Russian oil supply stop unsettles Germany

Published: Feb. 25, 2008 at 9:48 AM
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BERLIN, Feb. 25 (UPI) -- A surprising oil delivery stop and an unwanted Russian intermediate firm have managed to increase Germany's concern over energy security.

It remains somewhat of a mystery what has caused Russian supplier Lukoil to stop exports to Germany for a second time in less than a year. At least one thing is clear, though: As in most energy rows Russia has had, the latest one is also about money.

Over the past weeks, the price for crude oil has risen above $100 a barrel, and thus, Lukoil's delivery stop hurts Germany even more. A spokesman of the refinery in Schwedt, eastern Germany, told German newspaper Die Welt that privately owned Lukoil, the second-largest oil firm in Russia after state-owned Rosneft, has reduced deliveries via the Druzhba pipeline by as much as 25 percent. A Lukoil spokeswoman said the delivery stop was aimed at getting higher prices for its pipeline oil.

According to Die Welt, the delivery stop is mainly aimed at eliminating Russian intermediate firm Sunimex, led by Russian entrepreneur Sergei Kishilov. Sunimex owns all the rights to oil deliveries to Germany via the Druzhba ("Friendship") pipeline. The company buys oil from Lukoil, then sells it to the likes of Shell, British Petroleum and Total, who together run the Schwedt refinery in eastern Germany.

Because it thinks Sunimex earns too much money from those intermediate services, Lukoil in the future would like to negotiate directly with Western firms in Germany, or with refineries there. Russian analysts claim the price Lukoil is getting for its pipeline oil is $2 to $3 a barrel less than for oil being shipped. The incident has managed to fuel Germany's doubts when it comes to the reliability of Russian energy supplies.

Russia is responsible for some 35 percent of Germany's oil imports.

On Friday, the situation seemed to have taken a turn for the better: Lukoil Vice President Leonid Fedun told Russian news agency Interfax his company hopes to resume supplying oil to Germany next month.

"We hope we are able to resolve the price issue and continue Lukoil oil deliveries to Germany in March," Fedun said.


© 2008 United Press International, Inc. All Rights Reserved.


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