The Verkhovna Rada, Ukraine’s parliament, on November 11, 2011 received a bill on the ratification of an agreement between Ukraine’s Cabinet of Ministers and the Government of Azerbaijan on measures to develop cooperation in crude oil transportation with Ukraine. An explanatory note to the document read that «shipments of high-quality crude oil from the Caspian Region to Ukrainian oil refineries will strengthen the leverage of the state’s impact on the situation with prices on the fuel market through an increase in the share of locally produced commodities.» As if to confirm this intention, Ukrtatnafta on November 17, 2011, won a tender held by PJSC Ukrtransnafta to process 300,000 tonnes of Azeri Light oil in the fourth quarter of 2011 and the first quarter of 2012. The 200,000 tonnes of petrol and diesel fuel produced is to be sold by the operator of the Ukrainian oil transport system, Ukrtransnafta, on the country’s domestic market. Does it mean that Ukraine has really taken two more steps towards its energy independence and the creation of a stabilization reserve of fuel?
But why then is there so little faith in the eyes of the experts? Why do the mass media report about intentions to supply oil to the Privat Group’s refineries «at the expense of state funds with the assistance of corrupt officials» and the willingness of Ukrtransnafta to «start shipments of oil whose origin remains vague?» According to our colleagues from OilNews, «at the moment it remains unknown under whose instructions and under which programs the oil transport company is engaged in the purchase and processing of oil, and the sale of oil products.» Well, this is not the case. Under Clause 1.3 of the measures to diversify sources of crude oil supplies to Ukraine until 2015, which were amended under government resolution No.726 of July 6, 2011, PAO Ukrtransnafta has been authorized «to ensure there are crude oil supplies from alternative sources to oil refineries.» Then comes an interesting detail: «including the supply of light crude oil (i.e. that from Azerbaijan – the author) to Kremenchuk, Nadvirna, Drohobych, and Odesa oil refineries.» Prior to the amending of the list of the measures, only the Energy Ministry, the State Property Fund and NJSC Naftogaz Ukrainy could deal with ensuring «crude oil supplies from alternative sources to oil refineries» (without any other details).
As for the sale of fuel, this is really not one of Ukrtransnafta’s functions – except that it can be. On January 20, 2007, under a protocol-based instruction by the Energy Ministry, the supervisory board authorized Ukrtransnafta’s board to create a stabilization reserve of fuel in Ukraine. Since the mentioned activities were not covered by the company’s bylaws, Ukrtatnafta sent a corresponding request to the National Electricity Regulatory Commission (NERC).
Five days later, on January 25, 2007, the agenda of an NERC open meeting included issue No. 8, on the approval of the requirements (as the paper stated – the author) of OJSC Ukrtransnafta – a licensee for the transportation of oil by main pipelines – in connection with other activities not covered by the license (trade in oil products).» Judging from the actions taken by the company after the committee meeting, the issue was resolved in its favor.
