Russian foreign direct investment in Ukraine

Nataliya Blyakha                                                                                       PEI Electronic Publications 7/2009 

www.tse.fi/pei 

 

 

4  Leading Russian companies operating in Ukraine 

Russian companies are present in all key sectors of Ukraine’s economy. Generally the 

recourse-based companies are still dominating in investment share. Nevertheless, 

presence of Russian financial, trade and telecommunication companies’ in Ukraine is 

growing too.  

4.1 

Oil processing industry of Ukraine 

Ukraine has a well-developed oil refining industry covering six oil refineries with annual 

production capacity 51.1 million tons. However, due to severely outdated plants 

equipment and scarcity of own oil reserves the capacities of refineries are utilized for 

less than one fifth

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. After USSR collapse Ukraine's refineries did not receive enough 

crude oil supplies to supply the country's domestic petroleum product demand. To 

achieve better results in securing sufficient crude oil supplies Ukrainian oil refineries 

were privatized, witch lead to appearance of Russian companies in the Ukraine’s 

refining industry.  

Table 3 

The oil refineries of Ukraine, their capacity and usage in 2002-2006 

 

Capacity, mln 

tons 

Oil Processing, mln tons 

Capacities' loading, % 

Oil Refinery 

plann

ed 

real 

2003  2004 2005 2006 2003 2004 2005

2006 

Kremenchug

6

18.6 

10.0 

  6.6 

  6.6 

5.9   

 

6,3 66.3 66.0 59.9 63.1 

Lisichansk 

16.0 

 8.0 

  6.2 

  6.6  6.0   

 

4,9 77.5 82.7 75.1 31.6 

Kherson 

 7.1 

 4.0 

  1.9 

  1.5 

0.8 

   - 

49.4 

39.0 

21.9 

  -

7

 

Odessa 

 3.6 

 3.0 

  2.8 

  2.4 

1.3 

   - 

94.4 

81.7 

46.5 

  - 

Drohobych 

 3.2 

 2.6 

  2.0 

  2.1  1.0   

 

0,8 79.5 84.0 40.8 31.7 

Nadvirna 

 2.6 

 2.6 

  1.4 

  1.7  2.0   

 

1,3 57.1 68.0 79.5 50.6 

Total 51.1 

30.2 

21.1 

21.1 

17.4 13,3 70.2 70.1 57.6 44.3 

Source: The Chamber of Commerce in Ukraine 

Ukraine’s refineries have been transformed into joint stock companies: UkrTatNafta, 

Lisichansk-NaftaOrgSintez (Linik), KhersonNeftePererabotka (Kherson Oil Refining), 

                                                 

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 Even though real plants capacity sums to 30.2 million tons (table 3), during 9 months of 2008 

Ukraine’s oil refineries processed 7.3 mln tones of crude oil. Kherson and Nadvirna refineries 

are under repair, Kremenchug and Drohobych plants are operating on minimum rates. Out of all 

working plants only Odessa and Lisichansk refineries are operating on nominal indicators.  

6

 With bold are marked refineries with Russian ownership. 

7

 Odessa and Kherson oil refineries have been under repair from July 2005.Odessa refinery 

reconstruction was accomplished in 2008 and Kherson refinery will be under reconstruction till 

2010. 

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Nataliya Blyakha                                                                                       PEI Electronic Publications 7/2009 

www.tse.fi/pei 

 

 

Lukoil-Odesa Oil Refinery, Halychina Oil Refinery (Drohobych oil refinery) and 

Neftekhimik Prikarpatya (Nadvornyansk oil refinery). The largest enterprises in the 

industry are Kremenchug oil refinery and the Lisichansk oil refinery (Table 3). 

Table 4 

Principal shareholders of the Ukrainian oil refineries

 

 

Based on October the 1st, 2007, the official data, referring to the list of the oil 

refineries’ shareholders, are presented in the following way: 

“Ukrtatnafta” (Kremenchug oil refinery) 

“Naftogaz Ukrainy” — 43.054%; 

State Committee of the Tatarstan Republic on the state property management — 

28.778%; 

Corporation SeaGrоup International Inc. (the USA) — 9.960%; 

“Tatneft’” — 8.613%; 

AmRuz Trading AG (Switzerland) — 8.336%; 

“PrivatBank” — 1.154%; 

“Tatneftekhiminvest-holding” — 0.035%; 

“Souvar” — 0.035%; and “Davon-Credit” Bank — 0.035%. 

“LINIK” (Lisichansk oil refinery) 

TNK-BP group of companies — 95.21%; 

Minority shareholders — 4.7877%. 

10,0% — “Alfa-Nafta”; and 

16,91% — CJSC CB “PrivatBank”. 

”Neftekhimik Prikarpatya” (Nadvornyansk oil refinery) 

30,20% — OJSC “Interregional fund union” (nominal holder); 

26,00% — the State Property Fund of Ukraine; 

“Khersonneftepererabotka” (Kherson oil refinery) 

60% belong to the Trading House “Ukrnefteprodukt”, 99% of shares of which are under 

the ownership of “Kazakhoil-Ukraine” company;  

27.6% — NK “Alliance-Ukraine”. 

“LUKOIL-Odessa oil refinery” (Odessa oil refinery) 

99.8 % belong to “LUK-Sintez Oil Limited”, the British Virgin Islands, city of Roed. 

“NPK-Galychina” (Drohobych oil refinery) 

More than 74 % of this Open Joint Stock Company is controlled by the group of 

companies, affiliated with the CJSC CB “PrivatBank”; 

25.0% — the State Property Fund of Ukraine.

 

 

Out of six refineries, three are Russian owned; one is a Ukrainian-Russian joint venture 

and two refineries are Ukrainian owned (Table 4). The two Ukrainian owned refineries 

in Western Ukraine, Halychyna and Prykarpatya, are both smaller facilities. Originally 

they have been technologically orientated sorely at the Ukrainian oil. However, as the 

Western Ukraine deposits have been running low, these entreprices have been forced 

to introduce technical changes, allowing processing of heavier oil grades, in particular, 

of the Russian origin. 

Russia-based Alliance Group and Kazakh state oil company “Kazmunaigaz” are 

managing the Kherson oil refinery. The Kherson oil refinery is the oldest refinery of 

10 

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