Achillesov “Ukrtransnafta”
Yesterday, 23:38 The return of Ukrtransnafta to state control will provide everyone with access to auctions for the sale of Ukrnafta oil, which will create competition and have a beneficial effect on the price. Theoretically, the opportunity opens up for more flexible strategic negotiations with oil producers to attract oil transit.
More sad events occurred in the fate of the Privat group in one week than in the last few years. On Wednesday, March 18, for the first time in the foreseeable past, the group bought Ukrnafta oil at the market price, without a 15–75% discount. Late Thursday evening, parliament passed a law clearing the way for the state to resume legal control over Ukrnafta, which has been run by Privat since 2003.
But the main events unfolded around the third episode. On Thursday morning, the supervisory board of the oil transportation company Ukrtransnafta, 100% owned by the state, decided to remove the protege of the Privat group, Alexander Lazorko, from the post of chairman of the board. As a result, on the evening of March 19, the country saw the Dnepropetrovsk governor with machine gunners “liberate” the office of the state company Ukrtransnafta, give an epic interview to journalists using vivid obscene language and promise to deal with everyone, including the president.
So, the state and its institutions have finally shown how they can and should act to restore their rights. But will they be able to defend their decision and, most importantly, go further along the path of de-oligarchization of the country? We will get the answer to this question very soon.
Alexander Lazorko is a classmate of Igor Palitsa, the Odessa governor and Igor Kolomoisky’s partner in the oil business. He headed two “Privat” oil refineries (refineries) in Nadvirna and Drohobych, and in 2009 he was literally brought into the chair of the head of Ukrtransnafta, having previously removed Igor Kiryushin from there. At the same time, there were broken glasses and thugs (let’s remember this detail). Feeling confident under Yulia Tymoshenko and Viktor Yushchenko, Alexander Ivanovich felt good under Viktor Yanukovych and very comfortable – already under the “democratic regime”. Industry circles claim that Lazorko’s retention of the head of Ukrtransnafta was part of the agreements between Igor Kolomoisky and Arseniy Yatsenyuk. Why is “Privat” so protective of its “chick”?
Ukrtransnafta is a strategically important link in the vertically integrated oil structure of Privat. In essence, it is a circulatory system that connects the key organs of this “organism”.
Firstly, it supplies oil from Ukrnafta to the Kremenchug refinery Ukrtatnafta, which produces the lion’s share of fuel for further sale through the country’s largest retail network (Avias, ANP, Ukrnafta, etc.).
Many are confident that Ukrtransnafta supplies Kremenchug with “unaccounted for oil” from Ukrnafta’s fields, but this can only be confirmed by a special investigation, which, for obvious reasons, was previously impossible in principle. According to information from sources at Naftogaz, in the first hours after the change of management, the staff had already managed to leak a lot of interesting things.
Secondly, Ukrtransnafta is an effective tool in the fight against competitors, which has fulfilled its role to the fullest – Privat no longer has competitors in this business.
The first step that Lazorko took in his career as a “pipeline engineer” was to cut off the Odessa refinery from the oil supply route through which it had been receiving oil for decades. Why was this done? To pump oil in the opposite direction, to Kremenchug, which by that time was occupied by Privat. Last year, the Russian Rosneft also faced problems with oil supplies to its refinery in Lisichansk, but the war “nullified” the project of this company.
Thirdly, there is something to profit from at Ukrtransnafta. Under Lazorko, it turned from an oil transportation company into an oil refining company, which purchased imported raw materials with its own money or pumped oil out of the oil pipelines entrusted to it, subsequently processing it at the Privat refinery at the “correct” tariffs and selling the fuel to “Privat” structures.
Last straw
As important as Ukrtransnafta is in Privat’s business, it is just as vulnerable. This company is completely state-owned, in contrast to those also controlled by Privat through the management of Ukrnafta and Ukrtatnafta, where Kolomoisky banks as a shareholder. Over the past year, the activities of the state-owned company headed by Palitsa’s classmate began to look completely ugly. Recently it turned out that Ukrtransnafta pays Privat plants in Kremenchug, Nadvirna and Drohobych about 2.5 million UAH per day for storing… state oil. Previously, raw materials were located in the oil pipelines of the same Ukrtransnafta and did not require additional storage costs. But in the spring of 2014, under the pretext of the separatist threat, oil was pumped out not only from relatively small eastern areas, but also from the rest, in particular in Western Ukraine, where there was no threat.
Yes, it should be clarified that Ukrtransnafta pays “bad” money not for storage, but for renting tanks. “Not storage services, but rental of tanks – such a formulation allowed Ukrtransnafta to bypass some tender procedures and provide such payments,” emphasizes a ZN.UA source at Naftogaz of Ukraine, who wished to remain anonymous. In total, under this article, more than 300 million UAH have been spent on Privat structures over the past six months.
