Ceska Rafinerska still struggling to agree on crude transport with Mero

By bne IntelliNews January 4, 2016

Ceska Rafinerska has agreed conditions on a new transport deal with state-owned oil pipeline operator Mero, Unipetrol - owner of the Czech Republic’s sole refiner - announced on January 4. However, the final terms are yet to be hammered out, with Prague and the refiner's Polish owner having danced around the issue of control for some time.

The two companies agreed on the conditions of transportation of crude oil into the Czech Republic via the IKL and Druzhba pipelines, the Czech sections of which are operated by Mero. The open-ended contract entered into effect on January 1, 2016.

However, talks between Ceska Rafinerska and Mero about transport fees continue, and a final agreement is not expected until the end of March. Transport fees have been a sticking point in negotiations going back to 2010.

Ceska Rafinerska  operates the country’s two oil refineries in Litvinov and Kralupy. The pair has a combined capacity of 8.7mn tonnes of crude per year. The Druzhba carries Russian oil to Litvinov while IKL links Kralupy to Adriatic terminals.

Unipetrol, owned by state-owned Polish oil company PKN Orlen has played a leading role at Ceska Rafinerska for some years, and bought full control in 2014. Czech governments, meanwhile, have long lusted to retake control of the refiner. The high fees charged by Mero, and state-owned oil products storage company and processor Cepro, have helped weaken profitability at Ceska Rafinerska and deter PKN from investment.

That has led to much speculation over potential ownership deals. Prague has mooted a push to take control via Cepro and Mero. On the other hand, PKN has suggested a merger, only with the Polish company retaining a controlling stake.

The Czech government insists Mero and Cepro are strategic assets and the state should keep control. Prague has expressed interest in buying Kralupy, but Unipetrol says it has no interest in selling. In September Czech media suggested that Cepro could join forces with energy holding EPH to buy Unipetrol.  

 

Related Articles

Latvia issues permits to new gas infrastructure holding

The Latvian Public Utilities Commission (SPRK) announced on January 5 that it has issued licences to Conexus Baltic Grid for the transmission and storage of gas. Conexus Baltic Grid will control ... more

Iran to seek arbitration over termination of gas flow from Turkmenistan

The National Iranian Gas Company (NIGC) intends to take its recent gas dispute with Turkmenistan to international arbitration, Mehr News Agency reported on January 4, citing ... more

CEZ ignores Czech finance minister and re-elects CEO

The supervisory board at Czech power group CEZ ignored pressure from the finance ministry to dump the current management, local media report. Finance Minister Andrej Babis has been accumulating ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss