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A crude business – or the return of a slick operation? Odessa Oil Refinery

December 19, 2015

A few years ago, when then President Yanukovych and “family” were busy “collecting” all assets they could possibly buy at knock down rates, coerce, blatantly steal, raid, and otherwise take control of one way or another, an entry appeared regarding the sale of Odessa Oil Refinery to VETEK LLC by Luk Oil.  VETEK LLC being a vehicle then fronted by Andrey Koshel on behalf of the now fugitive Serhiy Kurchenko.

It was, as that entry infers, a murky business – which will come as no surprise.

Odessa Oil Refinery

Odessa Oil Refinery

On 25th November 2014, Odessa Oil Refinery was arrested being an asset of Serhiy Kurchenko, wanted in Ukraine for all manner of corrupt activities.  It is no secret that Ihor Kolomoisky was a firm lobbyist for this asset to be seized/arrested, despite transparent statements of disinterest at the time – “It is not our asset, and we are not interested in it, we have underused Kremenchug plant, and the Odessa refinery should be closed so as not to spoil the ecology of Odessa. Odessa should shine after the loss of the Crimea.”

Indeed, Ihor Kolomoisky’s trusted friend Ihor Palitsa was the Odessa Governor at the time of the asset arrest.

Naturally only the truly naive would believe Mr Kolomoisky’s statement of apparent disinterest, for as this blog stated on the day the refinery was seized “Presumably all oil at Odessa Refinery will now be stored at the State owned Ukrtransnefteprodukt.”  As with all State owned enterprises, there are those with an interest and a certain amount of control over them.

In the case of Ukrtransnefteprodukt?  Ihor Kolomoisky and Sergei Pashinsky.

Since November 2014 little (legitimate and/or overt) has really occurred at the Odessa Oil Refinery – although it is now, suddenly, seeing some activity.

It is rumoured that the management has been told to prepare to have the oil refinery running once more.  Security personnel are being replaced.  It is said employment contracts for refinery personnel are being drafted.

The heavily backed rumour by the local “oil people” is that Ukrtransnefteprodukt has taken over (or is about to take over) Odessa Oil Refinery.  Messrs Kolomoisky and Pashinsky will be pleased to have another State owned enterprise from which to guzzle – no matter how long  Ukrtransnefteprodukt will actually own and/or the refinery.

So what happens to the oil at the refinery when it was seized (if it is still there and hasn’t disappeared into the night ne’er to be seen again)?

How has Ukrtransnefteprodukt lawfully taken ownership?  A court verdict?  A deal with  Serhiy Kurchenko?

With whom has a deal been struck to supply oil to the refinery?

With low oil prices and a global glut of oil, to whom will the refinery sell?

Is the State take over, if the rumours be true, less about oil and more about nationalising an oil refinery asset simply with a view to get it on the State books to then list it for privatising and sell on?  To use an oil trading phrase, is the government plan to assume ownership of this seized asset to then “flip title” to a buyer thus gathering in the profit as swiftly as possible?

If so, is there a potential buyer out there?  It is not an asset for which an argument can be made to retain it upon the State books when all is said and done.

Something local to keep an eye on.  A crude nefarious business – or the a transparent slick operation awaits Odessa Oil Refinery?

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