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Transneft to complete assessment of Druzhba incident consequences by mid-2020

December 04, 2019/ 08:07

Moscow. Transneft is to complete an assessment of consequences for the company from the Druzhba oil pipeline incident by mid-2020, First Vice President of the Russian oil pipeline operator Maxim Grishanin told a teleconference with investors on Tuesday.

"It is clear that we will suffer costs. We are estimating, gathering them. We will complete the assessment of consequences by somewhere in the middle of 2020; we will gather all costs by that time," Grishanin said.

Not a single owner of refineries presented its claims in respect of the incident so far, Grishanin stressed. "Concerning refineries, if the damage occurred, it was a small one. At least not a single counterparty declared such damages with exact linking of damages to the incident," he added.

Transneft expects that payment of compensations due to oil contamination in the Druzhba oil pipeline will last until the end of the first half of 2020, Maxim Grishanin stated.

"Concerning payments, I believe this will not be a quick process. According to our estimates, the whole settlement procedure will continue somewhat until the end of the first half of 2020," Grishanin commented,told TASS.

In mid-April, Belneftekhim Company reported a sharp deterioration in the quality of the Russian oil running through the pipeline. As a result, several states stopped receiving and refining the Russian oil. The contaminant source was revealed at the Samara-Unecha section. Transneft claimed that the Russian oil in the Druzhba pipeline was deliberately contaminated. Russia’s Investigative Committee said that contaminated oil was loaded into the Druzhba oil pipeline in order to conceal multiple oil thefts.

On June 3, the talks on settlement of the issue around supplies of contaminated oil were held in Moscow, after which Russia’s Deputy Energy Minister Pavel Sorokin told reporters that all participants reached a common understanding of the principles for calculation of compensations for supplies of off-spec oil.

In July 2019, the Board of Directors of Transneft approved the cap for compensation to shippers for oil contamination as $15 per barrel. The company set up the reserve of 23 bln rubles ($358.3 mln) for payment of compensations.


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