TNK-BP (RTS: TNBP) is ready to consider any proposal concerning partnership in the Lisichansk oil refinery (LINIK), TNK-BP Executive Director German Khan told journalists on Thursday in Kyiv.
"We are ready for any kind of propositions and to consider them," Khan said.
The company has not received any proposals relative to the purchase of the plant, he said. "In the situation we find ourselves in, any potential buyer will be found. We are not now waiting for any kind of realistic proposal from the standpoint of buying LINIK," Khan said.
In contrast to other companies, TNK-BP is able to supply its own oil to LINIK, but this does make for profitable work at the refinery, he said.
Khan said he thinks it inadvisable to launch the plant for the processing of one million tonnes of Naftogaz Ukrainy oil on a tolling basis. "There was the idea. As far as I understand, it is already not under discussion," he said. Commissioning the refinery to process Naftogaz Ukrainy crude on a tolling basis would make sense if an annual program of 3-4 million tonnes of oil was put in place, he said.
TNK-BP intends in the near future to get LINIK mothballed, and TNK-BP's filling station chain in Ukraine will be supplied with oil products from Belarus, Lithuania, and other producers that offer attractive terms.
Khan said that in the company's view Ukraine's oil-refining sector can be maintained with comprehensive measures, including a complete transition to new fuel standards, and providing long-term market operating rubles and guarantees for investors. TNK-BP is of the view that one of such possible steps might be import duties on imported oil products.
TNK-BP is confident of a win in a tender for a production-sharing agreement for the Yuzovka site in Kharkyv and Donetsk Regions, he said. "We're totally optimistic, we want to win, because we have an advantage," he said.
The company knows the Ukrainian market well, and one of its owners stands ready to provide advanced technology for studying and developing alternative gas layers, he said.
TNK-BP is now consulting with the Ukrainian government on the particulars of the tender, Khan said. "We are consulting with the government so as to understand what the primary tasks will be for the investor. Short-term, padding out the budget, or long-term, gaining an additional gas resource," he said.
The company does not intend to bid for the Oleska (Lviv and Ivano-Frankivsk Regions) area, and is not looking to take part in the production of gas from coal-bed methane seams in Ukraine.
TNK-BP is prepared to consider the possibility of involvement in the development of sections in Ukraine's Black Sea waters when tenders are announced, Khan said. "However, we've not seen anything remarkable there yet," he said.
Khan met with Ukraine's Economy Minister Pyotr Poroshenko, First Deputy Prime Minister Valery Khoroshkovsky, and Energy and Coal Industry Minister Yuriy Boyko on Thursday. They discussed issues involved in the refining of oil in Ukraine and the holding of a tender for a Yuzovka PSA. Khan said that the Ukrainian ministers assured TNK-BP of transparency in the tender.
Ukraine announced a tender February 23 for a production-sharing agreement for hydrocarbons to be extracted from the Yuzovka and Oleska deposits. Offers are being accepted until April 23, inclusive.
Nadra Ukrainy and SPK-Geoservis LLC have already founded the joint enterprises Nadra Yuzovskaya LLC and Nadra Olesskaya LLC (both Kyiv-based), which will down the road be parties to PSAs. Nadra Ukrainy has 90% stakes in the JVs and SPK-Geoservis 10% stakes.
TNK-BP is represented in Ukraine by TNK-BP Commerce (management center, wholesale trade of petroleum products on domestic and foreign markets, coordinator of investment policy), the joint venture LLC Kerscher (retail petroleum product sales) and LINIK (operates the Lisichansk Oil Refinery).
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(Originally published April 13, 2012, in Russia & CIS Energy Newswire.)