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Refiner Slovnaft to cut Russian oil intake to 60%

Refiner Slovnaft to cut Russian oil intake to 60%
By Reuters
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PRAGUE - Slovakia's sole oil refiner Slovnaft will cut the share of Russian oil in its processing activities next year to about 60% from about 95% and use other blends to comply with sanctions on Russia, the company said.

Slovnaft, which is owned by Hungary's MOL and processes 124,000 barrels per day (bpd) and exports its products across central Europe, has been using Russian oil supplied by the Druzhba pipeline but is accelerating modifications to use other blends.

The shift is in response to the looming European Union embargo on Russian crude oil imports, which aims to halt 90% of Russia's crude imports into the 27-nation bloc.

Slovakia, along with Hungary and the Czech Republic, secured exemptions for essential pipeline imports. The exemptions, however, do not cover most exports of fuels produced from Russian oil, which is problematic for Slovnaft.

Slovnaft told Reuters it will be able to keep a proportion of Russian oil in its mix thanks to exceptions covering the Slovak market, and initially fuel exports to the Czech Republic.

"We assume that as long as our market share on the domestic market and in the Czech Republic is maintained, next year we may process approximately 60% of the annual volume with REBCO (Russian blend) and the rest should be alternative, for export purposes," said Slovnaft spokesman Anton Molnar, adding that it aims to keep the processing capacity similar to current levels.

The exception covering exports to the Czech Republic expires on Dec. 5 next year, which will force Slovnaft to further reduce its use of Russian oil.

Slovnaft exports about 62% of its diesel, including 27% to the Czech Republic and 20% to Austria. It also exports most of its petrol, jet fuels, polymers and sulphur.

"2023 will not be easy, and processing complications may become apparent only during operation itself," the company added.

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