Russian companies settle row with Total over dirty oil supplies

Russian oil pipeline monopoly Transneft and producer Rosneft have reached a settlement with Total over dirty oil supplies to the French company’s Leune refinery in Germany, Transneft said.

Up to 5 MM tons of Russian oil in route to central Europe via the Druzhba pipeline were found to be contaminated last year. Total declared a force majeure in June 2019 on the production of jet fuel at its Leuna refinery in Germany following the supply of contaminated crude from Russia.

Transneft did not disclose how much compensation would be paid to Total.

The pipeline operator, headed by Nikolai Tokarev, a close ally of Russian President Vladimir Putin, had said it would pay compensation of no more than $15 per barrel.

It had been agreed that buyers such as BP, Shell , Total, Eni and PKN Orlen would put forward claims to Russian suppliers, while Transneft agreed to bear the brunt of the contamination-related costs.

Russian exporters, such as Rosneft, would then address buyers’ claims to Transneft for compensation.

Transneft has compensated Hungary’s MOL and all the Kazakh companies affected by crude oil contamination in its pipelines. Organic chlorides were found in Urals crude export flows in late April last year.

(Reporting by Vladimir Soldatkin; Editing by Susan Fenton)

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