Ukraine court seizes Odessa refinery -ministry

KIEV, April 22 Tue Apr 22, 2014 11:49am EDT

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KIEV, April 22 (Reuters) - A Ukrainian court has seized an oil refinery in Odessa, the country's third largest, the Ukrainian Interior Ministry said on Tuesday.

It cited an investigation into fuel duty fraud but gave few details. The plant has also been at risk of being drawn into the bitter confrontation between Ukraine and Russia.

Ownership of the refinery is in question after a report it had been acquired by a Russian bank and the Ukrainian government which took power following the overthrow of the Kremlin-backed president in February has said it wants control of the refinery.

The Interior Ministry said in a statement that unnamed companies evaded import duties and taxes by fraudulently claiming to have re-exported fuel that was in fact sold on the domestic market.

"Investigators impounded more than 75,000 tonnes of fuel to reimburse losses. In addition, the court decided to arrest property and land of the Odessa Oil Refinery," the ministry said, adding the order would take effect on April 24.

The ministry did not say which court issued the ruling and gave no more details.

Ukrainian energy firm Vetek bought the refinery from Lukoil of Russia last year. But Russian newspaper Kommersant said last month that Vetek transferred the plant to Russian state-controlled bank VTB after failing to repay a loan used to buy the plant.

Vetek and VTB have declined to comment on the report.

Last month, the new interior minister, Arsen Avakov, said that the government which took over from ousted president Viktor Yanukovich wanted to regain control of the Odessa refinery, which was privatised some years ago.

Ukraine's prosecutor general last month issued an arrest warrant for Vetek chairman Serhiy Kurchenko in a separate case on suspicion of stealing state property. Kurchenko's whereabouts are unknown.

Prosecutors said the business activities of Kurchenko, whose industrial empire grew rapidly under Yanukovich, had inflicted over $100 million of damage to Ukraine's national interests.

Ukraine operates seven large oil and gas refineries but only two them are processing oil on regular basis. The Odessa refinery on the Black Sea, with a capacity of 70,000 barrels per day, suspended its oil processing in late February. (Reporting by Pavel Polityuk; Editing by Alastair Macdonald and David Evans)

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