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Certain Messages from Mr. Nikolay Tokarev, Transneft President

Date of publication: 28 December 2017 Printable version

Transneft President Nikolay Tokarev gave an interview to Russia 24 TV Channel.

On Investment Program

The scope of Transneft Investment Program up to 2018 is decreased by 30% , to RUB 56 billion, due to the gradual scheduled  reduction in new projects, not because of dividend payments, told Nikolay P. Tokarev in his interview to the TV channel.

“The new construction investment program was squeezed to RUB 56 billion, because we have completed all new major facilities and are stripping off the investment program significantly, and not because we paid or expect to pay greater dividends.  So, the figure of RUB 56 billion is what we have envisaged a year ago”, he noted.

Change in Transneft Oil Pumping Rate

Nikolay Tokarev also reported that the company drafted the feasibility studies for 20% oil pumping rate increase in 2018, but the Government accepted 3.95% increase only.

“We assumed an approximately 20% increase, but the Government accepted 3.95% increase only. This calculation was well substantiated. This figure is reasonable, it was calculated and is derived from the particular market environment, the cost of services”, Transneft President noted.

“We have discussed this issue many times in the Government, the ministry, and the FAS (Federal Antimonopoly Service). Of course, such increase does not suit us because it does not correlate with the electricity tariff growth and the rise in the contractors’ service tariffs,” he said.

The rate increase below the figure proposed by the Company will not influence the salary of Transneft workers and employees, nor will it entail staff cuts,” added Nikolay Tokarev.

“We are going to reduce operational expenses, improve technological processes, shift to a more efficient pumping model.  These are the critical drivers for saving our money”, he said. 

Reduction in oil pumping tariff in Chinese direction

Transneft has no plans to dispute FAS  decision on 16.7% oil pumping tariff reduction in Chinese direction, across Kazakhstan,  because it was agreed upon by the Government, told Nikolay Tokarev to the TV channel.

“The shareholder backed up FAS decision and opted to support Rosneft decision in such selective way. The shareholder’s wish is a must for us, though nobody told us why they opted to do so”, he said when asked if the Company would dispute the decision.

According to Transneft President, the situation with the resolution on the tariff to Kazakhstan is paradoxical. “Just imagine:  two people are standing in the queue to the box office. The first says: “I need a ticket to point A”.  The second adds: “So do I, but I will pay just a portion of the money, and the rest will be paid by the first guy who has just been here”. Why so, why the first one should pay is not explained.  However, it is FAS that explains and listens to all this and says: “A very good offer, let it be this way”.

Nikolay Tokarev noted that the Company would overcome all difficulties that the adopted resolution could entail. “Yes, we will feel some financial result, a negative one, based on this, but it is not lethal”, he added.

Oil and petroleum product pipeline transport

Transneft President also noted that the oil and petroleum product pipeline transport bill had been submitted to the Russian Government, and the necessary procedures would be taken.

“We managed to submit the draft bill to the government, and the coordination procedures are going to be held at the governmental level.  There is the Presidential assignment, to adopt the bill”, Nikolay Tokarev noted.

According to him, this bill is necessary to regulate all sections pertaining to the oil quality, relations between producing and transporting companies, oil losses and oil pipeline protection areas.  They have tried to address these issues since the 1990’s, but the project is pending discussion so far”, the Company’s President noted.

“In my opinion, it is the dinosaur of the  boisterous 1990’s when  no limitations, restrictions existed, and everyone tried to succeed where he could. Some people feel like reviving this anything-goes attitude, which is a major hindrance to the bill adoption”, explained Nikolay Tokarev.

Hydrocarbon Use Prospects

Speaking to Russia 24 journalist, Mr. Nikolay Tokarev also voiced the opinion that oil will remain the most demanded source in motor fuel production, and hydrocarbons in general– for electricity generation worldwide, at least until the end of 2040’s.

“In our planning horizon of up to 30 years,  oil will remain the most demanded energy source”, he replied when asked if pipeline construction and expansion to Europe where electric vehicles are becoming more common is feasible. 

According to the Company’s President, the shift to electrically-driven cars is a very attractive idea in terms of environment; however, such vehicles cannot be mass produced instantaneously, despite all manufacturers’ efforts. In addition to that, the use of electric driven cars is associated with electricity generation that requires hydrocarbon resources since the alternative sources still make a very modest contribution to power generation.

“Environmentalists noticed adverse consequences in wind generation, too – the shaft on which the wind generator is installed vibrates, and  there are no living beings for dozens of meters from the shaft, even worms.  Wind power plants are installed on offshore platforms, but the problems may arise there as well”,  added Nikolay Tokarev.

Interview by Transneft President Nikolay Tokarev to  Russia 24 TV Channel

Based on TASS, Interfax Information Agency, Russia Today IIA
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