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RIA Novosti: LUKoil unperturbed over possible loss of its American filling stations

12:29 | 09/ 08/ 2007 

MOSCOW. (RIA Novosti economic commentator Oleg Mityayev) – The scandal involving Russia’s largest private oil company LUKoil, which owns nearly 2,000 filling stations in the United States worth $4 billion, is far from over.

Green Oil, a small company from Illinois, filed suit in a district court of its home state on behalf of all American companies that buy fuel from American refineries for retail sale in the United States.

The respondents are Saudi Aramco, PdVSA and LUKoil, and their subsidiaries – LUKoil Americas and Getty Petroleum Marketing, Motiva (a joint enterprise of Saudi Aramco and Shell) and Citgo (wholly owned by PdVSA).

The Illinois-based company claims that Saudi Aramco (Saudi Arabia), PdVSA (Venezuela) and LUKoil (Russia) agreed to manipulate production levels and artificially raised prices of oil and oil products for many years, damaging independent U.S. filling stations that buy petroleum products from them.

Green Oil demands, in part, that LUKoil be stripped of its rights to its huge network of filling stations.

The American company is clearly trying to use the political situation in order to exert leverage on more successful foreign rivals.

Green Oil sustained losses from skyrocketing prices of oil and oil products. The winners in this situation – just as always – are large oil companies that have producing and refining assets, including the three defendants in the current suit.

However, the claim that LUKoil, Aramco and PdVSA conspired to raise prices of oil and oil products sounds ridiculous to me, as many other companies could be accused of the same sin.

According to Green Oil, in the first half of 2002 the three defendants agreed with companies in Oman, Mexico, Norway and Angola to cut back production in order to drive up wholesale prices of oil and oil products in the United States.

Even if we assume that this is true, the blame should be laid not only on the above three companies, but on all the firms involved in the collusion.

The American company also claims that many other international firms were involved in the conspiracy, including state-controlled Russian oil company Rosneft. Why then has it filed suit only against LUKoil, Aramco and PdVSA?

Very simple: the three companies are major players in the U.S. (Rosneft does not own a single filling station there) and, worse still, are foreign owned.

Green Oil apparently decided to play on current political sentiments in the U.S. in a bid to push from the market an Arab company, a company from the homeland of Hugo Chavez, who is building “socialism of the 21st century,” and a company from “unpredictable” Russia.

It demands that the three companies sell their refineries and filling stations in the United States. But how can this help bring down global oil prices?

Green Oil may try to use a psychological factor against LUKoil, which buys oil for its filling stations from American refineries. The Russian company is currently completing the rebranding of the filling stations it bought from Getty and Mobil, which is presumably irritating to Americans.

LUKoil does not appear alarmed by Green Oil’s suit. The Russian company has won several suits in U.S. courts filed against it by minor players on the local oil market.

The opinions expressed in this article are the author’s and do not necessarily represent those of RIA Novosti.

http://en.rian.ru/analysis/20070809/70675444.html

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