You're reading: Interior Ministry wants to take Odesa Oil Refinery from Russia’s VTB bank

Ukraine’s top cop Arsen Avakov wants the state to take over the Odesa Oil Refinery, a leading market player that once belonged to wanted businessman Serhiy Kurchenko, according to the minister’s March 31 Facebook post.

State-owned Russian bank VTB had subsequently secured the asset from
Kurchenko because of unpaid debts in what Avakov called a “very dubious scheme.”

“To put it mildly…we are getting ready to expose the fraud within the
formal procedure (of the ownership transfer from Kurchenko’s VETEK to VTB bank)
that would return ownership of the plant to Ukraine,” wrote Avakov.

But if the deal between Kurchenko and VTB had indeed
been conducted legitimately, it will be extremely difficult for Ukraine to take
way the Odesa refinery, said Integreties law firm counselor Denys Kytsenko. One
possible way to do this is cancelling the deal in court. However, the Interior
Ministry needs to prove that the deal violated the law, the lawyer said.

An Interior Ministry investigation clarified that the Odesa
Oil Refinery’s assets were taken over by an unspecified state-owned Russian
bank. Meanwhile, Odesa Governor Volodymyr Nemirovsky said that VTB secured the
plant because Kurcehnko had unpaid debt before the financial institution.

The refinery has a capacity to process 2.8 million tons of crude oil annually. It was shut down in
October 2010 due to the economic situation on Ukraine’s fuel market, as well as
changes in oil supply arrangements. Kurchenko’s
VETEK  purchased Odesa Oil Refinery from
Russian oil company Lukoil in February 2013 for $300 million using
money borrowed from VTB. The plant
only began producing oil in January 2014,
when Lukoil started providing small portions of oil to the plant. 

Korrespondent magazine
estimated Kurchenko’s wealth at $2.4 billion, but now his fortune may be substantially lesser as the
overthrow of Viktor Yanukovych’s regime brought tough times for Kurchenko’s
businesses. The latter was an associated of the
former president and his older son Oleksandr Yanukovych.

VETEK is a conglomerate
which manages businesses in energy, banking, media and sports sectors. Odesa
Oil Refinery, Brokbiznesbank, Real Bank, Ukrainian Media Holding and Metalist
football club are major VETEK assets. 

The company was a major player in the Ukrainian gasoline and liquid
natural gas market. VETEK has been purchasing almost all liquid gas provided by
state enterprise Ukrgazvydobuvannya through auctions during last two years. Kurchenko
also owns several entities abroad, such as Sparschwein gas
station company in Germany.

Kyiv Post staff writer
VladyslavGolovin can be reached at
[email protected].