Russia's Tatneft Suspends Oil To Ukraine Refinery

MOSCOW, Russia -- Russian oil firm Tatneft has suspended oil supplies to Ukraine's Kremenchug refinery pending a resolution of a dispute between different management groups, sources close to the firm said on Friday.

Russian Tatneft oil well

"The conflict around the plant's ownership has been going on for some years. As of today we are suspending supplies and will wait until the situation with the plant's management becomes more clear," the source said.

Ukraine has a total of seven refineries, but only three of them are getting regular supplies of Russian crude and one from Kazakhstan.

The plant processes 180,000 barrels per day of Russian crude which is supplied by different Russian companies. But all supplies are coordinated by Tatneft, a 500,000 barrels per day producer.

"No one from Russia is supplying crude to Kremenchug without a clearance from Tatneft. So if they suspend supplies, I assume all other companies will have to do the same," said a trading source with a major Russian oil firm.

Tatneft bought a stake of over 30 percent in the refiner in the 1990s and agreed to jointly manage the firm with Ukraine's state company Naftogas.

Tatneft has since then repeatedly accused Ukraine of diluting its stake in the plant's managing company, UkrTatNafta, while Ukraine's officials have questionned the way the refiner was privatised.

On Friday, Interfax news agency reported that UkrTatNafta's former managers led by ex-chief executive Pavel Ovcharenko ousted the current management team, led by chief executive Sergei Glushko, from the refinery with the help of police.

The refinery was not immediately available for comment.

Source: Singapore News