Bloomberg News

Lukoil to Study Odessa Refinery Sale on Poor Product Market

October 20, 2011

(Updates with product market in third paragraph.)

Oct. 20 (Bloomberg) -- OAO Lukoil, Russia’s second-largest oil producer, may sell its Odessa oil refinery in Ukraine after shutting it last year because of poor market conditions.

The Moscow-based oil producer is looking at options for the refinery, including “studying a possible sale” if the Ukrainian market for oil products doesn’t improve, Gennady Fedotov, vice president for economics and planning, told reporters today in Moscow.

Ukrainian plants have faced competition from product imports made in neighboring countries, like Belarus, that have access to cheaper crude oil, the International Energy Agency said earlier this year. Additionally, Ukraine has changed direction of oil flows on a pipe that previously fed the plant.

Lukoil closed the plant for maintenance in October 2010 and has yet to open it as it can’t get crude supplies at an acceptable price, Lukoil’s press service said by telephone today. Fedotov didn’t name any potential buyers.

--Editor: Will Kennedy

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Torrey Clark at tclark8@bloomberg.net


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