Date: 24 April 2018

Transneft is leaking

A state-owned oil pipeline operator in Russia wants to enhance powers of its security service. Transneft have problems with dealing with increasing number of thefts from oil pipelines. This not only influence oil companies which use the services of Transneft, but also means measurably smaller incomes to the national budget.


Transport of over 85% of Russian oil is controlled by a state-owned company Transneft, which is presided over by Nikolay Tokarev, a former KGB officer and a friend of Vladimir Putin from the times of service in GDR. Transneft is the biggest in the world oil pipeline business – is has almost 70 thousand kilometres of pipes, which pump oil. In 2017, at least 289 illegal attachments and oil steals from the system were conducted. What is worse, the number of such crimes increases year by year. The company does not want to inform how much oil is being stolen and what are the costs of it for Transneft. According to independent analysts, these are from 180 to even 800 million dollars a year. And this is only the value of stolen material. The real costs are even higher, adding the expenses on repairs and losses generated by temporary disabled parts of oil pipelines. During such attachments, severe oil leaks and contamination of big areas are often. The fact that in case of pipe leakage a fountain of oil can be even 50 metres high shows scale of the risk to the environment. In most oil pipelines the material is pumped through a pipe with a 1.2 metre diameter under pressure of 45 atm.

Transneft is not willing to reveal information about losses, especially because it does not extract the raw material itself, but only provide transport of oil to refineries for other oil companies. Although, the company sells oil, or rather its residues from pipelines and magazines to be precise. Some time ago, Transneft was even accused of appropriating considerable amounts of oil under the pretext of “technological costs”. Aggregated losses of oil companies which use the service of Transneft amount to from 55 to 106 billion roubles a year. It means 19-37 billion roubles which do not enter the budget from taxes. The establishment of Transneft’s own security in 2013 did not improve the situation. This is a large “army” which is allowed to use special measures. It is interesting that after the appearance of the service, the number of illegal thefts from the pipeline considerably increased (from 180 in 2012 to 289 in 2017). This fact is used by Transneft to issue the enhancement of powers for the security service.

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