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Ceturtdiena 20.09.2018 | Name days: Marianna, Ginters, Guntra

Latvia can obtain 20 million lats worth pipeline oil

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Latvia could claim the technological oil, currently in LatRosTrans owned pipelines, worth at least 20 millions.

It is not yet known if Latvia is to take the opportunity; however the matter was included in the government’s closed session. There is no information, whether the government discussed the situation around the oil pipeline in general or examined specific details of the legal ownership of the oil. The Prime Minister cannot comment upon the matter, as it would be illegal, given that the issue was a part of the closed session and is confidential, explains the Prime Minister’s press secretary Līga Krapāne.

Recently there have been passionate talks on Ventspils nafta subsidiary company LatRosTrans, the owner of the oil pipeline and its operator in Latvia, having started preparatory work to pump the oil out of the pipeline.

Despite LatRosTrans stresses the oil belongs to them, reliable sources of BNN say the statement is not true. The oil in the pipeline has not been reported in LatRosTrans balance, because when privatizing Ventspils nafta (when it was acquired by Vitol Group) it was not sold together with the company. If the oil had been included in the transaction, Ventspils nafta privatization deal would have been much more expensive, which was not desirable and acceptable.

Belorussians want the oil

Currently the most likely future owners of the valuable oil (there are several figures on the total amount of the oil in the pipeline, worth from 20 to 40 million lats) is Belarus and Latvia. Belarus has always raised international discussions on the ownership of the oil. What is also significant is the fact that part of the pipeline runs though Lithuania, which means the state could also claim some of the «oil money».

«As soon as the oil is pumped out an realized, Belarus will be righteous to object, if Ventspils nafta or Vitol try to realize it in global markets,» well informed persons said to BNN.

From the engineering perspective, pumping out the oil is necessary, say several experts. First of all, because water forms a small part of oil and at the moment it has already settled on the sides of the pipeline, resulting in increased risk of corrosion.

The pipeline would be better protected, if the oil were pumped out and the pipeline were filled with another inert substance. As estimated, such «operation» will cost several thousand lats, while the oil is worth much more.

Transneftj gives a sign

The passionate events surrounding the technological oil are important from another perspective, explains an expert. LatRosTrans minority shareholder is Russian pipeline monopoly Transneft, which had to approve the pumping out of the oil. Knowing that preparatory work has already been initiated, Transneft has done that, which means the company does not consider the Latvian oil pipeline as a serious market option for oil transit any more.


Leave a reply

  1. vcx says:

    Latvia misses its opportunity another time?

  2. Karcy says:

    That insight solves the pblroem. Thanks!

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