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Rosneft to seek compensation from Transneft for drop in oil output

Published 09/08/2019, 20:05
Updated 09/08/2019, 20:11
Rosneft to seek compensation from Transneft for drop in oil output
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MOSCOW (Reuters) - Russia's biggest oil producer Rosneft (MM:ROSN) said for the first time that it will claim compensation from pipeline monopoly Transneft (MM:TRNF_p) for a drop in oil output due to the contamination in the Transneft network earlier this year.

The contamination, first discovered in April in Belarus, led to the stoppage of Russian oil exports via the 1 million barrels-per-day Druzhba pipeline and a reduction in oil production in Russia, one of the world's top producers of crude.

In a rare comment on the oil contamination issue, Rosneft said on Friday in its second-quarter results based on Russian accounting standards that the company will include losses from the fall in oil output in an estimate of damages from the contamination.

The company said it had been forced to reduce the output of oil because the Transneft pipeline network was unable to transport it.

"A calculation of losses can be completed after a complex estimation of implications ... including forced reduction of oil output in that period due to reduction of intake of oil into the Transneft network ... reception of full and documented claims from contractors and readdressing them to Transneft," Rosneft said.

At the end of July, Transneft set a cap of $15 per barrel on compensation for contamination, drawing scepticism from transit country Belarus and criticism from some buyers that the offer was too low.

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