Sector News

Russia's Rosneft cancels Lukoil's oil purchase deal with Bashneft

October 28, 2016
News

Russia’s largest oil producer Rosneft said on Thursday it had asked peer Lukoil to cancel a crude oil purchasing contract with Bashneft, which RBC daily put at 400 billion roubles ($6.4 billion).

Earlier this month Rosneft acquired just over 50 percent in mid-sized oil producer Bashneft for 330 billion roubles as part of a government privatisation.

Rosneft said it has asked Lukoil to annul the agreement with Bashneft, according to which Russian No.2 oil producer Lukoil supplied Bashneft’s refineries with crude oil and received oil products.

“The proposal was supported by Lukoil,” a Rosneft’s spokesman said without valuing the deal. Lukoil was not immediately available for comment.

Rosneft, headed by Igor Sechin, an ally of President Vladimir Putin, appointed its own representative to govern Bashneft almost immediately after acquiring control.

It was not immediately clear who would take over the supplies in question, how much crude oil Rosneft will redirect to Bashneft’s refineries and who will handle oil products marketing from Bashneft’s plants. Basheft’s total refining capacity stands at 23.2 million tonnes per year.

By Oksana Kobzeva and Vladimir Soldatkin

Source: Reuters

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