Oil Refineries: Who Owns the Legacy and Why It Doesn’t Work | Sfornews

9 Jul, 2026
| Salome K

OIL REFINERIES: WHO OWNS THE LEGACY AND WHY IT DOESN’T WORK

How plants built by the people became private “assets,” and the crisis exposed their true value

Disclaimer: This material was prepared by the editorial board of “Kafedra” and SforNewsmagazines as part of a series of analytical investigations into the systemic architecture of the Russian economy. It is based on the methodology of legal diagnostics, archival privatization data, and open property registries. We use exclusively open sources: public legal entity registries, official company reports, archival media publications, Rosstat and Ministry of Energy data available in the public domain.

We are fully aware that accurate and verifiable data is extremely difficult to find: Russia still lacks a state system for collecting, standardizing, and publicly verifying data on refinery capacity utilization, investment volumes, ownership structures, and profit withdrawal chains. Many key parameters are either classified as “commercial secrets” or exist in fragmented departmental reports not subject to public audit.

We invite readers to independently evaluate the chain: Soviet plant → joint-stock company → management → fuel shortage. If readers have access to official statistical data, analytical reports, or internal documents that could supplement or correct our picture, we are prepared to accept and process this information in future publications. Our task is not to insist on a single correct interpretation, but to offer a systemic view of the problem and invite discussion.

FROM THE EDITORS: WHAT CHANGED IN 48 HOURS

We prepared this material on July 6, 2026. By the time of publication on July 8, all our theses had found confirmation in real events.

In 48 hours:

• The government introduced a complete ban on diesel fuel exports for producers [7]

• Russia began importing petroleum products — an oil-exporting country is importing gasoline [2][7]

• Attacks on refineries continue: Saratov, Nizhnekamsk, Omsk, Yaroslavl, tankers in the Rostov region [5][10][14]

• The government extended the permit for Euro-3 gasoline until the end of 2026 [4][9][13]

• The head of the RSPP Alexander Shokhin requested tax benefits for refinery restoration [3][8][12]

• Vladimir Putin held a meeting on the fuel crisis, where officials discussed the “difficult” situation [11][15]

• In Crimea, gasoline prices more than doubled, and Putin demanded immediate solutions [7]

The situation is developing in real time. New events confirming our analysis are possible — we continue to monitor.

INTRODUCTION: PLANTS THAT CANNOT BE SOLD

In the previous article (“Fuel Crisis in Russia: Systemic Failure or Stress Test?”), we showed that the fuel crisis is not an accident, but a failed stress test of the system. The main question that remained off-screen: why can’t refineries built during Soviet times provide the country with gasoline?

The formal answer: drone attacks, wear and tear, sanctions.

The real answer: these plants have been in a zone of uncertainty for 30 years. They formally belong to joint-stock companies, but legally and historically, they are national heritage that was transferred to management under conditions that no one has revised.

Illustration from other countries: A parallel process is occurring beyond Russia’s borders. The refinery in German Schwedt, which supplies Berlin with fuel, is in a state of limbo due to ownership confusion. The German government took the refinery under trusteeship after 2022 but refused to fully nationalize it. The plant cannot switch to processing other types of crude oil that differ significantly in composition from Russian Urals. This is a mirror image of the Russian problem: ownership uncertainty kills investment and modernization.

In Kazakhstan, the Atyrau Refinery, built in 1945 under the Lend-Lease program, is in a zone of uncertainty: “KazMunayGas” is trying to sell it, and “Tatneft” is in no hurry to buy. The plant “stubbornly does not publish its financial results,” regularly appears in accident chronicles, and its processing depth leaves much to be desired.

Everywhere the same problem: old plants built by the state are managed by private management that does not invest, but only exploits.

PART 1. FACTS: WHO OWNS THE REFINERIES

The data is based on open registries and privatization archives. We do not claim that this is the only possible interpretation — this is data we were able to verify from open sources.

