Lukoil may reject constructing an oil products plant in Kazakhstan

The largest Russian private oil company Lukoil may abandon the construction of a high-tech plant on the production of industrial and motor oils in Kazakhstan, which products, as it was stated, can replace oil, made by foreign companies, from local and Russian markets, the Izvestia reports.

The main reason is that the Vagit Alekperov’s company can’t avoid the ban on imports of base oil components from Russia to Kazakhstan, prolonged at the end of May 2014, as well as a ban on exports of heavy oil products (which includes oils too) outside the Customs Union.

As Maxim Bobin, advisor general director of LLK-International (Lukoil’s subsidiary), explained, the inability to export products to the premium segment of Asia and to China narrows the sales market for products of the plant to the borders of the Customs Union: Russia, Belarus and Kazakhstan. This casts doubt on the profitability of investments in such large project.