LUKOIL HAS TO SUSPEND OPERATIONS AT ODESSA REFINERY 

The LUKOIL management decided to suspend operations at Odessa Refinery (Ukraine) incorporated in LUKOIL Group.

This forced decision was prompted by the activities of the Ukrainian company OAO 'Ukrtransnafta' which ceased to pump oil via the route Lisichansk - Kremenchug - Odessa Refinery on October 1, 2009.  

The other oil delivery routes to Odessa Refinery suggested by OAO 'Ukrtransnafta' would considerably increase oilstock prices and cause losses, LUKOIL specialists believe. For instance, an alternative route, Belarussian border - Brody - Odessa, would increase transportation costs by USD 5.7 per ton.  

Besides, ОАО 'АК Transneft' is technically incapable of ensuring uninterrupted oil deliveries to Odessa Refinery via other routes in October, 2009.

Thus, LUKOIL has to suspend operations at the refinery for an uncertain period and cease petroleum products manufacturing.

Presently, the LUKOIL management are doing their best to resolve the problem and resume operations.