|TOPIC OF THE ISSUE|
|FULL STEAM AHEAD|
The development of Kazakhstan's oil industry, which was strangled by a shortage of export capacities in the late 1990s, is gaining stronger support these days as the country continues implementing its multidirectional export strategy.
|BELNEFTEKHIM: THE BACKBONE OF THE INDUSTRY|
FSU oil professionals remember well the 1990s with all the difficulties inherent in a period of economic transition. That was the time when traditional industry links were breaking down, giving way to the rough realities of the market economy. The general condition of the CIS and the Baltic states' petroleum and petrochemical industry was greatly influenced by the global growth of oil prices. The surge in oil demand and the resulting expansion of export shipments dealt a significant blow to oil refining and petrochemical industries — the states with scarce oil resources have found themselves in the back seat. However, the back seat is better than no seat at all, as proven by the example of Belarus.
|Odessa–Brody: reverse decided?|
Ukraine's government decision to reverse Odessa–Brody still looks ambiguous. Governmental resolution #831 of 5 July 2004 was very brief. It merely excluded the words «in the direction from Odessa to Brody» from the text of its resolution #114 approved in February this year. The document still keeps the door ajar for would-be shippers in both directions. However, ample comments on the resolution have already dubbed the government move as a definite U-turn of the pipeline in the reverse direction. In any case, either alternative has a tail of unresolved issues. It just could be that the decision, now seen as favouring the reverse option, will impair the plans of those on the Russian side who had initiated and kept lobbying for reversal.
|AN ODD APPROACH OF IKRZALIZNYTSYA|
On the 1 July 2004 Ukrzaliznytsya has almost halved (to $11.73–12.94 per tonne) the transit tariffs for rail shipments of Russian and Kazakh crude and fuel oil to Odessa terminal. The figures drop by additional 12–23% if a company ships over 250,000 tonnes of oil or over 100,000 tonnes of fuel oil. At the same time, oil products tariff reached $9.75 per tonne, while the tariffs levied on oil shipments going to Feodosia petroleum storage facility remain unchanged.
|Russian crude to bypass the Turkish straits|
At the 28 May meeting, Transneft's board of directors approved the company's participation in construction of Kiyikoy–Ibrikhaba oil trunk pipeline, which will bypass the Turkish Straits . The project offers the best value, being the shortest route out of all studied (193km, some 120 miles).
|Worth more than crude|
Some experts estimate the annual surge in demand for petrochemistry production at a level of 5–6% up to 2020, compared with only a 1.7% average annual rise in demand for crude oil. The expansion of the global petrochemical market presents Russian companies with a viable opportunity for raising export shipments — investing in the industry, the companies discover that selling petrochemicals could well be more profitable than selling crude.
|HALF OF THE DISTANCE|
Interim half-year export data looks impressive. And there are all indications that the shipments will continue to grow.
|Is there life after death?|
«Putin is the guarantor of stable business in the near-term. This is the horizon visible until 2008. So, in this view there are those to be offered our help. But this does not mean that we have to agree with everyone and to everything. Businessmen do both things that are right and things that are wrong. And in the same way, until 2008 Putin is fated to do both right and wrong things».
|Prospects of submersible ejector-pump systems deployment in oil production|
Exploitation of the wells employing installations with submersible electric-centrifugal pumps (SECP) represents the most widely-used by Russian companies oil production method. Over the past 20 years share of crude oil pumped up by SECP more than doubled. This tendency undoubtedly will remain. SECP installations in leading Western Siberian companies now account for some 80–95% of oil output.
Lukoil dubs isomerisation on Odessa refinery as the start of a new stage in the refinery's development. The launch of the first isomerisation facility in Ukraine at the Odessa refinery on 30 June 2004 completed Lukoil's implementation of investment obligations stipulated by the privatisation tender on the sale of controlling stake of the Odessa refinery in 1999. However, Lukoil has stated that the event marks a start of a new era in the refinery's development. Indeed, the Odessa plant has its share of problems, even more so than other Ukrainian refineries. At the same time, the distinctive feature of the Odessa refinery lies in the fact that reconstruction and modernisation of the plant are tagged to operational requirements, as testified by the recent launch of the isomerisation facility. Lukoil's experience shows that if an oil company really wants to upgrade production, the most challenging facilities can be put online in less than a year. It appears that Lukoil's refining business has gained the lead over all other Russian oil companies, although there is much work still to be done.