Archive for January 20th, 2018

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The “renationalisation” of Odessa Oil Refinery

January 20, 2018

The Odessa Oil Refinery has an interesting contemporary history – and naturally not one without shenanigans involving those holding high office at the relevant time.

Once owned by Russian producer Lukoil, the Odessa Oil Refinery was “bought” by Sergei Kurchenko’s VETEK Group in 2013, less than a year prior to his fleeing Ukraine for Russia along with many of the Yanukovych “family”.

It follows that in 2014 the refinery was swiftly subject of arrest by the Ukrainian courts following the flight of the former Yanukovych regime along with many other assets acquired.

For the 3 years that followed the refinery was placed under the operational control of Ukrtransnaftoprodukt which immediately “sold” tens of thousands of tonnes of oil at extremely questionable prices to Ukrulprodukt – part of the Factor Group headed by Sergei Tishchenko.

Mr Tishchenko is very close to one of the most odious grey cardinals in Ukrainian politics, Sergei Pashinsky of then Prime Minister Arseny Yatseniuk’s People’s Front party.  (Mr Pashinsky is a truly vile and disgraceful character.)

It follows therefore, that Ukrtransnaftoprodukt was swiftly headed by Alexander Gorbunov formerly of the Factor Group over which Messrs Tishchenko and Pashinsky command.

A reader may infer that considering the widely rumoured shenanigans surrounding Messrs Tishchenko and Pashinsky with regard to nefarious petrolium/oil products, the Odessa Oil Refinery was in fact more likely to have been a convenient shield/front for the unlawful activities than it was a source of “off schematic” product.

During the summer of 2017, the courts of Odessa eventually ruled that the Odessa Oil Refinery be confiscated as the proceeds of crime from Mr Kurchencko/the Yanukovych “family” crime syndicate.  The oil refinery to become State owned.

Quite right.

The question however, is whether the odious Sergei Pashinsky (and Sergei Tishchenko) would retain control over the refinery and the ability to use to mask their nefarious ways – despite the fact that the refinery was barely operational at this point.

A new State Owned Enterprise (SOE) has now been created, “SE Odessa Refinery”, to own in its entirety the Odessa Oil Refinery.

Following a State Property Fund “competition” to lead the new SOE, Yuri Stolyarov was appointed.  By “coincidence”, Mr Stolyarov was also appointed to the same position in 2013 by the self-exiled and wanted Mr Kurchenko when he “bought” the plant from Lukoil prior to fleeing Ukraine.

Regardless of any technical ability, a reader may ponder whether Mr Stolyarov is appointed due to being well versed in the schemes and scams through “spillage”, “contamination” and “off-schematic” oil supply to “vested interests” behind the curtain.  (Something that will clearly not have been missed by the appointing body.)

Heading the State Property Fund responsible for the new SOE, and by extension the Odessa Oil Refinery, is Vladimir Derzhavin, the Deputy Head of the State Property Fund.

Naturally Mr Derzhavin did not reach that lofty and influential/facilitatory position by ability alone.  He is somebody’s man – and that somebody is now de facto (though not de jure) in control of the Odessa Oil Refinery via Messrs Stolyarov and Derzhavin.

So is Mr Derzhavin a soul owned by Mr Pashinsky to insure his “interests” at the Odessa Oil Refinery remain?

The unambiguous answer is “no”.

Mr Darzhavin is a former assistant to Ihor Kononenko – President Poroshenko’s leg-breaker in the Verkhovna Rada, and a long time business partner of the president.

Messrs Pashinksy and Tishchenko are therefore “out” and thus removed is a convenient shield/front to other petroleum shenanigans  – and in comes Ihor Kononenko, (a man actively collecting energy assets), and by extension the innermost presidential conclave when it comes to control over the Odessa Oil Refinery.

However, as stated, the Odessa Oil Refinery is not refining a great deal of oil due to over 3 years of legal due process and associated asset arrest, that has only recently (and finally) concluded – it currently remains little more than a regime of preventative maintenance on site.

Further Ukraine has embarked upon a policy of privatisation of SOEs.  This renationalising the Odessa Oil Refinery is therefore very much contrary to that policy.

The question therefore is how swiftly will the Odessa Oil Refinery appear upon the list of SOEs slated from privatisation?

Also in what condition will it be privatised (for the preventive maintenance programme may not have been particularly preventative)?

Should it be slated for privatisation “as is” under the new (and much improved) privatisation legislation, or under the “stewardship” of the new SE Odessa Refinery (read de facto Ihor Kononenko) will UAH hundreds of millions of State funds “appear” (and subsequently disappear) to upgrade the refinery prior to privatisation?

A reader, cynical as they are, must surely suspect that the later will be the case, and that UAH hundreds of millions in State funds will be used (and abused) under the de facto control of Ihor Kononenko – and by extension there will be no rush to place a renationalised Odessa Oil Refinery upon the privatisation list.  Policy be damned.

Something to watch over the next year or two for sure.

Nevertheless, perhaps Odessa should be grateful for small mercies with the departure of the loathsome Sergei Pashinsky from the shenanigans of the Odessa Oil Refinery – even if the de facto control of Ihor Kononenko is a particularly welcoming prospect.

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