Transneft and Rosneft settled mutual claims related to pollution of Druzhba

As Kommersant found out, Transneft was able to settle with Rosneft a set of mutual claims related to the pollution of the Druzhba oil pipeline. The parties agreed that by the end of May 2025, Rosneft will be able to receive compensation from Transneft for the losses of its foreign clients, if they are proven, but its maximum amount will not exceed $15 per barrel. Formally, the deadline for filing claims expired in May 2022. Rosneft will drop its claim against Transneft for 11 billion rubles, and Transneft will drop its claims against the oil company.

“Kommersant” became aware of the details of the settlement of disagreements between Transneft and Rosneft over the incident with organochlorine pollution of the Druzhba oil pipeline, which occurred in 2019. Then contaminated oil damaged the equipment of the Mozyr refinery in Belarus, and Transneft and European buyers in Poland, Germany, Hungary and the Czech Republic stockpiled slop oil for many months, gradually mixing it with clean oil so that it can be processed.

Transneft assumed obligations to compensate for the damage, but within the limits of $15 per barrel of contaminated oil. With other large Russian oil companies, the issue was resolved relatively quickly, but Rosneft could not agree on the amount of compensation with its foreign clients for a long time. By May 2022, claims for more than $170 million were settled, of which $75 million related to Rosneft’s losses, including claims from Total, Trafigura and the Mozyr Oil Refinery. For a number of Rosneft clients, the issue of the amount of compensation and confirmation of losses remained unresolved, while in May 2022 a three-year statute of limitations expired.

Then Rosneft filed a lawsuit, demanding that Transneft return $120.9 million, €47.6 thousand, 5.5 thousand pounds sterling, 73.9 million Polish zlotys and 3.4 billion rubles. (more than 11 billion rubles in total) of losses from the claims of foreign buyers and lost profits due to the stoppage of pumping due to pollution of the Druzhba. In December 2022, the court rejected Rosneft’s claims, but Rosneft appealed the decision. In August 2022, Transneft filed a lawsuit against Rosneft for 2 billion rubles. for non-payment of oil storage and accrued penalties.

According to Kommersant’s sources, within the framework of the agreements, Rosneft will waive legal claims against Transneft.

At the same time, Transneft undertakes to extend the period in which it will be ready to compensate Rosneft for losses for contaminated oil – until the end of May 2025. Payments will be made subject to sufficient documentary evidence or court decisions and, as in other cases, will not exceed $15 per barrel. However, if foreign buyers of Rosneft’s oil demand compensation from it for more than $15 per barrel and prove the validity of their claims in court, then Rosneft’s losses can be compensated by a separate decision of the government in excess of the limit approved by Transneft. Transneft and Rosneft did not comment on this.

Transneft also undertakes to drop the claim for 2 billion rubles. for oil storage, after Rosneft covers part of the amount – about 400 million rubles. Note that the consideration of disputes filed in 2022 was repeatedly postponed and is now scheduled for October 3 and 2, respectively.

The interlocutors of Kommersant seriously started talking about the fact that Rosneft and Transneft could come to a compromise back in March, when it became known about the meeting between the heads of the companies Igor Sechin and Nikolai Tokarev. On August 17, the official representative of Transneft, Igor Demin, confirmed TASSthat “on a number of controversial issues, agreements and agreements have been reached,” but did not disclose the details.

In addition, at the end of 2022, Transneft filed two more lawsuits against Rosneft and Bashneft controlled by it with demands for 400 million rubles each. As the pipeline company stated at the time, the claims were related to the failure to fulfill contractual obligations regarding the volumes of delivery and transportation of petroleum products in 2020 and 2021. Transneft has already dropped one of these claims, and it is expected that the same will happen in the second case.

According to Russian law, a period of three years was set for shippers’ claims against Transneft, Stanislav Dabizha, senior lawyer at Kazakov and Partners, notes. The expiration of the statute of limitations under Russian law is an independent ground for refusal of a claim, but does not prevent claims. With regard to the participants in this dispute, it cannot be said that one of them is a “weak party”, the lawyer believes, therefore the agreement concluded should be considered equivalent, concluded in compliance with the balance of interests of the parties.

Dmitry Kozlov