Austrian oil pipeline through the Central European Aquifer

By Andrej Nosko, and Martin Horanský guest author

Slovak government is still unclear on the support for the project of oil pipeline extending the Soviet-era pipeline Druzhba through the largest Central European Aquifer of Žitný ostrov (Rye Island) from early nineties. The previous actions of the ruling party ministers are not matching the pre-election promises. The project of exporting the Russian oil into the Austrian refinery of Schwechat close to Wien was started by the joint venture between the Slovak Transpetrol (74% share) and Austrian OMV (26% share) in 2005.



This project made sense for both parties in the consortium, the Slovak Transpetrol fully under managerial control of largest Russian private oil company Yukos (with 49% ownership in Transpetrol) having access to its own upstream production, as well as the OMV, large refinery seeking to diversify its crude oil imports away from pricey Mediterranean tanker based supplies, in order to increase its competitiveness in the Central-European market (also against the Slovak refinery Slovnaft which is only 60 km away). The 60 km long pipeline with the capacity of 2.5 Mcm (with possibility of doubling this capacity) was nonetheless stopped by the Slovak Ministry of Environment (under control of minister László Miklós – SMK – Hungarian Coalition Party of the Dzurinda’s government), because of the questions around the ability to protect the important Aquifer as is illustrated in the Environmental Impact Assessment - EIA of the project from 2005.

Last year, the idea of building the oil pipeline through the national water reserve and important European Aquifer has been resurrected by the Fico’s government, when on 16 October 2009, his minister for Economy Jahnatek and his Austrian counterpart Mitterlehner signed a Memorandum of Understanding resurrecting the project, originally proposed by Vladimir Meciar on 2 March 1993.

This was complemented by an attempt of Fico’s party colleague MP Pellegrini, who attempted to reassign the level of protection for the Aquifer area in order to simplify the permitting process. Only under the intensive pressure from the media this attempt have been withdrawn. The concern for the public is that while there is an alternative routing for the pipeline, this would prolong the pipeline and in order to protect the aquifer, pipeline would have to pass through Austrian bird-refuge areas.

The current option, which has already received the Austrian green light for the 50km in Austria, is problematic for Slovaks, because of the strategic importance of the Danube Aquifer. According to the publicized information from the back-than minister Simon, the 10 km of projected pipeline in Slovakia is to be wholly owned, and under the control of the Slovak government. It is only the 50km of Austrian pipeline where the Slovak government has ‘only’ 74% share.

Therefore it is not understandable why in this context the Slovak government does not take active steps, although the politicians are uttering the pre-electoral words, the planning continues as if there was nothing to loose, or as if the environment on the Slovak side of the border was of lower value than that on the Austrian side.

It is appropriate to remember that it was the Fico’s minister of Economy who has re-started the Meciar’s project, and it is very important to remind our readers, the current ownership structure of the consortium: The shares in the joint venture Bratislava – Schwechat Pipeline GmbH, are same as in 2005, nonetheless the sole owner of Transpetrol a.s. is the Slovak Republic represented by Slovak Ministry of Economy. It is the same ministry, which is governed by Mr. Ľubomír Jahnátek (of Fico’s SMER-SD).



While the project is of small economic importance to Slovakia (EUR 30-90M per year if the whole capacity was utilized, less amortization and operating costs of transit depending on the split of revenue and the level of tariff, which are not known; in case the transit on the whole territory of Slovakia is considered, which is cca 0.03-0.09% of GDP), the risks for the country are too high. Besides the ecological risks from building the pipeline through the aquifer, there are additional economic risks. Pipeline, could improve the possibility of OMV's Schwechat refinery to compete with the Bratislava's MOL-Slovnaft refinery, thus potentially endangering the employment and tax revenues in Slovakia. Economic competition is a positive, nonetheless, not when the negative externalities are to be borne unilaterally by Slovakia.

Therefore what is really puzzling is why, the government and party of Robert Fico is supporting projects which are of minimal benefit for Slovakia and make more sense for Russia and Austria?

