Kiev's energy market 'non-competitive'

PARIS, Feb. 11 (UPI) -- Oil refineries in Ukraine are up against stiff competition from neighboring countries that are selling oil more cheaply, an energy report from France said.

Anglo-Russian venture TNK-BP said it wasn't going to tie into a facility in Ukraine because it viewed the market there as "non-competitive," reports Bloomberg News. TNK-BP last year lost $59 million in Ukraine.

Russian oil producer Lukoil, meanwhile, closed its refinery in Odessa because of "untoward" market conditions in Ukraine, Bloomberg adds.

The International Energy Agency said in its monthly oil market report that Kiev is at a disadvantage because oil is cheaper elsewhere in the region.

"Ukrainian refineries face strong competition from oil product imports from neighboring Belarus and Kazakhstan, who supply local markets with fuels made from cheaper foreign crude," the agency said in a statement.

Kiev is trying to attract foreign suppliers to the energy market. A deal reached recently with Venezuela designates crude oil from Latin America for the Odessa-Brody pipeline.

The 419-mile pipeline had operated toward Russia following supply concerns. Russian oil is delivered to the Odessa-Brody pipeline from a junction of the Druzhba pipeline, the longest in the world.

Kiev said it was examining alternative suppliers to help shuttle oil through the pipeline in its intended direction.