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. Last Updated: 07/27/2016

Ex-Refinery Chief Warns of a Crisis

KIEV -- Sergei Glushko, the ousted head of Ukraine's largest refinery, warned on Thursday of a crisis in domestic production, after a management dispute led to cuts in oil deliveries from Tatneft.

The Kremenchug refinery has been running on reduced capacity since ex-manager Pavel Ovcharenko used armed police to expel Glushko, after a court reinstated Ovcharenko as the head of Ukrtatnafta, the company running the refinery.

Glushko told the Delo daily newspaper that the consequences of the dispute could hit the country's second largest refiner, Lysychansk, controlled by TNK-BP, and lead to an influx of imports.

"Without Russian oil we cannot do anything. Daily refining has dropped to one-third of previous levels -- to 7,000 tons from 18,000 tons. Give it a week more and we will be in crisis," Glushko said in the newspaper.

"Stopping a refinery means a big inflow of imports. This will hit the Lysychansk refinery. What's more, stopping domestic refining will lead to 100 percent dependence on deliveries from abroad."

Kremenchug normally processes 180,000 barrels per day of Russian crude. Officials said last week that the refinery bought 170,390 tons of oil on the domestic market, mostly for this month.

But Glushko warned that Ukraine's largest oil company, Ukrnafta, simply did not extract enough oil to provide for Kremenchug's needs.

"Ukrnafta's overall yearly extraction of oil is 3 million tons, and realistically no more than 200,000 tons a month can be sent to Kremenchug. Ukrnafta can only meet one-third of the plant's needs, and that does not guarantee efficient work."