66670317203027126d10c04a ZAkUpF

Ukraine to nationalize plant belonging to ‘pro-Russian businessman’

The Odessa oil refinery will become state property, Kiev’s asset management agency has announced

The Ukrainian government has given the green light for the expropriation of the Odessa oil refinery, a major energy facility that has not operated in over a decade.

Progress with Kiev’s plan to seize the refinery was reported last Friday by Pavel Velikorechenin, the deputy head of the Ukrainian Asset Recovery and Management Agency (ARMA). It will be taken from a “pro-Russian businessman” and handed over to the state, which intends to develop the property, he said.

The factory located in the port city of Odessa was launched in 1937 and was a major industrial operation in Soviet Ukraine. In the late 1990s, Kiev decided to privatize it. Russian oil giant Lukoil purchased the refinery in 2000 and heavily invested in its modernization.

A decade later, changes in the Ukrainian market and issues with an oil pipeline, which was built to supply crude from Russia to the factory, undercut its profitability. The refinery stopped operations, and was bought in 2013 by Ukrainian multimillionaire Sergey Kurchenko through his energy group VETEK. He used a loan from the Russian bank VTB for the purchase, in which the factory served as collateral.

Read more

West closer to tapping $300bn in frozen Russian assets – US 

The following year, after a US-backed armed coup in Kiev put a new government in power, Kurchenko fled the country, ultimately picking Russia as his new place of residence.

The new Ukrainian authorities declared the purchase to have been fraudulent, and said they would seek its confiscation. Kurchenko was separately targeted by a criminal investigation for alleged tax evasion and money laundering.

The Ukrainian government announced the confiscation of Kurchenko’s property in 2017, but the businessman challenged the move in court. In 2019, officials in Odessa Region reported that the plant’s equipment had significantly degraded because the owner had failed to properly maintain the refinery.

 

Leave a Reply

Your email address will not be published. Required fields are marked *