Refinery	Launch Year	Current Owner	How Acquired
Omsk Refinery	1955	Gazprom Neft	Privatization as part of Sibneft (1995 pledge auction)
Kirishi Refinery	1966	Kirishinefteorgsintez (part ofSurgutneftegaz)	Privatization in 1993
NovoufimskRefinery	1951	Bashneft (since 2016 — under state control)	Returned to state ownership by court decision (2014)
VolgogradRefinery	1957	Lukoil	Privatization in 1995 as part of the concern
YaroslavlRefinery	1961	Slavneft (controlled by Rosneft and Gazprom Neft)	Created as a JV in 1994, later redistributed
Ryazan Refinery	1960	Rosneft	Transferred during the company’s creation in 1993
SaratovRefinery	1934	Rosneft	Privatization

Key conclusion:

All plants were built during Soviet times — 20–40 years before privatization. Their construction was financed from the state budget, which was formed in part from taxes paid by USSR citizens. Management did not create these assets. It received them for management, and then — into ownership. Legally, this is formalized as a purchase and sale, but in fact, it is a transfer of control over national heritage.

PART 2. LEGAL FICTION: HOW “STATE” BECAME “PRIVATE”

1. Stage 1 (1991–1993). State enterprises are transformed into joint-stock companies. Presidential Decree No. 1403 of November 17, 1992, creates vertically integrated companies. The controlling stake belongs to the state, but real management passes to management.

2. Stage 2 (1994–1996). Pledge auctions. The state pledges shares of oil companies in exchange for bank loans. Loans are not repaid — shares pass to banking structures close to future oligarchs. The Omsk Refinery became part of Sibneft, whose shares were put up for a pledge auction in November 1995.

3. Stage 3 (2000–2010). Redistribution: part of the assets returns under state control (consolidation into Rosneft), part remains under private management (Lukoil, Surgutneftegaz). In 2014, Bashneft shares were returned to the state by a decision of the Moscow Arbitration Court based on violations during privatization.

4. Stage 4 (2020–2026). Ownership is fixed, but obligations to the state are blurred: instead of modernization — tax benefits; instead of investment — profit withdrawal through dividends.

Legal paradox:

According to the Constitution, subsoil is the common heritage of the people. But the plants that process this heritage are privately owned. Between them stands a license for subsoil use, which is essentially a lease agreement, but the real mechanism of state control is absent or ineffective.

PART 3. WHY PLANTS ARE NOT BEING MODERNIZED (THE OFFICIAL VERSION)

The government extends modernization deadlines, raising the investment bar. However, according to open sources and industry media:

• Management does not invest part of these funds, requesting deferments.

• Plants operate at reduced capacity (according to industry experts, during periods of active attacks — up to 40–50% downtime of individual units).

• Imported equipment is blocked by sanctions, and domestic production of analogs is limited.

The question we ask:

If you own an asset that brings you billions, but you do not invest in it — are you an owner or a tenant?

Answer (hypothesis):

You are a tenant with a right of lifelong use, who bears no responsibility for the condition of the facility. This is a classic model of rent-seeking behavior: take resources, do not invest, withdraw profits. We do not claim that this is a proven fact for all refineries, but such a model has been repeatedly described in economic literature and public investigations.

PART 3.5. EURO-5 TECHNICAL REGULATIONS — THIS IS AN ADMISSION OF FICTION

In the 2010s, the state spent significant funds and years of political rhetoric on “modernizing refineries to the Euro-5 standard.” This was presented as a technological breakthrough, environmental care, and a transition to a “new technological order.”

Fact No. 1. Vehicles with Euro-2 and Euro-3 engines constitute a significant share of the fleet.

According to experts, approximately 70% of cars in Russia are over ten years old [4]. According to statistics, the majority of vehicles in the country have an environmental class of Euro-3 and below [4]. Exact figures as of 2026 are not available in the public domain — state statistics do not publish detailed breakdowns of the vehicle fleet by environmental class in real time.

That is, Euro-5 technical regulations were imposed on an economy where a significant portion of vehicles do not support this standard.

Fact No. 2. In 2026, environmental requirements are sharply reduced.

In the midst of the fuel shortage, the government introduces a temporary permit for the production of gasoline and diesel with a lower environmental class. According to Government Decree No. 819 of July 2, 2026, from July 1 to December 31, 2026, refineries are allowed to produce gasoline with sulfur content up to 150 mg/kg and diesel fuel up to 350 mg/kg instead of 10 mg/kg under the Euro-5 standard [4][9][13]. These characteristics correspond to the Euro-3 standard [4].

At the same time, the Ministry of Energy will monitor production, and the standard for mandatory sales of 5th class gasoline on exchange trading has been reduced from 15% to 10% [4].

