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Russia’s Lukoil wants to sell directly to German refineries

Russia’s second-largest oil concern LUKoil said Thursday it would seek to sell its oil directly to German refineries without any intermediaries.

“We don’t need distributors. I hope they see it the same way in Germany,” Lukoil chief Vagit Alekperov said, according to the news agency Interfax. He said it was incomprehensible to him that German refineries still worked via distributors. In this connection, Alekperov mentioned the German general importer for Russian oil, Sunimex, with whom a price increase had been agreed. He did not go into specifics of the deal.

LUKoil, citing rising transit fees, has been throttling back its oil deliveries to Germany and other customers in the European Union since June. By Russian accounts, this is due to the higher fees charged by Belarus for the transshipments through its pipeline network, in turn making the prices agreed on in the sales deals unprofitable. Under the current contract, Germany is to pay some €5.86 billion ($7.96 billion) this year for oil imported from Russia.

However the entire amount of the money does not go to producers like LUKoil, but instead part of it goes to the trading companies acting as the contracting partners of the refineries. In his remarks, Alekperov repeatedly expressed his interest in buying refineries in Europe in order to maximize the earnings from LUKoil’s oil sales. (m&c.com)