They say that the mentioned 300 million allowed the coalition partners, the president and the “Western partners” to drive Yatsenyuk into a corner: either he gives the go-ahead to the supervisory board of Ukrtransnafta, consisting of NAC employees, to dismiss Kolomoisky’s man, or he is “revealed” completely. Sources in Naftogaz say that Yatsenyuk gave the command, and the formal reason for the supervisory board’s vote was the order of the Minister of Energy and Coal Industry Demchishin. “To decide on the temporary removal of the chairman of the board of Ukrtransnafta, a directive from the Cabinet of Ministers is not needed; an order from the Ministry of Energy and Coal Industry is sufficient,” says a source in NAC. The information about the agreement with the prime minister is also supported by the fact that Naftogaz is completely within his orbit of influence and is unlikely to engage in independent activities.
Elephant dance
Elephants can dance, this spectacle is literally mesmerizing when it is organic with nature, and not under the stick of the mahout. In the case of Ukrtransnafta, we observed the dance of an elephant in a china shop.
The “special operation” to dismiss Lazorko was carried out brilliantly. The key to success was the regime of silence, as a result of which the “enemy” did not have the opportunity to take countermeasures.
On March 19 at 11.00 the company’s supervisory board decides to remove Lazorko and appoint Yuriy Miroshnik as acting head of the board of Ukrtransnafta.
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At about 12.00, the new director, together with the head of the supervisory board, Savchenko, arrives at the Ukrtransnafta office. Attempts by security guards at the company’s head office to barricade themselves were quickly stopped by unknown people in plain clothes, who, according to our sources, were employees of the SBU special unit “Alpha” (this detail is important, as it indicates the participation of the presidential vertical in the process). Confused Lazorko was forced to leave the premises.
“To prevent the possibility of challenging the decision of the supervisory board in court, Lazorko was not fired, but suspended for the period from March 19 to August 10, 2015, that is, in fact, until the contract with him expires,” one explains the intricacies of the operation from members of the supervisory board of Ukrtransnafta. A little later, Alexander Lazorko, at a press conference called at 16.00, will essentially say that he has nothing to show – everything is according to the law. The only complaint of the flushed Alexander Ivanovich was that the reasons for his dismissal were not explained to him. It may be so, but the owner, in our case the state, is not obliged to do this. Moreover, the defendant has only been suspended for now.
The Dnepropetrovsk governor spoke differently, who on the evening of March 19 descended on the Ukrtransnafta office with machine gunners and people’s deputies led by Vitaly Khomutynnik, who also fully “manifested” himself in this situation. Kolomoisky said that Yuri Miroshnik “appointed himself,” carried out a raider seizure and, as follows from his fiery speech, is a Russian saboteur.
The irony of fate is that in June 2009, “Privat” installed Lazorko in the chair of the head of an oil transportation company according to the same scenario in which he was removed on March 19, 2015. There was also a decision of the supervisory board to remove the head of the board Igor Kiryushin, the same jostling with broken glass in the office on Kutuzova, 18. At the same time, Kiryushin, being far from an angel, did not pump out almost 1 million tons of oil from the oil pipelines entrusted to him for subsequent processing and did not lose oil transportation volumes by more than double, as happened under Lazorko (in 2014, just over 17 million tons were transported through Ukrainian oil pipelines, while in 2009 – 38.5 million).
What was not there in 2009 was a Dnepropetrovsk or any other high-ranking civil servant who would say that he had raised two thousand fighters and was going to the president… to talk about Ukrtransnafta.
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So, Ukrtransnafta is 100% owned by the state, and de jure Mr. Kolomoisky has no rights to it. The decision to remove Lazorko was made with the joint participation of Poroshenko and Yatsenyuk, and the state has finally shown how it should and how it can act.
Perhaps we just need to draw a line and not make it a priority to investigate the company’s activities over recent years; now there is someone to fight with. The effect will be in any case. It is necessary to take oil from the “Privat” refineries, because its fate is now of particular concern. The cost of the 300 thousand tons of oil stored there is about 4.5 billion UAH.
Next. The return of Ukrtransnafta to state control will provide everyone with access to auctions for the sale of Ukrnafta’s oil, which will create competition and have a beneficial effect on the price. Now everyone understands that going to the Ukrnafta auction is useless, since Ukrtransnafta, under any pretext, will refuse to pump the purchased resource, except to the “Privat” Ukrtatnafta – into a trap from which it is impossible to escape. It is also possible that state control will allow Ukrnafta to sharply increase its performance in terms of production, and that of Ukrtatnafta in its processing of raw materials. And this is rent, excise taxes and other taxes to the budget.
Theoretically, the opportunity opens up for more flexible strategic negotiations with oil producers to attract oil transit. In recent years, everyone has realized that a conversation with Ukrtransnafta is a conversation with Privat, and not with the state. True, hopes for a revival of former transit volumes are low – over the past six years, “big” oil has found other routes for itself, and it will be extremely difficult to change them.
But all this will happen only if the state keeps Ukrtransnafta in its orbit. This is an extremely important test for both Poroshenko and Yatsenyuk.
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