Odessa Oil Refinery: history of development and failure

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:40

Odessa refinery (oil refinery) has been operating since 1938. When the war began, the plant's facilities were transferred to the city of Syzran. Some time later, in 1949, it was recreated in the same place. Subsequently, it was repeatedly equipped with new equipment, the treatment facilities were strengthened, since industrial waste was poured into the Black Sea at that time (until the 70s of the XX century), modernized, increased capacity, and, accordingly, expanded production.

Odessa Refinery is located at the address: Ukraine, Odessa, Shkodova Gora street, 1/1 and specializes in the production of:

• gasoline brands A-98, A-95, A-92, A-80;
• diesel fuel;
• LPG;
• sulphur;
• fuel oil;
• vacuum gas oil;
• jet fuel;
• petrobitumen road, construction, roofing;

History of the merger between Lukoil and Odessa Oil Refinery

In the mid-1990s, Lukoil began supplying black gold to the enterprise. In 1999, the company merged with Synthesis Oil for a joint buyout of 51.9%refinery shares. In the spring of next year, the Russian company acquired another 25% stake in the Odessa Oil Refinery. At this point, the issue of Sintez Oil leaving the alliance with the subsequent transfer of their share to Lukoil was practically resolved.

As a result, in the middle of 2000, the largest Russian oil player owned about 86% of the shares of the Ukrainian enterprise, which at that time cost about $ 7 million, and at the same time the Lukoil-Odessa Oil Refinery was created.

Factory Development

In 2001, the new management set the task of reaching the European level of work and equipment in 4 years. Investments during this time amounted to about 73 million dollars. This made it possible to increase production volumes, they began to produce fuel according to the Euro-3 standard, and by 2004 diesel fuel according to Euro-4 standards. The enterprise annually paid huge taxes to Ukraine, contributed to the improvement of the country's economic condition.

The next ten years are characterized by periodic ups and downs. The reason for this is largely the instability of the economy and changing conditions in the Ukrainian oil market. Including there is information that the administration of Viktor Yanukovych, who came to power at that time, contributed to the crisis of the enterprise.

Transfer of ownership

As a result, in the fall of 2010, Vagit Yusufovich Alekperov, the head of Lukoil, said that the enterprise was unprofitable and suffered heavy losses forcompanies. It became unprofitable to buy raw materials - the supplier radically changed the conditions and the supply of oil to the refineries was suspended, they began to prepare for the conservation of production.

The Odessa Oil Refinery remained in this position of uncertainty until February 2013, when the local VETEK Group (Eastern European Fuel and Energy Company) showed interest in the plant. The negotiations ended with the signing of contracts for the transfer of 99.6% of the shares to the Ukrainian side under the leadership of Sergei Vitalievich Kurchenko, a young entrepreneur close to the ex-president. In the summer of 2013, this agreement began to operate.

It is believed that Kurchenko knew that a new customs order on a protective duty would soon come into effect, freeing the country's market from foreign competitors, thereby the refinery's activities would again become profitable.

The collapse of the enterprise

The further life of the Odessa Oil Refinery was complicated by another change in the leadership of the country. Law enforcement agencies began to suspect the management of VETEK of laundering illegal funds and participating in illegal oil exports. The management of the enterprise was put on the wanted list.

A court decision ruled to withdraw oil and oil products from the enterprise for subsequent transfer to the state company Ukrtransnaftaprodukt for sale in the near future.

What's going on today?

Recent events at the Odessa Oil Refinery are characterized by sad news. In 2014, 4 managers were replaced as the General Director of the refinery. Changes inmanagement of the enterprise were observed both in 2015 and 2016. Officially, most of the employees were sent on vacation without paying wage arrears.

In the winter of 2016, by the decision of the Odessa Regional Court, bankruptcy proceedings began. The largest debt among all contractors of the Odessa Oil Refinery is to Empson Limited. It was not possible to find out who exactly owns the Cypriot company. But the main version is that the owner is still the same Sergey Vitalyevich Kurchenko, the owner of the VETEK group of companies. He, in turn, declares that he has nothing to do with the company, and says that in fact Empson belongs to Lukoil. Also, the oil refineries have large debts to the Odessaoblenergo company.

Despite all the dark things happening around the Odessa Oil Refinery, residents of the city are guaranteed the restoration of the operation of the enterprise in the near future. Still, this largest enterprise has always played a huge role in the life of Odessa residents: it ensured the economic growth of the city, created jobs and conditions for the development of the region.