TNK-BP Holds Talks With Buyers for Linik Refinery, Khan Says

TNK-BP Executive Director German Khan
TNK-BP Executive Director German Khan told reporters several offers have been made for the company's Linik oil refinery in Ukraine. Photographer: Andrey Rudakov/Bloomberg

TNK-BP, the Russian crude producer half-owned by BP Plc, is holding talks on selling its Linik oil refinery in Ukraine, after struggling to keep the plant profitable in the face of cheap fuel imports.

Several offers have been made, TNK-BP Executive Director German Khan told reporters today in Moscow, without naming the potential buyers. Khan is one of the billionaire shareholders who own the other 50 percent of TNK-BP.

TNK-BP decided to cut half of its staff in Ukraine and split the refinery into a separate unit after the operations lost money in the previous two years, according to an April 9 statement. The Linik refinery, in the city of Lisichansk, was halted indefinitely in March and the company’s retail outlets switched to imports, Khan said April 12.

The Moscow-based company had sought the introduction of quotas or duties on imported fuels from Ukraine’s government. Ukrainian refineries run by TNK-BP and Russian oil producer OAO Lukoil suffer from cheap imports from Belarus and Kazakhstan, the International Energy Agency said in February of last year.

The Ukrainian operations had a net loss of $68 million in 2010 and $23 million last year, according to the April 9 statement.

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