Two large Ukrainian petroleum refineries have announced the results of their work for the first half of 2011. They turned out to be antipodal. The Lysychansk refinery belonging to TNK-BP and called now the Private Corporation Linyk has made 130 million dollars in profits (according to EDD), whereas for the same period of 2010 it profited only 13 million dollars. Meanwhile, the Ukrtatnafta refinery in Kremenchuk working under similar conditions has ended up with the loss of 470 million hryvnias. The experts took it as a pretext for discussion about the future of the Ukrainian refineries that previously could process annually 51 million tons of oil while today only 17.3 million tons. What’s next?
The director of the consulting group A-95 Serhii Kuiun emphasized that he trusts the information, announced by TNK-BP: “Their result is quite good. It’s clear that in theory the money for the urgently needed modernization of petroleum refineries exist.” He comes up with the similar conclusion on the Kremenchuk refinery, relying on the data from the company’s report which showed profit of 625 million hryvnias that have been transferred elsewhere. Let alone the prices for fuel oil and airplane fuel. “Where will the refineries get the money for the modernization under given conditions?” asks Kuiun. He states that the quality of the Ukrainian oil products is far beyond the one in such EU countries as Lithuania, Romania, Bulgaria, Poland and even Belarus. Russia has recently introduced criminal responsibility for the disruption of refineries modernization. The expert is sure that Ukraine has to go the same way. Kuiun believes that the state should strictly control the progress of works and to switch from the yearly non-committal memorandums to strict contracts and the same schedules of the work progress. Only in this case one can expect that Ukraine will finally get the oil products which will meet the European standards of quality. The expert worries that Ukraine has almost lost the time for the modernization of the petroleum refineries. “They don’t have any future,” he condemns Naftokhimik of Prykarpattia, Halychyna and even Odesa Lukoil. “While they were thinking all other enterprises were developing and modernizing.”
Volodymyr Yemelin, in 2008-10 the general manager of the association Ukrnaftokhimpererobka, is also concerned with the destiny of the Ukrainian refineries. According to him, the Ukrainian plants “had all the possibilities to get implanted into the system of the European integration.” To be able to do this they had to move towards reconstruction and modernization back in the 1990s, “taking into account the logistics (we’re just closer to Europe).” “Now Ukraine is of no interest in this sphere,” the expert regrets. In his opinion, Lukoil doesn’t need the Odesa refinery at all since the company has a refinery of the same power in Romania with the processing depth about 98 percent (this is a Soviet term that is not used in Europe), and its “Nelson’s index” is about 10, whereas the one of Odesa’s plant is 3.9. He considers only the Kremenchuk and Lysychansk refineries to be suitable for reconstruction. “How to make the owners do it,” he asks and refers to Europe where it was done easily: “You have a certain period of time and when this time is up the fuel of this quality cannot be produced or sold.”
The assistant director of the scientific and technical center Psikheia Hennadii Riabtsev predicts that the price for the oil products in Ukraine won’t go down anyway, even with the augmentation of processing volume and a better market content. In his opinion the price doesn’t depend on the processing volume but on the augmentation of the processing depth which can be achieved only through modernization and building new costly installations. The same goes for the fuel quality. The palliatives don’t help. Besides, the owners of the refineries think that the importers are to blame for all the current problems. “It’s a myth,” says Riabtsev and recalls the situation on the market during the reparation of the Mozyr refinery in Belarus when the plants in Lysychansk and Kremenchuk didn’t augment their production but cut it down in order to raise the price. The expert predicts that the government will probably introduce the barrage tax for imports, supposedly in order to support the domestic producers, “afterwards, the price for the oil products in the country will rise as much as the owners of the refineries want.” Yemelin added that in this case the gas price in Ukraine will rise up to 1.3 euros per liter.
