MERO and Czech Refining agree on oil transport after years of talks

With the signing of a new agreement, several years of negotiations between MERO ČR and Česká rafinérská are nearing a successful conclusion. The contract for the provision of oil custody and transport services via the IKL and Druzhba pipelines, the Czech sections of which are operated by state-owned MERO, has been valid since 1 January 2016.

The original contract for oil transport and storage between Česká rafinérská and MERO ČR was concluded in 1996 for a minimum period of 15 years. However, at the end of 2009, Česká rafinérská exercised its option to terminate the contract, with a three-year notice period. The companies had therefore been negotiating new contractual terms since 2010 that would be acceptable to both parties.

“By signing the agreement, we have restored a standard contractual relationship between MERO ČR and Česká rafinérská and jointly contributed to stabilising the situation in the Czech petrochemical sector. We appreciate the active and positive approach of Česká rafinérská’s management and the contribution of its negotiating team to reaching the agreement.”
Stanislav Bruna, Chairman of the Board of Directors and CEO of MERO ČR

Negotiations will now follow on the transport tariff for oil transported through the Druzhba and IKL pipelines, with the outcome expected to be known by the end of March. The level of transport tariffs was one of the reasons for terminating the original contract.

According to Marek Switajewski, CEO of Unipetrol, the sole shareholder of Česká rafinérská, the new agreement is an important element that will strengthen supply security. The contract takes into account the interests of both parties and clearly defines the terms of cooperation between the companies in transporting oil within the Czech Republic.

“The contract is the successful outcome of lengthy negotiations that have been under way since 2010 and which I hope will soon be concluded with an agreement on transport tariffs.”
Marek Switajewski, Chairman of the Board of Directors and CEO of Unipetrol.

Česká rafinérská is the Czech Republic’s sole oil processor and largest producer of petroleum products. Its refineries in Litvínov and Kralupy nad Vltavou can process up to 8.7 million tonnes of oil annually.

MERO ČR is a joint-stock company wholly owned by the Czech Ministry of Finance. In the Czech Republic, it owns and operates the IKL and Druzhba pipelines, holds strategic oil reserves and is the exclusive transporter of oil into the country.

Lead photo source: crc.cz