Russia's Economic Development Ministry proposes removing refineries from vertically integrated oil companies
MOSCOW. May 30 (Interfax) - Russia's Economic Development Ministry is proposing to remove oil refineries from the rosters of vertically integrated oil companies in order to stabilize prices on the domestic market, the head of the ministry's department for developing competition, Alexander Pirozhenko, told journalists on Monday.
"Discussion has now started on the need to sell or, likely, remove refineries from vertically integrated oil companies. They [refineries] would start working with customer-supplied crude, which would help return the situation with competition to 2009's level," Pirozhenko said.
He added that the Energy Ministry has already given its positive assessment of this initiative and discussions have started on actual mechanisms for its realization.
"This may be either a sale or the spin-off from the corporate structure, transfer to management or long-term lease out. There are many scenarios that can be developed," he said.
When asked about how private oil companies could be made to release oil refineries, Pirozhenko said that the ministries are against harsh administrative measures. "We aren't discussing a force-out. Harsh administrative measures are now not under consideration," he said.
Later, Pirozhenko was quoted in a statement from the Economic Development Ministry as saying that a discussion proposal on this has been made by Energy Ministry.
"The Economic Development Ministry received an offer from the Energy Ministry to discuss the possible spin-off of oil refineries from vertically integrated oil companies for the purposes of developing competition on the petroleum market," he was quoted as saying.