Embezzlement Ring Alleged at Refinery


Embezzlement Ring Alleged at Refinery
© macrovector; Lianez

A group of 20 employees at Lukoil’s Volgograd refinery – which has a lubricant blending plant – was accused last week of stealing motor oil throughout 2018, according to the region’s prosecutor office. Authorities so far have arrested three of the employees involved.

Losses for the company amounted to 15.5 million rubles (U.S. $211,500), the prosecutor’s office alleged in a news release.

Authorities have already arrested and indicted three employees – a female working as pump station operator, andtwo males who were part of the refinery’s internal security and territory protection services.

The defendants confessed to the crime and agreed to cooperate with the investigation in exchange for potential pleas for leniency, the prosecutor said. Otherwise, they face 10 years prison time each.

According to the press release, the group created a criminal ring for siphoning off finished products, primarily motor oils, from the refinery storage tanks by using trailer tank cisterns. Then, tractors with false registration tags pulled the cisterns and transported them to other regions such as Rostov and Kalmikiya, where the motor oils were sold for cash. The accomplices divided the money between them.

The refinery’s security service discovered the theft and turned the case over to police and  the Russian Federal Security Service.  

The investigation continues into the rest of the group, all of whom worked in other departments of the refinery or were employed by the refinery’s security service.

The authorities said that in the course of the investigation they confiscated real estate, vehicles and money worth a total 20 million rubles.

In Russia, internal theft is most common in the retail sector, as well as in the banking, insurance and social services sectors, along with the oil and gas industry. According to KPMG consultancy, “In [Russia’s] oil and gas sector, as result of theft of raw materials and products, above-level losses occur in the transportation and in the interplant movement of the products, with [siphoning from] pipelines and with uncontrolled movement of the transport vehicles,” the company said in a recent report titled Risk Management and Counteracting Fraud.

The consultancy said that losses also occur with use of unsanctioned changes in the technical parameters in the equipment or with unsanctioned changes in the documentation, as well as with fabrication of material balance sheets or incorrect calculations.

Lukoil’s Volgograd refinery has a base oil plant that can produce up to 520,000 tons per year of [API] Group I, 220,000 t/y of Group II and 30,000 t/y of Group III base oils. Within the refinery, the company operates lubricant and grease production units.

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