Surgutneftegaz To Be Hit By New Oil Export Rules

The Russian oil and gas group Surgutneftegaz may sell less oil abroad than planned during 2002, hurting revenue at Russia's fourth largest company in the sector, after the government changed export rules to let more companies ship crude to world markets in the second half of 2002, analysts said.

Russia next month will scrap rules allowing oil companies that own or supply refineries in Belarus, Kazakhstan and Ukraine ship more crude to those nations, United Financial Group brokerage said in a report from Moscow. The rules gave Surgut, Lukoil and others an edge over rivals in gaining export quotas, especially as Russia curbed shipments from January 1st to help OPEC prop up prices.

Russia, which pumps and exports more oil than any nation except Saudi Arabia, retained control of the country's oil pipelines when it sold off most of its oil industry in the mid- 1990s. The nation's oil companies rely on exports for more than half of their profits.

“Surgut may be the biggest loser from this decision,” UFG wrote in a report. “Ownership in that country's refineries will no longer provide additional export capacity, the cornerstone of Surgut's marketing strategy.”

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