Bloomberg News

Lukoil to Restore German Exports, Seeks Higher Price

August 28, 2007

OAO Lukoil, Russia's largest non- state oil producer, wants to raise prices for its crude exports to Germany after agreeing to restore disrupted shipments along the Druzhba pipeline.

Lukoil is in talks with traders about increasing prices for oil shipped to Poland, Czech Republic and Slovakia as well, to make sure export routes are equally profitable, Chief Executive Officer Vagit Alekperov said in Moscow, in remarks relayed by spokesman Vladimir Semakov by telephone.

Lukoil's exports to Germany next month will exceed the 467,000 tons (3.42 million barrels) it shipped in May, Semakov said earlier today. He declined to comment on an Interfax report that the company will ship 600,000 tons.

``We will ship full amounts next month,'' Semakov said. ``It was a commercial issue.''

Lukoil cut supplies through Druzhba because shipping oil through the Baltic pipeline to a sea port for export became more profitable, Semakov said.

Russian oil companies may boost shipments of crude next month before record export taxes take effect. The crude export tax will be raised by as much as 12 percent to $250.60 a ton ($34.20 a barrel) on Oct. 1, the Finance Ministry said yesterday.

Lukoil shipped one-third less oil through Druzhba in July and August than it had reserved capacity for, according to OAO Transneft, the pipeline operator.

Two German refineries, Total Raffinerie Mitteldeutschland GmbH in Leuna and PCK Raffinerie GmbH in Schwedt, tapped fuel from alternative sources to continue supplying their customers in full, spokesmen for the plants said by telephone last week.

To contact the reporter on this story: Torrey Clark in Moscow at tclark8@bloomberg.net.

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.


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