Regardless of the recent PR statements of Robert Fico saying, that while he is the prime minister, there will be no pipeline, and he does not understand why this is still making news. PM Fico has a track record of proposing projects of questionable value for Slovakia, while at the same time of real benefit for Russia. Recently, he agreed to fund a feasibility study to build a wide-gauge railroad through Slovakia, thus enabling direct rail connection from Russia to Austria. Similarly to the pipeline, this project has negative costs to Slovakia and lacks the commensurate benefits. While the railroad is different story, similarly to pipeline it increases the revenues and tax incomes of Slovakia’s neighbors at the costs of Slovakia. (Since the recently modernized rail transfer terminal Cierna nad Tisov in the high-unemployment burdened east of Slovakia would go out of business if the rail link to Vienna is completed)

The energy security argument, although mentioned by the politicians, does not work in this case. The theoretical possibility for Slovakia, to import oil from Austria and thus further diversify its oil supplies is unrealistic and not feasible. The AWP pipeline from Adriatic to Wiena does not have sufficient capacity to supply both Austria and Slovakia, (through the new pipeline in reverse mode) should a need arise, this has also been a reason why in early nineties, diversification for Czechoslovakia was not done via AWP but via TAL through Ingolstadt to Kralupy and Litvinov.

Moreover, Slovakia is already connected to Adriatic via Adria-pipeline connection shared with Hungary, which could supply additional oil in case of crisis, or need for price-motivated diversification of MOL owned Bratislava based refinery. Finally, if the rationale has been security, Fico’s government should not have turned down the offer from MERO, we have written about previously.

It therefore remains puzzling why is Mr. Fico acting more in the interest of Russia (and Austria) than in the interest of the country he has been elected to be a prime minister of.

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Crude’s Bumpy Ride: In Search of Fundamental Determinants of Oil Price

By Michal Trnik, PERG guest author, http://michal.trnik.sk/

Providing credible and accurate forecasts of crude oil prices was always a tricky business resembling rather fortune telling than an exact science. With the unfolding oil price volatility, the reputation of analysts suffered a heavy blow once again. Only recently, many experts prognosticated record high $200 per barrel to be hit in a reasonably short time. Today, oil price continues its unexpected nose-dive, and oscillates below $60 a barrel, however.

Source: Shooty; used and modified with the kind permission from the author.


To be clear, explanations and estimates of crude prices were always a messy field. The recent unexpected price volatility unraveled weaknesses of many silver bullet explanations and left average consumers with the pressing question on their mind: "So who the hell can I blame?" The list of potential culprits has always been long.

It’s OPEC, stupid
The OPEC’s influence is still by many believed to be one of the most important causes defining the crude oil price. However, the market power of OPEC today is not what it used to be. Although the shortening of supply to increase oil price was used as a tool to boost producers’ profit, nowadays the situation is largely different as a result of OPEC being an example of undisciplined cartel; increasing availability of energy substitutes, and the nature of the current oil pricing system. The so called reference price regime in place today is based on two main freely traded reference crudes – Brent and WTI – both of which determine the price of other types of crudes, which are not freely traded. This current regime thus largely eliminates the drawbacks of the OPEC price regime (1970-85) in which prices were unilaterally determined by producers.

Crises raise prices
Political crises and instability in oil-producing regions became one of the most routine media used explanations on oil price increases. Such interpretation, however, is of no use given that political unsteadiness is rather a norm than an exception and in today’s globalized world it is fairly easy to find a geopolitical disturbance to which climbing prices can be attributed. No doubt that severe geopolitical crises can impact oil prices. Nevertheless, this explanation has to be used reasonably and with extreme caution.

Running out of oil (once again)
The Hubbert’s famous peak-oil theory rightly predicts that oil as a definite source will have to reach its production peak sooner or later. The price is expected to rise as a consequence of oil production reaching its terminal decline and thus becoming increasingly scarcer. There are many "prophets" who regularly omen that the end is near or had mistakenly announced the peak already some decades ago (video at 5:45). Briefly, we’re not there yet. Linking any oil price run-up with the alleged peak thus cannot be taken seriously.

Hedge funds, pension funds, speculators and other vermin
Various funds and fortune hunters are often accused of sky-rocketing oil prices and such view still enjoys credibility whether among consumers, politicians, analysts, industry executives, or among former chief speculators themselves.

Keeping the argument as simple as it gets, it was very recently the speculators were accused of artificial inflating of oil price, which was believed to be above the level at which demand is in balance with supply. Higher price allegedly created by artificial speculative demand would in effect mean a necessary existence of physical excess oil supply that has to be hoarded by the seller for future sale to fulfill his commitments to the buyer. Likewise, if the price is suddenly too high, then demand from the traditional consumers would shrink, leading to a large surplus of the oil in the market. The question is: what happens to this excess supply then? Well, as it is not consumed it should be stored in physical inventories somewhere. There is no empirical evidence of such accumulation at any point during the last price increase, however, which in turn means that the alleged existence of price bubble does not hold up to the economic reality.


