Transneft to control Russian oil export via ports

The Russian oil transportation monopoly Transneft soon will not only deal in transporting oil through pipelines but also control oil exports via seaports, the daily newspaper Vedomosti reported.

Disagreements between Trans-neft and the current controller of oil transportation, the Russian central controller for fuel and energy, CDU-TEK, have disrupted oil supplies to Latvia's Ventspils port.

A high-ranking official from the Russian Ministry of Energy told the newspaper that Energy Minister Igor Yusufov would sign documents in the coming days that would authorize Transneft to decide through which ports Russian companies should export oil.

Since 1995, oil companies themselves have been coordinating port matters. For instance, export procedure through Ventspils port was worked out by the companies Onako, Sidanko, Novorossiysk-LUKoil, Rosneft and Yukos.

According to Vedomosti, working out the procedure has been more of a burden to these firms than a business opportunity. At the end of 1999, the Russian government assigned CDU-TEK, which operates under the auspices of the Ministry of Energy, to develop export schedules.

Transneft had also attempted to receive such a mandate. At the end of 2000, a protocol was signed that appointed Transneft to be an interim coordinator for ports in Novorosiysk and Tuapse. Trans-neft also started to coordinate oil exports at Russia's Primorsk port after it was constructed.

Transneft and affiliated organizations receive commissions for the mediator operations. Transneft has also opened offices at the Butinge terminal in Lithuania but did not succeed in Ventspils. While it had retreated from most other ports, CDU-TEK refused to relinquish its role at Ventspils port.

Differences between Transneft and CDU-TEK grew serious in April, when oil volumes through Ventspils fell to well below capacity, Vedomosti reported.

"We cannot understand what is going on," an official at the Russian Energy Ministry, who is also linked with the administration at Ventspils port, told the newspaper. "Since April, we have seen delays in supplies. The port's schedule, which is prepared by CDU-TEK, has nothing to do with reality, and it is not being observed by Transneft.

The turnover has fallen twofold, we handle 600,000 tons a month at best, instead of 1.3 million tons."

Since April 1, the paper reported that too much oil is being transported to Butinge and Mazeikiai in Lithuania, but not enough through Ventspils.

CDU-TEK declined to comment on the matter.

Transneft Vice President Sergei Grigoryev said the decrease in Ventspils-bound oil was part of an attempt to bring "order to transportation of export oil."

"We do not aim to control the entire procedure. It is just that the oil transportation procedure should be the same on this or any other route," he said.

Vedomosti reported that oil companies that have chosen to export oil via Ventspils now suffer losses of hundreds of thousands of dollars.

"I wish the situation would be solved faster," a LUKoil spokesman said. "If port schedules go to Transneft, it will be even better. There will be one controller less," he said.