Russian Sales Halted to Central Asia?

Share

Gazprom Neft will continue to supply the Kyrgyzstan market with lubricants, fuels and other petroleum products, the companys press service confirmed, denying reports in some local media that it had halted the exports to the Central Asian nation.

Regarding the complicated political situation in the country, Gazprom Neft temporarily ceased the supply of lubricants and other petroleum products to Kyrgyzstan, RBK daily reported last week. In the future, the company would consider doing business in Central Asia only through a partnership with another Russian state oil company, notably Rosneft, according to the business newspaper.

The Russian government plans to involve a subsidiary company of Rosneft, which along with Gazprom Neft could fulfill supplies not only on the Kyrgyz market, but to third parties, a source from the Kyrgyz government told RBK.

Gazprom Nefts presence in Kyrgyzstan is not for purposes of doing business only, but for political reasons as well. The company wants to share the risk that it faces in the region with another Russian oil major, said the source, a Kyrgyz energy ministry representative.

The company doesnt generate substantial profits: there is a backlog of unrealized payments, and the supply chain in the country is underdeveloped, Dmitry Abzalov, chief expert at the Center for Political Conjuncture in Moscow, told the daily.

However, Gazprom Neft denied that the supply to Kyrgyzstan was halted. We have always been and will be a main lubricants, fuels and other petroleum products supplier in the region, the companys press service told RIA Novosti information agency.

Since 2006, Gazprom has owned 70 percent of all gasoline stations in Bishkek, capital of Kyrgyzstan, and 35 percent of all gasoline stations in the country, where it sells its finished lubricants.

Another dimension of the problem is that Kyrgyz intermediaries were said to be using the American military base Manas, located in northern Kyrgyzstan, to sell Gazproms petroleum products to third countries. This angered the companys management.

Using its state oil giants, the Kremlin would like to obtain a stronger grip in Kyrgyzstan, a country exposed to the U.S. influence through its military base there, another analyst told the newspaper.

Ever since the base opened, Russia has opposed the U.S. military presence in the Central Asian region. Having control of petroleum products supply in the country, Russian oil companies would impose strategic dependence to the U.S. army in the region, Aleksey Panin of the Center for Political Information in Moscow told RBK.

Related Topics

Market Topics