Russia’s Transneft expects to complete tainted oil payments by mid-2021

Russia’s Transneft expects to complete tainted oil payments by mid-2021

Up to 5 million tonnes of tainted oil was sent to central Europe via the Druzhba pipeline last year, in one of the most serious crises ever to hit Russian energy exports

MOSCOW: Russian oil pipeline monopoly Transneft said on Monday it expected to complete compensation payments for contaminated oil by around mid-2021 and that it had already paid out over $143 million, more than half of what is due.

Up to 5 million tonnes of tainted oil was sent to central Europe via the Druzhba pipeline last year, in one of the most serious crises ever to hit Russian energy exports.

Organic chlorides were found in Urals crude export flows in late April last year, and Transneft has committed to paying the compensation for the losses stemming from the incident.

State-owned Transneft has already paid some compensation to companies from Kazakhstan, as well as to French energy giant Total and Hungary’s MOL.

Maxim Grishanin, Transneft’s chief financial officer, told a conference call with the investors on Monday that the company had paid $143.6 million tonnes in compensation.

“This, according to our estimates, is more than a half. We hope to settle significant volumes (of payments) by the year-end so, on the whole, the work will end by approximately the middle of the next year,” he said.

Belarus, Russia’s large oil buyer, is yet to receive compensation. Belarusian energy company Belneftekhim has said it was expecting over $61 million in compensation for the 563,000 tonnes of contaminated oil it received, according to Interfax news agency.

That translates roughly to $15 per barrel, the highest possible level of compensation expected from Transneft.

Transneft’s Grishanin also said the company expected oil flows via its system, which transports more than 80% of all Russia’s oil, to reach 440-450 million tonnes next year, on a par with 2020.

The volumes will depend on how the deal among leading oil global producers, the OPEC+ group, unfolds next year, he added.

Grishanin said the finance ministry was currently working on a dividend policy for the state-owned companies, including Transneft, which had to cut their investments and saw profits plummet due to the fallout from the COVID-19 pandemic.

https://energy.economictimes.indiatimes.com/news/oil-and-gas/russias-transneft-expects-to-complete-tainted-oil-payments-by-mid-2021/79609294

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