This is not just a forced measure — it is an admission that the system is unable to ensure stable production of higher-standard fuel [4].

Fact No. 3. The reduction of the standard exposes a systemic problem.

Now connect the chain:

1. The state announces modernization and provides management with tax benefits and deferments.

2. Part of the funds (according to industry experts and media publications) may have been directed not to hydrocracking and catalytic reforming units, but to other purposes — specific figures are unavailable due to the closed nature of corporate reporting.

3. Plants remain with technologies that have largely retained the Soviet base.

4. Instead of admitting the failure of modernization, formal requirements are introduced, and then, under the pretext of “drone attacks” and shortages, these requirements are relaxed.

Summary:

• Drone attacks on refineries became a convenient pretext for revising environmental requirements [5][7][14].

• The reduction of environmental requirements in 2026 is an actual capitulation to reality: some plants were not modernized to the declared extent, and gasoline is needed at any cost [4][9].

• The entire narrative about “advanced technologies” and “care for nature” could have been used as justification for tax benefits and budget investments — but we have no complete certainty about this, since data on the actual expenditure of funds is not published.

Fact No. 4. “Euro-3” is dangerous for modern engines.

The sulfur content in Euro-3 is up to 150 mg/kg compared to 10 mg/kg in Euro-5. A 15-fold difference [4][9]. Sulfur reduces the service life of motor oil and destroys metal [9]. As experts note, for owners of non-turbocharged cars manufactured before 2015, nothing will change — their engines will run no worse on Euro-3 [4]. However, for new cars, especially those equipped with turbochargers, the increased sulfur content is critical [4][9]. Experts advise refueling with Euro-5 whenever possible, and if such an opportunity is not available, use fuel system cleaners and change oil more often [4].

PART 3.6. NEW TURN: SHOKHIN’S PROPOSAL (JULY 2026)

On July 6, 2026, the head of the RSPP, Alexander Shokhin, at the Innoprom forum, proposed extending the federal investment tax deduction to oil refining [3][8][12]. Companies restoring refineries after drone attacks will be able to reduce their income tax by the amount of investment [3][8].

Shokhin explained that capacity restoration is a “joint task” of business and authorities, and support is important not only for companies but also for related industries, including agriculture [3][12]. He also noted that launching mothballed plants producing Euro-3 standard gasoline would help stabilize the fuel market [3][12].

This proposal is another link in the chronology of cynicism:

Period	Event
1990s	Refineries were privatized
2010s	Benefits were given for Euro-5
2026	New benefits are requested under the pretext of attacks

Profit remains private. Losses remain state.

PART 3.7. ECONOMIC ABSURDITY: WHY DOES EURO-2 VEHICLES NEED EURO-5 GASOLINE?

Modernizing refineries to the Euro-5 standard made sense in only one logic: if the entire country’s vehicle fleet consisted of cars no older than 5 years.

But reality, according to open sources and industry reviews, is different:

• Approximately 70% of cars in Russia are over ten years old [4].

• A significant portion of Russia’s vehicle fleet consists of cars with Euro-2 and Euro-3 class engines [4]. The exact figure for 2026 is not available in the public domain.

• These engines physically cannot use the potential of Euro-5 gasoline — their ignition systems, catalysts, and fuel equipment are designed for fuel with lower requirements.

• Pouring expensive Euro-5 gasoline into a Euro-2 engine is economically inefficient: efficiency is zero, and emissions remain at the Euro-3 level.

The question we ask:

“Why spend significant funds on modernizing plants for fuel that a significant portion of the country’s vehicle fleet does not need?”

Answer (hypothesis):

This may have been less about modernization and more about a bureaucratic construct allowing:

• Master budget funds under the guise of “investments.”

• Create a formal pretext for tax benefits.

• Simulate movement toward “technological sovereignty.”

When the shortage hit the wallet, the construct collapsed: the standard was lowered — de facto admitting that the plants were not ready to produce Euro-5 in the necessary volumes for a country where a significant portion of vehicles have a lower environmental class [4][9].

PART 3.8. EXPORT RESTRICTIONS — THIS IS AN ILLUSION OF CONTROL

On July 8, the government introduced a complete ban on diesel fuel exports, extending it to producers as well [7]. Previously, restrictions only applied to non-producers [7]. The ban will be in effect until July 31, 2026.