Moreover, speculators cannot directly influence prices as they are nothing more than price bettors willing to throw their millions into the market hoping their forecasts of future price will be accurate enough to earn them profits. In any case, the oil price remains unaffected as betting on the future oil price has no direct effect on actual price moves similarly as betting on horses has no direct effect on the winner of the race no matter how much cash and how many people bet on that particular horse. It is the futures market which is the main playing field of all ‘speculators’ who instead of buying physical barrels bet on future prices of oil by buying futures contract.

What the future(s) hold
Sometimes the least sexy explanations are the most valuable ones. The futures market and trading of futures is the key to understanding the working of current oil price mechanism. The market with futures, which is a market for financial contracts, is where the oil price is determined.

The oil market, like any other commodity markets, can be divided into the spot market and futures market. In the spot market physical “wet barrels” of oil are traded. The futures market, where “paper barrels” are traded, on the other hand serves the needs of those who need oil in the future but do not want to purchase it today but rather when their actual demand arises. These traders instead of purchasing physical oil barrels opt for a futures contract which entitles them for those barrels later on. The price of such contract is set by an agreement between the buyer and seller. At the same time these contracts make predictions about the future direction of prices, which determines also the current price on the stock market. Today, only a small portion of oil is traded on the spot market, however, as it has became very thin due to its insufficient liquidity caused by a rapid decline in oil production of the two reference crudes (WTI and Brent). The futures market should not be understood as a cause of the oil price changes but rather as a place where it happens.

Current volatility and good ol’ supply and demand
In economics you won’t usually go off the track too much if you go for the supply and demand explanation whenever you are not sure about the answer. There is nothing fundamentally wrong with such answer neither in the oil markets. As the world tends to be complicated, saying supply and demand is not enough, nevertheless it is crucial for understanding the recent oil price tumble. Moreover, the recent unexpected plunge of oil price indirectly confirms that OPEC, political crises, peak oil or speculators are not the most important factors shaping the oil price.

One barrel of fresh crude without bubbles please
The recent extreme volatility is related to shocks to both supply and demand. First, the sharply increasing demand for crude in developed and developing countries combined with structurally stagnant supply stemming from persistent shortage of refining capacity stood behind the soaring price. Second, its subsequent plummet is a logical reaction to contracting demand caused by slumping economies all around the globe triggered by the credit crunch.

Supply and demand, no rocket science. Making analogies between the development of price in oil markets and the price bubble we’we encountered in the US housing market thus seems rather inadequate.

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Energy and the South Ossetian War: the BTC as the Main Casualty?

By Vladimír Šimoňák, PERG guest author

For the first time in the nearly twenty years since it began, the events in and around South Ossetia hit the world´s media landscape, almost overshadowing even the massive spectacle posed by the beginning Beijing Olympics. A peculiar tragedy of the events consists in the fact that this one has been regarded as the „friendliest frozen conflict“ in the South Caucasus. Intermarriage rates between Ossetians and Georgians and the density of contacts between ordinary citizens on both sides, the frequency and ease of travelling between the regions had been much higher than in Abkhazia and Nagorno Karabakh. Yet, few people ever assumed any degree of hostility between the two peoples might have caused the events of August 2008. It is equally evident that NATO´s interest in Georgia is to a major degree substantiated by the hydrocarbon transport routes running through the small and poor nation.


Being a part of a prolonged and rather complicated conflict, this full-scale war broke out after a shock-and-awe onslaught by Georgian forces on Tskhinvali, the separatist capital of South Ossetia located some five kilometres away from the de facto border. Even though the swiftness of Russia´s response has been interpreted as the corpus delicti of its evil intentions, it took a less than vigilant observer to see something was to come. Over the past months, tensions between Georgia and its breakaway regions had been rising and military confrontation had become a common sight. Immediately before August 8th, South Ossetian leadership decided to evacuate a part of its population, by itself an unprecedented step. By early August, signs of immediate escalation had become ubiquitous and Russia was certainly well informed and ready for action. The initial Georgian advance was halted and reversed after some three hours. In a nutshell, more than five years of intense and costly U.S.-led foreign military aid to Georgia produced an advance by less than twenty kilometres for a couple of hours. Afterwards, with the Georgian military effectively dissolved in thin air, the Russian troops took their time to complete what business their leadership wanted to get done. Russian forces took their time to inflict as massive a damage as they could to Georgia´s strategic infrastructure, the seaport of Poti and the only trans-Georgian railway being just examples. The next occassion for the Russians to roam about freely in Georgia might take years to come. With the fog of war dissolving, what is the impact on the energy market?

