Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Gazprom Neft Will Expand Capacity at Its 2 Refineries

Gazprom Neft plans to expand its refining capacity and spend as much as $70 million on building filling stations as the government encourages oil companies to develop crude processing, chief executive Alexander Dyukov said Friday.

The company, which is Gazprom's oil arm, will "in the next few years" expand its annual output of refined oil products by as much as 5 million tons at its Moscow and Yaroslavl refineries.

Gazprom Neft's annual refining capacity rose more than 16 percent in the past two years to 28.5 million tons, Dyukov said. The company will also add a network of 20 stations in the Leningrad region, which surrounds St. Petersburg.

Prime Minister Vladimir Putin on Friday met with executives from the industry to discuss tax breaks and aid as the government seeks to improve refining and spur new exploration. Gazprom Neft may expand its spending program because of the state support, Dyukov said.

Last week, the Federal Anti-Monopoly Service said it would open cases against 251 companies selling refined oil products in Russia, claiming that they were unfairly keeping prices high, even as crude tumbled.

"Our investment potential will increase if the government extends its support to Gazprom Neft and the industry as a whole," Dyukov said.

Tax relief may create a new "foundation" for Russia's oil industry, easing the tax burden in those regions with less-developed oil fields that lack sufficient infrastructure, Dyukov said.

(Bloomberg, MT)