Top Stories
Top Stories

UPDATE 2-Russia disputes volume of tainted oil in Europe -newspaper

* Transneft estimates much lower than those of Belarus, Poland

* Transneft and many Russian firms agree compensation formula -VP

* Those who disagree can go to court, Transneft says (Recasts, adds Transneft's tainted oil estmates)

MOSCOW, May 30 (Reuters) - Contaminated Russian oil volumes sent to Europe are much smaller than claimed by Belarus and Poland, Russia's pipeline monopoly said on Thursday, in the latest twist in the country's worst oil export crisis.

Some 3 million tonnes of oil was contaminated with organic chloride, not the 5 million estimated by Belarus which transits Russian oil to Poland, Sergei Andronov, vice-president of pipeline firm Transneft, told the Kommersant newspaper.

Andronov said some 690,000 tonnes of contaminated oil had been sent to Poland and Germany, well short of Poland's estimate of at least 1.1 million tonnes in the two countries.

Oil buyers in Belarus, the Czech Republic, Germany, Hungary, Poland, Slovakia and Ukraine have been affected by the contamination, which has halted exports via Russia's Druzhba ("Friendship") pipeline since April 25.

Buyers from Russia's Baltic port of Ust-Luga were also affected but exports there have resumed.

Resuming deliveries of clean oil via the Druzhba pipeline, which can carry 1 million barrels per day or 1% of global supply, is expected to take longer. Transneft expects a full clean-up to take 6-8 months, Andronov told the Kommersant.

In Belarius, the plan is to pipe some tainted oil volumes back to Russia to free up capacity for clean oil as well as other steps.

Russia plans to pump back some 1.33 million tonnes of tainted oil from Belarus, Andronov told the Kommersant.

It has no plans to pump oil back from Poland, he said.

Transneft has made it clear it will only compensate Russian producers and fellow pipeline companies while Western buyers of should seek compensation from Russian suppliers.

"Together with the energy ministry we have studied the question of possible compensation to (Russian) oil suppliers... Almost all Russian suppliers have agreed with the proposal," Andronov told the newspaper, without elaborating.

"In case of their refusal - there is only one way to settle - litigation," he said. The energy ministry and top oil companies did not reply to Reuters requests for immediate comment.

Most Druzhba supply contracts are governed by Russian law. Sources at many Western buyers have said litigation would be a last resort.

Russian officials and Western buyers are set to meet on June 3 in Moscow to discuss the matter.

The bills could amount to hundreds of millions of dollars. France's Total, whose Leuna refinery in Germany has halved processing after receiving contaminated oil, estimated the cost of decontaminating a barrel of tainted oil at around $15. Russia's Urals blend is trading at just under $70 per barrel.

Russia's finance ministry said this week that Transneft, not the state, should foot the bill. (Reporting by Vladimir Soldatkin and Katya Golubkova; writing by Dmitry Zhdannikov; editing by Edmund Blair and Jason Neely)