Regarding the oil transport, the Baku – Tbilisi – Ceyhan (BTC) pipeline had already been put out to a halt. Two days prior to the Georgian assault on Tskhinvali, a bomb exploded near the BTC on Turkish soil, forcing the operator to shut down oil transports for weeks. The Kurdish PKK claimed responsiblity, shifting the event out of focus. During the fighting, the BTC was also allegedly targeted by Russian jets, which the Georgian side swiftly interpreted as an attempt to destroy the facility. This isolated incident may be explained rather as a sort of message to the BTC operators, as nothing could have prevented the Russian forces from destroying the pipeline, had they intended to do so. The oil transport via the Black Sea port of Supsa has come to a halt on August 12th, the operator citing „security concerns“. Russian troops making themselves at home in the narby Poti have probably been thought to be more dangerous than the intense fighting itself, as August 12th was precisely the day on which Medvedev announced the end of Russian military actions.

The Baku – Tbilisi – Erzurum gas pipeline was working until August 12th and resumed functioning only two days later. No direct threat to the pipeline has been reported, not even by hysterical Georgian officials. Rather than the weapons used in the conflict, what we may find surprising are the ones actually not used: Russia never cut its gas supply to Georgia during the fighting, albeit it had done so several times in recent years. A possible explanation is the intention not to harm natural gas supplies to Armenia, Russia´s ally already put in a difficult position by the events.

Quite remarkably, the global oil market showed no perceivable reaction, even though the events effectively stopped Azerbaijani and Kazakh oil from using the „Georgian passage“ bypassing Russia´s pipelines. Russian troops have effectively stopped this highly valued transport routes from working for weeks, and showed a good deal of reluctance to leave central Georgia, the pipelines´ most sensitive point. Despite such tangible insecurity, the world markets recorded a decline in crude prices, actually quite a sharp one, compared to the record of several recent years. The bottom line is, there is no reason at all to claim that the energy industry in the region was caught by surprise by the events and that the war affected its business-as-usual. But are there consequences in the long run?

Not only have the Russians physically occupied territories adjacent to the highly valued and strategically important pipelines, forcing them to shut down. They even declared their firm intentions to establish a permanent presence in extensive „buffer zones“ close to South Ossetia and Abkhazia. Such a step would basically remove the advantage gained by forcing Russian troops from their cherished bases of Viazani and Akhalkalaki in recent years. What had been cited as an unacceptable threat to the BTC project in construction is escaping all attention as it is functioning.

The United States have reacted in perhaps the least self-confident way since 9/11. Strong rhetorics and high-profile visits (including the quite riduculous use of a destroyer for carrying „humanitarian aid“, instead of a freighter) are clearly less than expected by anyone, including the nervous Georgian president. The lack of a clear preference regarding the future of the region in general and of Saakashvili´s leadership in particular (accentuated by the forthcoming U.S. presidential elections) remind of Shevardnadze´s last years in office. South Ossetian war may well be the point when a replacement has to be found to overcome the barrier so painfully hit by Georgia.

In the eyes of the public, the only goal not attained by the Russians was their supposed interest in removing Saakashvili from power. A feasible explanation might be the simple remark that leaders are removed from power by being replaced by another ones and the Russians clearly had not had a full-fledged “liberation“ scenario including an alternative leadership. But, is there an option to regime change when the Russians leave? Georgian society will be left in deep depression, both economically and psychologically, with its leadership´s emblematic policies having suffered the most evident and complete defeat and foreign investors´ confidence plunging into the abyss. The opposition, once suppressed by Saakashvili´s regime, might come to pose a serious alternative.

The rhetoric confrontation accompanied by a striking lack of actions may be indicative of a change in direction. As almost anybody is more acceptable to Russia than Saakashvili, it should not be difficult to find an alternative acceptable to NATO. Such a person may also prove to be more predictable and controllable in his or her (let´s not forget several important female figures of Georgian politics) actions. The sight of a ruined and defeated important U.S. ally may lead to a number of conclusions, including the one that Saakashvili has been quite more of a maverick than fitted his role. Given Saakashvili´s deep-rooted Russophobia, almost anyone can be expected to understand the simple fact of Russian neighborhood more than he had.

