January 18, 2013 / 2:36 PM / 7 years ago

Russian trader Souz loses Urals business in January

MOSCOW, Jan 18 (Reuters) - Souz Petrolium, an oil trader affiliated with Russian port investor Summa, will handle no Urals crude oil in January, traders said, feeding speculation Souz may be losing its grip on trade to some European destinations.

The trader’s loss of lucrative business this month via the Soviet-built Druzhba pipeline is a sign of shifting alliances in the export of Russia’s Urals blend, one of the world’s largest and most stable streams of crude oil.

Souz is the second home-grown trade house with ties to Russian tycoons to be dislodged from an entrenched position in the export of oil after Gennady Timchenko’s Gunvor, which once handled as much as 40 percent of seaborne Urals crude.

Summa is the vehicle of Ziyavudin Magomedov, a port and construction magnate who controls the largest shareholding in Russia’s main port group, Novorossiisk Commercial Sea Port , together with Transneft, the Russian pipeline monopoly.

In January, Hungary, Slovakia and Poland, whose refiners were longtime buyers of Russian crude oil delivered by Souz via the Druzhba (Russian for “Friendship”), switched to other suppliers. Souz has shipped no crude to those destinations this month, several sources told Reuters.

Souz also lost a tender to buy 140,000 tonnes of Urals crude oil from Bashneft to be shipped from Novorossiysk at the end of January.


The cargo went to international oil trader Vitol, even though Souz had dominated previous Bashneft tenders and had been seen as Bashneft’s preferred buyer.

“Souz Petrolium participated in the (January) tender on the same terms as other bidders,” a trading source said.

Market players said Bashneft switched traders because it wanted to serve other export destinations.

“Bashneft was having trouble getting the (export) schedule for the destinations it wanted, and it may hold the trader responsible for that,” a source at a large trading house said.

Officials at Souz Petrolium could not be reached for comment.

Tatneft also shunned Souz in January. Tatneft and Bashneft instead chose smaller Russian houses to handle shipments to Slovakia and Hungary, traders said.

“Tatneft is shipping to Hungary via (traders) Efremov Kautschuk and Normeston, and Bashneft ships directly to Normeston,” a source familiar with the matter said.

Another source said Bashneft had signed an agreement with Normeston for deliveries to Slovakia and Hungary in 2013 with an option to decide on monthly volumes.

There was no sign of Souz on the Polish market either, traders said.

Last year, the trader agreed to ship around 1.8 million tonnes each quarter to refiner PKN Orlen, but this year the contracted volume was down to just 600,000 tonnes after one of the long-term agreements expired.

Bashneft and Tatneft are expected to ship to Poland some 200,000 tonnes of Urals a month in the first quarter, according to the quarterly schedule, but as of Jan. 16 pipeline operator Transneft had not cleared either company to send any crude to Poland via the Druzhba pipeline, traders said. (Writing by Denis Pshenichnikov; Editing by Melissa Akin and Jane Baird)

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