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Rosneft faces USD100-MM bill to boost safety at Bashneft refineries

February 15/2017

MOSCOW (MRC) -- Russia's top oil producer Rosneft will have to spend up to USD100 million to improve standards at ageing refineries it bought last year, industry sources have told Reuters.

Rosneft took control of the sites in October when it bought a 50 percent stake in Bashneft for USD5.7 billion as part of Russian privatization efforts.

Now it must address safety concerns after a string of incidents over the last year, including a fire last week, and investigations by Russian industrial safety watchdog Rostekhnadzor.

At least six people died in a fire at a Bashneft plant last July. The company said no one was hurt after a fire at its Ufa refinery last Thursday.

"According to preliminary information, the reasons behind persistent accidents have been breaches in industry safety standards related to organization and carrying out maintenance, servicing, technical diagnosis and checks," Rostekhnadzor said in a statement.

A source at the company said it would need USD100 million to upgrade the plants. Another source, familiar with Bashneft's plans, confirmed the scale of possible financing.

Rosneft said it had prepared a program "to eliminate the irregularities which have been found. To eliminate some irregularities, reconstruction and technical re-equipment of the industrial units is needed."

"A significant number of the facilities have been in an unsatisfactory condition," it said.

As MRC informed earlier, Rosneft has signed a contract to supply 96 MMt of crude oil to PV Oil, an affiliate of state oil and gas PetroVietnam, starting in 2017.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russias third-largest oil producer at the time.
Author:Anna Larionova
Tags:petroleum products, petrochemistry, Crude oil, Rosneft.
Category:General News
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