As a conclusion, the recent events may well result in o certain sharing of influence in Tbilisi, or rather an acknowledgement of legitimate Russian interest in the Southerm Caucasus. Under such terms, the BTC may well lose most of its political appeal to potentially independent-minded leaders around the Caspian Sea, a signal that has probably already been understood in Astana. A partial gain of influence of Russia over the BTC means more of a loss for the others, depriving the region of the only way of exporting its oil and gas (by far largest source of income for any of its governments) without Russia´s interference. The „buffer zones“ and Russian posts along the pipelines may well be just the first steps of putting this emerging reality on the map.

August 26th, 2008

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How do you tell a difference between political, and commercial? (Oil Cut to Czech Republic)

By Andrej Nosko

How does one tell what is politics and what is business? If business uses the state to further its interests, people call it state capture. How do you call it when state uses business to further its interests? Raison d'etre?
Following the recent news in Czech Republic makes one wonder about Russia, or maybe rather about the rest of the Europe? Is not Russia the 'normal' one in the equation? It is doing what states have been doing for hundreds of years - maximizing its power.

Oil supplies from Russia have been cut to Czech republic, without any warning (in accordance to the agreement with Russia, the EC should have been informed), and U.S. presidential candidate Mr. McCain, subconsciously turned-on his Cold War reflex, when he expressed “regret some of the recent behavior that Russia has exhibited [...] including reduction in oil supplies to Czechoslovakia.”

When Nicollo Machiavelli wrote to his friend Francesco Vettori 495 years ago, that he can only talk about politics, because he doesn't understand business, the political reality was quite different. In the contemporary polyarchic political systems (people sometiems call them democracies, but this is energy security section, so I leave the conceptualization issues aside) interests (whose?) tend to be aggregated through political parties. Therefore state should cater for the needs of its citizens, through politicians aggregating the preferences and interests of their constituencies to maximize their potential for re-election, (which, if democracy functions well, should happen through catering for the decisive amount of electorate). Nonetheless, this is theory, the reality is, as usual, bit different. State uses business to pursue its needs and interests, and business uses the state reciprocally. This is particularly the case in the energy sector.

Without advertising a new movie (which in itself advertises bio fuels), the first few seconds of the following clip fit this blog: "Energy is really political, and it was always political."


On the July 10, Czech Ministry of Economy confirmed cuts in oil supplies from Russia. Nothing serious, previously I have written about the fact that Czech Republic has diversified its oil supplies, it also has sufficient strategic stockpiles (at 02/06/2008 CR had more than required 90 days of its consumption of fuels) this means that Czech refineries have sufficient time to buy substitute crude oil elsewhere, and they also have alternative route to ship it into the country.

So if there is nothing serious, one could ask why this blog-post. I would like to point out couple of similarities from the history, and pose couple of questions, without any definitive answers. On July 8, Czech Republic and USA signed an agreement on 'controversial' anti-missile shield radar base to be stationed in Czech Republic. This is part of a US system, that aims to protect USA against Iran, the other part of the system to be stationed in EU - the ten interceptor missiles are planned for Poland. Russia was not happy about this. At numerous occasions Russia has voiced its discontent with US plans to station its installations in Europe. Another example is at the end of this video, when Mr. Putin, back than president of Russia, 'theorizes' over aiming missiles at Ukraine, if it joins NATO - a potential move that Russia is not very happy about.


Therefore it is interesting, that the oil supplies were significantly 'reduced' only to Czech Republic, and this happened just a day after the signing of the agreement with USA. Russian side claims reasons are unpolitical (the official press statement states reasons as "technical organizational problems in Russia"). Nonetheless, even Russian media makes the connection, see an article in Kommersant, Pravda or longer historical and regional comparison in RIA Novosti. Let's review context of similar events from the recent past, when supplies of energy were significantly reduced, or cut completely, for business or technical reasons.

Besides the well known issue of 'gas row' with Ukraine in 2006, 2007 and 2008, which would deserve a separate post, and very interesting case of gas cut for Georgia (2001, 2004, and combined with electricity in 2006 - mostly in connection with the Russian supported separatism movements), or oil cut in Belarus in 2007 (over prices of products and transit fees, followed by an agreement on early warning system), the case of Lithuanian refinery Mazeikiu deserves more attention.

In July 2006, Lithuanian refinery Mazeikiu ceased to receive its oil supplies through Druzhba pipeline allegedly due to technical problems. Ideas of some, who have pointed out, that the fact that the cut, and a peculiar fire in the refinery, occurred after Gazprom was not succesful in trying to acquire the only Baltic refinery, over Polish PKN Orlen, are supported by the fact that the supplies have still not been restored. The refinery imports oil through its Butinge terminal, originally conceived as an export terminal.

