NAFTAN oil refinery changes name and ownership structure due to US sanctions
Navapolatsk plant "LLK-NAFTAN" has decided to change its name, ownership structure and increase the number of owners in order to avoid the U.S. sanctions.
A large producer of petroleum products is trying to protect itself and its counterparties.
Navapolatsk plant "LLK-NAFTAN" is one of the largest producers of additives in oils and fuels in the former Soviet Union. It decided to change the name, ownership structure and expand the number of owners in the spring of 2021. Since May 17, the word "NAFTAN" has disappeared from the name of the enterprise. Now it is called EddieTech LLC.
Moreover, the company has a new owner. Previously, the plant was owned 50%-50% by Naftan and Lukoil. Now it is the Navapolatsk City Executive Committee owns three percent. They were taken from Naftan's share.
The company's director Andrey Zvantsou initially commented on the company renaming, but soon withdrew his comment, citing the prohibition on the part of the owners.
"LLK-NAFTAN" (now EddieTech) describes itself as the largest integrated additive producer in the former Soviet Union. In 2014, the company was recognized as the "Best Exporter" in the category "Refining, Chemical and Petrochemical Industry with an annual export volume of over $25 million." About 95% of the refinery's output is exported.
Before May 21, 50%mof the refinery was owned by Naftan. In fact, in 2006, part of the processing complex, where additives were produced, was made into a separate legal entity owned by Naftan and Lukoil on a parity basis. The producer of additives cannot refuse to cooperate with the oil refinery as all the main technological processes are directly connected with it.
Naftan's 50% stake in this production might have put the company under U.S. sanctions. And lead to others. EddieTech supplies its additives to major Russian machine oil producers Lukoil, Rosneft and Gazpromneft. It also supplies its products to Ukraine, Turkey, Romania, Finland, Belgium, Netherlands, Singapore, South Africa, UAE, Slovakia, Uzbekistan, Latvia, and Lithuania. All in all, there are about 40 countries and 80 key partner companies from the CIS, the European Union, the Middle East, Asia and Africa. In the most severe interpretation of the U.S. sanctions for Belarus, all counterparties of the Belarusian company were at risk of falling under them.