OREANDA-NEWS. February 18, 2010. Russia could delay the planned introduction of more rigorous fuel-quality standards due to the technical specifications of the country's vehicles, TNK-BP's VP for Refining and Marketing Didier Baudrand told a London conference yesterday. Mr. Baudrand also mentioned that TNK-BP planned an increase in its R&M investments in 2010, reported the press-centre of OTKRITIE Financial Corporation.

View: There is no immediate cash-flow impact on integrated oils from a delay in the introduction of new fuel standards, in our view. However, this would mean that less sophisticated refiners will get more time to upgrade their refineries in order to conform to the Euro-3 product specifications.

The Russian government originally planned to introduce Euro-3 from 1 January 2011, and Euro-4 from 2012. However, it would seem that a number of refineries stand little chance of complying with the Euro-3 standards by January 2011. The less sophisticated refineries in Russia include Kirishi (Surgut), Khabarovsk (Alliance Oil), Komsomolsk (Rosneft), Tuapse (Rosneft), Ukhta (LUKOIL), Krasnodar (Russneft) and Orsk (Russneft). In effect, a delay would provide these companies with additional lead time for the upgrade of their refineries.