Russia cuts gas exports to Romania after Lukoil raid

By bne IntelliNews October 3, 2014

bne -

 

Romanian prosecutors raided the offices of Russian oil company Lukoil as part of an anti-corruption probe on October 2. Just hours later, Romania’s minister for energy, Razvan Nicolescu, announced that fellow Russian energy company Gazprom had cut gas supplies to Romania by 13%, despite an earlier promise from Russia’s ambassador to Romania that gas exports would not be reduced. 

Prosecutors and police worked alongside Romanian customs officials and members of the SRI intelligence service in the raid on the offices at Lukoil’s refinery near Ploiesti. The offices of Lukoil Energy & Gas Romania SRL, Lukoil Lubricants East Europe, Agentia Lukom-A-Romania and TP Log Services SRL were all targeted in the raid. 

The Ploiesti Court of Appeals’ prosecution office told Reuters that it was conducting inquiries into suspected tax evasion and money laundering. Losses of around €112m from tax evasion and a further €118m from money laundering are suspected. 

Lukoil acquired Romania’s Petrotel refinery in 1998 and now has some 200 petrol stations across the country. Petrotel has a share of around 20% of the Romanian fuel market. 

It is not clear whether there is any connection between the raid and the announcement later on October 2 that Gazprom had cut gas exports to Romania by 13%. Along with several other European countries, Russian gas exports to Romania have been cut in recent weeks. However, two days before the raid on Lukoil’s offices, Russia’s ambassador to Romania Oleg Malginov had assured Nicolescu and officials from state gas transmission company Transgaz that there would be no more cuts in supplies to Romania. 

As the largest oil and gas producer in eastern Europe, Romania is less dependent on Russian exports than nearby countries such as Hungary, Serbia, Bulgaria and Slovakia which receive at least 60% of their gas from Russia via Ukraine. 

However, with uncertainties about future supplies, Romania wants to reduce dependence on Russian exports and plans to substantially boost production through the development of its offshore Black Sea resources. Bucharest aims to be able to fully supply the local market with gas by  2020. The government also says it is committed to supporting neighbouring Moldova with gas exports via the newly built Iasi-Ungheni pipeline. 

Romania was one of the strongest advocates for EU sanctions against Russia over Ukraine, and the government has been pushing for a stronger Nato military presence in the Black Sea. Recently a new diplomatic row has erupted between Romania and Russia after Romanian Prime Minister Victor Ponta appeared to call for unification with Moldova by 2018 in a speech to supporters in September. The Russian foreign ministry said on September 16 that Ponta's comment was "irresponsible and unacceptable". Romanian President Traian Basescu has also spoken in favour of unification with Moldova. 

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