Belarus Starts Charging Russian Suppliers Penalties over Dirty Oil

Belarusian oil refinery Naftan has started charging penalties from Russian suppliers due to the short supply of marketable oil in April, Sergei Altukhov, deputy CEO of the Belarusian refinery, told reporters on Tuesday, according to BelTA news agency reports.

“The company’s legal department began work on charging penalties in respect of Russian suppliers due to short supply of on-spec oil in April,” he said.

Costs related to a performance decline of the refinery are currently estimated. The overall package of claims will be prepared after conclusion of this process and claim handling will continue, Altukhov added.

The refinery had to reduce its refining throughput by half at the turn of April due to deliveries of contaminated oil over the Druzhba oil pipeline, the top manager said. The company continues working with such capacity utilization and refines oil delivered over the Surgut-Polotsk pipeline, Altukhov noted.

“Oil has proper quality, making it possible to use it without concerns regarding equipment operability,” he noted.

The Druzhba oil pipeline system supports oil deliveries to Belarusian refineries and oil transit to Europe via Belarus in two directions, through Poland and Ukraine.

On April 19, Belarusian company Belneftekhim reported a sharp deterioration of the quality of the Russian oil running through the pipeline and subsequently informed operators from other countries about the situation. The content of organochloride compounds in oil was dozens of times above the limit value, the company said.

Two Belarusian refineries, the Mozyr Refinery and Naftan, had to reduce capacity utilization and sustained losses. Deliveries of oil to Naftan over the Surgut-Polotsk oil pipeline have started according to arrangements.