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Russia's Transneft Blames Small Private Firm For Problem Exporting Oil To Europe

Russian President Vladimir Putin (left) and Transneft head Nikolai Tokarev meet at the Kremlin in Moscow on April 30.
Russian President Vladimir Putin (left) and Transneft head Nikolai Tokarev meet at the Kremlin in Moscow on April 30.

Russian oil company Transneft has accused a small private company of being responsible for contaminating oil that caused a shutdown of exports to several European countries, saying the issue had to be investigated.

Transneft CEO Nikolai Tokarev said during a meeting with President Vladimir Putin in Moscow on April 30 that a firm in the Samara region -- which he did not name -- was responsible for the contaminated deliveries.

Tokarev said the company had sent untreated oil into the Druzhba pipeline going through Belarus and described the situation as "pure fraud."

He added that the company "accumulates oil from small producers in the Ulyanovsk, Orenburg, and Samara regions...and is transferring it to the pipeline system."

Putin said the incident -- which caused Belarus, Poland, Germany, and Slovakia to stop accepting oil shipments on April 25 -- had caused "very serious" damage to Russia's image as an oil exporter as well as to the oil infrastructure.

Belarus, which is the first stop on the pipeline, halted deliveries amid concerns the bad oil could damage refineries. Several other countries followed as well.

Transneft said that oil deliveries had resumed on April 30.

The Slovak oil company Slovnaft said the same day that clean Russian oil from the Druzhba pipeline should be restored by mid-May, after an agreement was made with the Russian Energy Ministry.

There are estimated to be some 5 million tons of dirty oil in the export pipelines. Polluted oil in Belarus is being sent back to Russia by railroad.

Belarus said it could reach 60-70 percent capacity on its pipeline by May 10-11 but that it would take months to completely restore clean oil supplies.

The long outage could force refineries in Eastern Europe and Germany to cut operations and force Moscow to reduce oil production.

The significance of the damage caused is not fully clear.

Belarus, which processes Russian crude into refined products for sale abroad, estimated its loss from a reduction in product exports at $100 million.

It's unknown who will be liable for such losses.

The Druzhba pipeline can pump up to 1 million barrels per day, 1 percent of global crude demand.

With reporting by AP and Reuters
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