Belarus to Seek Compensation from Russia’s Transneft for Low-Quality Oil

Belarusian state oil company Belneftekhim is considering demanding compensation from Russian oil company Transneft for supplies of below-par quality oil, Belneftekhim’s CEO Andrei Rybakov said on Saturday, according to BelTA news agency.

“All possible consequences will be discussed with Transneft at a forthcoming meeting. The Belarusian side will insist on compensation mechanisms,” Rybakov said.

He said that the Mozyr oil refinery had been the first to report low-quality oil supplied from Russia. “Some sampled showed excess of chlorine-organic compounds by 100 times. These compounds are characterized by high corrosion activity and can clog heat-exchange equipment and damage expensive catalyst systems,” he said, adding that repairs of such equipment could take more than six months.

“In money terms, it is about at least tens of millions of dollars. The damage may reach hundreds of millions of dollars,” Rybakov stressed.

He also said that the low-quality oil had been removed from the refining process which meant that Belarusian companies continued to put out only high-quality products.

Belneftekhim said on Friday the quality of oil transited from Russia via the Druzhba oil pipeline had dramatically deteriorated. The company notified the pipeline’s operators from other countries about the situation.

In response to the allegations from the Belarusian company, Transneft’s representative Igor Demin said that “all claims on the quality of Russian oil will be settled.” Representatives of the two companies are planning to meet on Tuesday and discuss the issue.