At the same time, restrictions do not apply to supplies under intergovernmental agreements [7].

Simultaneously, Deputy Prime Minister Alexander Novak announced that Russia is beginning to import petroleum products [2][7]. Fuel demand has increased by about a third [2]. Novak acknowledged that the situation “on the whole still remains difficult” [2][7].

The government also extended the zero duty on imports of petroleum products and additives for another year, and the possibility of providing discounts on railway tariffs for imported fuel has been worked out with Russian Railways [7].

Questions we ask:

1. Why is a country that is one of the largest oil exporters forced to import petroleum products?

2. Why is the complete export ban being introduced only now, when the crisis has already arrived?

3. What prevented these measures from being introduced a month or a year ago?

Conclusion: Export restrictions are a theatrical gesture, creating the appearance of fighting the shortage. The real problem is not that fuel is going abroad, but that the domestic market has become a hostage to the ownership structure and refinery management model.

PART 3.9. WHO SHOULD INVEST? NOT THE PLANT, BUT THOSE WHO RECEIVED THE PROFIT

The state demands investment from refineries. But a refinery is a legal entity. Behind it are specific shareholders and management who have been receiving profits for decades from operating assets created during Soviet times.

From open sources, it is known that Russian oil companies pay dividends to shareholders. However, the exact structure of profit distribution, reinvestment volumes, and chains of funds withdrawal abroad are closed.

The question we ask:

“Why haven’t shareholders and management, who have been receiving profits for 30 years from operating Soviet-built plants, been investing this profit back into modernization?”

Answer (hypothetical):

Because it may be unprofitable for them. Investing money in Russian refining means:

• Submitting to state regulation and price controls.

• Taking risks under sanctions and uncertainty.

• Receiving profits in rubles, the withdrawal of which is restricted.

More profitable to withdraw profits and tell the state: “give us tax benefits, and we’ll think about it.” However, this is a hypothesis requiring verification: open data does not allow us to definitively confirm or refute this model for all refineries.

PART 3.10. ATTACKS CONTINUE: THE NEW NORMAL

On July 8, 2026, Russian air defense shot down 415 drones [5]. Targets:

• Saratov Refinery — fire, one dead, wounded [5][14]

• Nizhnekamsk (Tatarstan) — five fire sources at the refinery, distance from the border ~1900 km [5][10]

• Omsk Refinery — attack on July 6, most drones destroyed, no casualties [14]

• Yaroslavl Refinery — a record 70 drones overnight, shot down, two injured with shrapnel wounds [5]

• Tankers in Taganrog Bay — two vessels damaged [5][14]

• Borisoglebsk Military Airfield (Voronezh Oblast) — fire [5][14]

The governor of the Yaroslavl region, Mikhail Evraev, called the attack on the Yaroslavl Refinery the “largest” [5]. The air raid alert was lifted only by 7:00 PM on July 6.

“Drone attacks” cease to be a temporary factor — they are becoming a new normal, shaping economic reality.

Consequences for the population:

In Irkutsk, located almost 5 thousand kilometers from the Ukrainian border, residents wait in lines for gasoline for 18 hours [7]. In Crimea, fuel prices more than doubled [7]. Putin demanded immediate solutions: “not to show a willingness to consider, but to make decisions” [7].

At the July 8 meeting, the governor of the Trans-Baikal Territory, Alexander Osipov, proposed building a network of small refineries in response to attacks on large refineries, and Putin approved this initiative [7]. This is an admission: large refineries are not coping, and there is nothing to replace them with.

CONCLUSION: WHAT WE SAW IN 48 HOURS

Thesis from the article	Confirmation from July 8	Source
Plants were not modernized to the declared extent	Euro-3 gasoline permitted until end of 2026	[4][9][13]
Management requests benefits instead of investments	Shokhin proposed tax benefits for refineries	[3][8][12]
The system cannot provide for the country	Russia begins importing fuel	[2][7]
Drone attacks — pretext for relaxations	Each attack — basis for new benefits and deferments	[5][7][14]
Ownership structure — root of problem	Complete export ban amid demand growth by a third	[2][7]
Domestic market — hostage to management model	Putin holds meeting, officials acknowledge “difficult” situation	[2][11][15]

OUR POSITION

We do not claim that our interpretation is the only one. We invite readers to independently evaluate the chain: Soviet plant → joint-stock company → management → attack → benefits → shortage → imports.

