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The pollution of the Druzhba oil pipeline with organochlorine compounds will shortly be the subject of a legal proceeding that will take place in Samara. Defendants include Svetlana Balabay, director of Nefteperevalka LLC; Vladimir Zhogolev, general director of Petroneft Aktiv LLC; and Sergey Balandin, deputy director of Magistral LLC. They are accused of violating several provisions of the Criminal Code of the Russian Federation, one of which is titled “organized criminal community.”

Druzhba oil pipeline polluted with organochlorine substances

At the end of January of this year, the criminal case that involves the pollution of the Druzhba oil pipeline with organochlorine substances was brought before the Volzhsky Court in Samara. Following two separate requests for postponement, the preliminary hearing will now take place on March 21.

It was in the month of April 2019 when the accident occurred at the Druzhba oil pipeline. First, the Belarusian company known as “Belneftekhim” reported a significant drop in the quality of the oil that was imported from Russia and transported through the pipeline. Afterwards, the transit of raw materials from Russia to Europe was halted. After then, Transneft announced that the oil that was exported had been purposefully tainted with organochlorine chemicals. After some time had passed, the Investigative Committee of Russia (TFR) issued a report stating that low-quality oil had been introduced into the pipeline through an oil discharge unit that was situated close to the settlement of Nikolaevka in the Volzhsky District of the Samara Region.

The investigation into the alleged criminal activity was taken up by the TFR division in charge of the Samara region. According to the preliminary findings of the investigation, the defendants—General Director of Nefteperevalka LLC Svetlana Balabay,

Deputy General Director of Nefteperevalka LLC Rustam Khusnutdinov, General Director of Petroneft Aktiv LLC Vladimir Zhogolev, and Deputy Director of Magistral LLC Sergey Balandin—in the time period of August 2018 to April 2019, as members of a criminal community, repeatedly stole. Later on, information about additional suspects came to light. One of these was Roman Gladkov, the head of the acceptance point known as “Lopatino” (PSP). According to the investigators, Gladkov was paid by the head of Soyuz-Neft LLC in exchange for his assistance in receiving a mixture of crude oil and refined products from Nefteperevalka.

According to the investigation, another defendant in the case, Dmitry Nikishov, who is the deputy head of the Kuibyshev district department of Transneft-Druzhba for commodity and transport operations, received illegal remuneration for inaction that was transferred from Roman Gladkov and Sergey Balandin.

Accusations against Svetlana Balabay

Svetlana Balabay is accused of violating four articles of the Criminal Code of the Russian Federation: art. 167 (damage to property or intentional destruction); art. 159 (fraud); art. 215.3 (unauthorised connection to oil pipelines); and art. 210 (illegal possession of a firearm) (participation in a criminal community). In accordance with Article 167 and Article 215.3 of the Criminal Code of the Russian Federation, Rustam Khusnutdinov was charged with a crime. Roman Gladkov is being investigated in connection with many violations of the Criminal Code of the Russian Federation,

specifically the 167th, 210th, and 204th (commercial bribery) articles as well as the 215.3 and 159th provisions. Vladimir Zhogolev is being investigated for violations of Art. 167, 159, 215.3, and 210. In the beginning of the year 2020, the preventative measure that was imposed on Svetlana Balabay, Rustam Khusnutdinov, and Vladimir Zhogolev was changed to a prohibition on a number of activities. The length of time that Roman Gladkov is required to remain under house arrest was extended by the court.

Conclusions For Druzhba

Due to the unique nature of the Russian state and the lack of openness in the energy sector (as well as its frequent use for political goals), it is impossible to render a definitive evaluation of the current crisis. It is possible that the oil contamination was produced by the actions of tiny oil producers in Russia, but political motivation cannot be ruled out, especially when taking into account the political tensions between Russia, Belarus, and Ukraine.

The oil crisis may present a chance for more profound changes in the Russian oil sector, including the ownership of the Russian transmission network. Presently, Transneft owns and operates practically all oil pipelines; in recent years, there have been speculations that Rosneft is interested in acquiring shares in Transneft, which would give it control of the Russian portion of the transmission system.

Uncertain is the time necessary to clean at least one of the two branches of Druzhba. For the next several months, it is anticipated that less oil will reach consumers, which may necessitate a decrease in production at some refineries.

This applies especially to those facilities (Litvnov, Bratislava, and Leuna) with restricted access to alternative suppliers in sufficient amounts. According to a more optimistic scenario, the transmission may be resumed at approximately 65 per cent of the pipeline’s capacity. The situation caused by the closing of the Druzhba pipeline reveals all the oil security weaknesses of the nations that receive Russian oil from the pipeline; therefore, this incident can be viewed as another “stress test.”

Despite several meetings between the operators of the Belarusian, Ukrainian, and Polish parts of the Druzhba pipeline and Transneft, no mention of monetary compensation has been made. For the Russian side, limiting oil supplies to Central European consumers will incur losses, both financially (which cannot be estimated until better data is obtained on how much individual customers’ supplies have been affected) and in terms of image, which will result in some countries increasing their efforts to diversify their supplies (including Poland).


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