Armed men occupy disputed Mariupol refinery

20 July 2016, Week 28 Issue 890

The Azov Oil refinery in Mariupol, Ukraine, has been seized by a group of 30 men armed with machine guns and grenade launchers, apparently as part of a debt dispute.

The incident began around noon on July 8, when a Hummer, two minibuses and two cars broke through the gates of the refinery and the masked men forced the members of the Ukrainian National Police guarding the facility to the ground and then expelled them from the premises. The refinery had been repossessed by mortgage-holder and Italian financial conglomerate UniCredit, which is now understood to own over 90% of the plant’s equity.

It is located near the zone of conflict between government troops and Russian-backed rebels. As a result, it has been prevented from receiving raw materials, local media noted. The refinery was not operational, and media describe the facility as having been plundered, with equipment and cables hauled away and sold as scrap. Mariupol, situated on the Sea of Azov, is in the section of the Donetsk region controlled by the Ukrainian government. It was the scene of armed conflict in May 2014 and January 2015.

UniCredit complained that the police had taken no action in response to the situation but, according to local news websites, police came to the site after it was taken over and were told by the occupiers that they had been contracted by the owner of the refinery to guard it. The websites stated that representatives of that owner had also ventured to the refinery and were turned away under threat of violence. It noted that Azov Oil and the bank had been in a dispute since the spring of this year and were involved in a civic court case.

Neftegaz.ru identified the owner of Azov Oil as Suren Sardaryan, an Odessa businessman who also controls a large chain of filling stations and who has “an unpleasant history of false bankruptcies.”

The local police say they opened a criminal investigation of seizure of property, but neither the bank nor the refinery’s owner (whom they did not identify) had been able to prove their rights to the property. They will take no action, the police said in a statement dated July 14, until they have determined the legality of the actions on both sides of the dispute. They invited the public to submit evidence to establish the facts in the case.

UniCredit Bank responded with a statement saying that it had not requested the police’s intervention in its civic action against the owner of the refinery, but only the removal of the unidentified parties from its property, and that its representative was not allowed to present proof of the bank’s right to the property.

Azov Oil was set up in 1999 with investments of over US$63 million. The refinery, described as a “mini-refinery” in some reports, was modernised in 2006 and had a throughput capacity of 411,000 tonnes per year (8250 barrels per day). According to Azoz Oil’s Russian-language website, which has apparently not been updated since December 2014, the company was set up as an investment project and it produced gasoline, diesel and heating oil which was transported by rail and truck for use within the Donetsk region.

Joseph Murphy

Edited by

Joseph Murphy

Editor

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