We use only open sources. Accurate data is extremely difficult to find, since Russia still lacks a state system for collecting, standardizing, and publicly verifying data on refinery capacity utilization, investment volumes, ownership structures, and profit withdrawal chains.

If readers have access to official statistical data, analytical reports, or internal documents that could supplement or correct our picture, we are prepared to accept and process this information in future publications.

We invite discussion and open exchange of facts. Because without verifiable data, any analysis remains merely a hypothesis. And even the most convincing hypotheses do not replace a system of transparent accounting and control.

New events may occur today and in the coming days confirming our conclusions — we continue to monitor.

LIST OF SOURCES

[2] Novak reported that fuel demand increased by about a third // Interfax, July 8, 2026. https://www.interfax.ru/business/1102082

[3] Head of the RSPP Alexander Shokhin proposed introducing tax preferences for the restoration of refineries affected by UAV attacks // Energy Policy, July 6, 2026. https://energy-policy.ru/glava-rspp-aleksandr-shohin-predlozhil-vvesti-nalogovye-preferenczii-dlya-vosstanovleniya-npz-postradavshih-ot-atak-bpla/novosti/2026/07/06/

[4] “Euro-3” or “Euro-5”? What fuel will be sold at gas stations and what car owners need to know // Rossiyskaya Gazeta, July 4, 2026. https://rg.ru/2026/07/04/ekspert-frolov-obiasnil-dlia-kakih-mashin-ne-opasen-benzin-evro-3.html

[5] Ukraine again attacked Russian refineries, a military airfield, and tankers // Radio Svoboda, July 8, 2026. https://www.svoboda.org/a/ukraina-vnovj-atakovala-rossiyskie-npz-voennyy-aerodrom-i-tankery/33799213.html

[7] Russia imposed a ban on diesel fuel exports // Radio Svoboda, July 8, 2026. https://www.svoboda.org/a/v-rossii-vvedyon-zapret-na-eksport-dizeljnogo-topliva/33799539.html

[8] Shokhin called for tax benefits for repairing refineries damaged by drone attacks // Komsomolskaya Pravda, July 6, 2026. https://www.kp.ru/online/news/7058000/

[9] Galya, we have a substitution: who is endangered by the return of Euro-3 gasoline to gas stations — commentary by an auto expert // Tula News Service, July 8, 2026. https://www.tsn24.ru/2026/07/08/357664-galya-u-nas-podmena-komu-opasen-vernuvshiysya-na-azs-benzin-evro-3-kommentariy-avtoeksperta/

[10] Ukraine broke through Russia’s air defense and massively struck the Nizhnekamsk refinery // Dialog.UA, July 8, 2026. https://www.dialog.ua/russia/ukraina-prorvala-pvo-rossii-i-massirovanno-udarila-po-npz-nizhnekamska.html

[11] Putin said that difficulties with fuel will pass // Vesti.ru, July 8, 2026. https://www.vesti.ru/ns/putin-zayavil-chto-slozhnosti-s-toplivom-projdut

[12] Shokhin called for introducing tax benefits for refineries affected by UAV attacks // Tatar-inform, July 6, 2026. https://www.tatar-inform.ru/news/soxin-prizval-vvesti-nalogovye-lgoty-dlya-npz-postradavsix-ot-atak-bpla-6033367

[13] “Euro-3” gasoline allowed in Russia: what it means for drivers // Yamal-Media, July 7, 2026. http://yamal-media.ru/narrative/benzin-evro-3-razreshili-v-rossii-chto-eto-znachit-dlja-voditelej

[14] In Russia, drones attacked a military airfield and several refineries // KP.UA, July 8, 2026. https://kp.ua/incidents/a732790-v-rossii-drony-atakovali-voennyj-aerodrom-i-neskolko-npz

[15] Putin called fuel difficulties in Russia temporary // IA REGNUM, July 8, 2026. https://regnum.ru/news/4048176

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The material was prepared by the editorial board of “Kafedra” and SforNews magazines based on open sources. When citing, a link to the original source is mandatory. All conclusions that do not have direct references to official documents are probabilistic in nature and require additional verification.