Russia's Transneft and Rosneft Squabble Over Oil Contract Terms

Reuters

MOSCOW, Dec 29 (Reuters) – A longstanding dispute between Russia's Rosneft and pipeline monopoly Transneft has flared again this week, with the country's biggest oil producer holding out on signing a contract for 2017.

Transneft boss Nikolai Tokarev and Rosneft's Chief Executive Officer Igor Sechin, have been battling for influence, with the Transneft chief concerned by Rosneft's growing might.

Transneft has not yet agreed a deal with Rosneft for 2017 on transporting its oil and oil products, the company said late on Wednesday.

It ships over 90 percent of all Russian oil, while Rosneft accounts for more than 40 percent of the country's oil production.

"Rosneft is the only one (company) which has not signed deals on oil and oil product shipments with Transneft," Transneft spokesman Igor Dyomin said.

Rosneft has also lodged a claim with Moscow's Arbitration court against Transneft, a spokesman for the pipeline company said. The nature of claim is not clear and Rosneft declined to comment.

Interfax news agency said on Thursday the court had ruled against any move by Transneft to halt pipeline shipments of Rosneft's oil.

An industry source said the two have clashed over compensation payments from Transneft for so-called residual oil in the system.

They have also recently locked horns over transportation tariffs - Transneft's only source of revenue - related to the new Zapolyarye-Purpe pipeline in northern Russia.

Tokarev is a long-time ally of Putin. He and Sechin worked for the city of St Petersburg in the 1990s after the collapse of the Soviet Union.

(Reporting by Vladimir Soldatkin; editing by Jason Neely)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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