Economy

Kazakhstan oil refineries face shutdown

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Kazakhstan may be forced to shut down its oil treatment facilities as Russia continues to supply low-cost gasoline to the breakaway republic of the former Soviet Union.

“It is going to be a problem when cheap Russian gasoline starts flowing here. And Russian gasoline is cheap now… This will cause our own refineries to stop, cause job cuts,” Kazakhstan’s Minister of Energy Vladimir Shkolnik said on Tuesday.

He said that his country and Russia have to “balance the situation” so that oil refineries in Kazakhstan would continue running.

Kazakhstan is a top oil producer in Central Asia, but it lacks sufficient refining capacity to process its own crude oil to produce such products as gasoline.

The country has said it would still need at least one year to renovate its refineries in order to meet its growing domestic need for petroleum products.

Shkolnik also dismissed media reports that his son Igor Shkolnik had sold his major stake in Orsk-based oil refinery to Russia’s oil company RussNeft.

“My son hasn’t bought or sold anything. To my best knowledge, he hasn’t been buying or selling anything in the last three years,” he said.

The minister was reacting to a recent report by Russia’s Kommersant Daily that RussNeft had bought back its stake it sold three years ago.

One of the oldest oil treatment facilities in Russia, the refinery handles 6.6 million tons of crude a year to produce gasoline and diesel fuel.

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