUKOIL signs deal to sell Odesa refinery

LUKOIL and VETEK Group have signed an agreement on the purchase and sale of the public joint-stock company PAO LUKOIL - Odesa Refinery, LUKOIL said in a statement.

As a result of the transaction, VETEK Group will acquire 99.6% of the refinery's stock. The deal is expected to be closed before June 1, 2013, after the parties fulfill a number of preliminary conditions.

The decision to sell the assets was taken by LUKOIL within an approved plan of international refining assets restructuring.

The Odesa facility can refine 2.8 million tonnes of crude oil per year. The plant was shut down in October of 2010 due to the economic situation that had developed on the oil-product market in Ukraine, and also due to changes in the oil delivery scheme.

LUKOIL'S management has discussed more than once with the Ukrainian government getting technical barriers to the start-up of its Odesa refinery out of the way.

Last fall, the Gaz Ukraina group of companies battled to buy Lysychansk oil refinery, but TNK-BP, which owned it, decided to wait on selling it, as it was in the process of being absorbed by Rosneft.

Gaz Ukraina trades in liquefied and natural gas, oil products, and trades for the oil and gas sector. It controls some 150 filling stations in all regions of the country. Its corporate management center is LLC Gaz Ukraina 2009 of Simferopol. The state company's main shareholder is Serhiy Kurchenko, who has recently announced that he would merge his energy assets into VETEK.

Ukrainian Energy and Coal Industry Minister Eduard Stavytsky said at the end of February that the Odesa refinery might resume operations in March.

The operator of Ukraine's oil transport system Ukrtransnafta said it was prepared to transport crude to the refinery, but via the Pivdenny maritime oil terminal.

According to experts, oil deliveries through that terminal make its refining at the Odesa facility unprofitable.

Ukrainian oil and gas refineries processed half as much crude oil last year as in 2011, to 4.57 million tonnes. Only one of six oil refineries in the country is actually operating, Kremenchuk oil refinery (Ukrtatnafta).

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