Seeing this situation, and the experience of PKN Orlen, from Lithuania, and Latvia (Ventspils bid), its Czech operator Unipetrol (owning both of the Czech Refineries), may be facing another struggle with the Russians in the eastern part of the EU. It may also be another proof, that the distance between the politics and business is much smaller than the 15 km, that Alexander Medvedev mentions. (In an interview for Euronews at 5:30"/6:55" in this video referring to the distance between the Kremlin and HQ of Gazprom in Moscow).

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Reversing of oil pipelines

By Andrej Nosko

“Slovaks want to import oil from Czech Republic” reads the headline of a news feature, run on April 15, 2008 by a Czech daily E15. This story has been copied by all major Czech and Slovak news hubs. Even if one subtracts the bombasticism and ‘exclusivity’ common to the lay journalists, this news is surprising and makes one wonder about three things: authenticity of the news on ongoing negotiations, relation of this news to the wider context, and timing of this message.

Authenticity of news
It is difficult to question the authenticity of the information, whether any negotiations are ongoing between Czech and Slovak administrations, since usually these kinds of negotiations are kept confidential. Tomáš Bartovský, the spokesperson of Czech ministry of Industry and Commerce was quoted by E15 as affirming the ongoing negotiations. The direct quote refers to the situation that “would concern solving of potential supply outages,” no further context of this comment is provided. The daily further quotes director of Czech oil pipeline operator MERO ČR a.s . Jaroslav Pantůček, as saying that reversing of pipeline would cost couple of tens of millions CZK (10M CZK approx. 400k EUR), and that Slovaks would have to finance this operation. The daily further notes, unavailability of any further information on negotiations between Slovaks and German operator of TAL pipeline which feeds in the IKL from the Mediterranean port of Trieste, and which would be a necessary condition for the Slovak-Czech deal to have any substance.

Relation to the wider context
The context and timing of this message is rather bizarre. First of all, the idea of reversing Druzhba to supply Slovakia through TAL-IKL is not novel. When the IKL has been conceived in what was back then called Czechoslovakia, it was a preferred project over an idea of connecting refinery in Slovak capital of Bratislava (Litvinov 5.4 MT/yr, Kralupy 3.3 MT/yr.) to the AWPpipeline (annual capacity of 10 MT/yr) leading to the refinery close to Austrian Capital in Schwechat. (capacity of 9.6 MT/yr) which is also supplied by TAL, but unlike the branch leading to the refinery in Ingolstadt, the capacity of AWP is projected only for the needs of Austrian refinery, and thus rather limited for transporting additional supplies. It was preferred, because connector to Ingolstadt would provide for the possibility of supplying also Slovak part of the federation. Nonetheless, this possibility has to be seen in the wider context. The supplying of Slovakia through TAL-IKL would mean prolonging the transit from the oil exporting country, than loading of oil to a oil tanker, offloading the tanker in Italy, shipping it through Italy, Austria, Germany and Czech Republic further to Slovakia. When one puts this barrel of oil into such a globetrotter context, other reversing plans come to the picture as well.
The most interesting is the possibility for Ukraine to reverse its pipeline between Odessa and Brody to supply its western neighbors with oil from the modern port of Odessa should the exports of Russian oil through Druzhba cease.

Furthermore, the context of the reversing of pipelines has the other side or rather, other direction, as well. Czechs are discussing reversing of IKL to export Russian oil since the early times of IKL has been put into operation, and its capacity has been rather underutilized. This would nonetheless entail changing the technology of the Kralupy refinery, since it is currently unable to process high-sulphuric sorts of pipeline-Urals oil from Russia.
Additional option, envisaged by Transpetrol (owned by Jukos Finance) and OMV already in 2003 is the possibility of building the connector to Schwechat, this option is still on the table.

Timing of the message.
Another question that one can be wondering about, is why has this information been released now? Is it just a coincidence, or is it a part of some information game? Just few days before this message was released, Russian PM visited Slovakia, and a major Slovak daily Sme juxtaposed coverage of his visit in Slovak and Russian media. On the first sight it is quite clear, that Mr. Fico (Slovak PM) met a different Russian PM and Mr. Zubkov has apparently met a different Slovak PM than Mr. Fico, since these two people referred about their meeting in such a different ways. Nonetheless, this question should be dealt with in a different post.

by Andrej Nosko

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